Author/Editor:

International Monetary Fund. African Dept.

Publication Date:

March 10, 2020

Electronic Access:

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Summary:

Regime change has created a window of opportunity for fundamental reforms to address major macro imbalances and lay the groundwork for inclusive growth. After prolonged protests, President Al-Bashir’s government was removed and a transitional government was sworn in August 2019 for a 39-month period, to be followed by general elections. Major challenges lie ahead. The economy is shrinking, fiscal and external imbalances are large, inflation is high, the currency is overvalued, and competitiveness is weak. The humanitarian situation is dire with large numbers of internally displaced people and refugees. U.S. sanctions on trade and financial flows were revoked in October 2017, but Sudan remains on the state sponsors of terrorism list (SSTL), which effectively discourages external investment and blocks progress toward both HIPC debt relief and the clearance of large arrears to the Fund. In this context, staff engagement has intensified to render the necessary policy and technical assistance to help the authorities seize this once-in-a-generation opportunity for reforms. There is broad agreement between the authorities and staff about the key reform priorities, but the authorities have yet to put together a fully coherent and viable plan that enjoys broad public support and can plausibly attract adequate donor financing.