Front Matter

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© 2011 International Monetary Fund

April 2011

IMF Country Report No. 11/86

Sudan: Second Review Under the 2009–10 Staff-Monitored Program —Staff Report; Staff Supplement; and Statement by the Executive Director for Sudan

In the context of the second review, the following documents have been released and are included in this package:

  • The staff report for the Second Review Under the 2009–10 Staff-Monitored Program, prepared by a staff team of the IMF, following discussions that ended on December 14, 2010, with the officials of Sudan on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on January 24, 2011. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.

  • A staff supplement of February 4, 2011 updating information on recent developments.

  • A statement by the Executive Director for Sudan.

The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.

Copies of this report are available to the public from

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Second Review Under the 2009–10 Staff-Monitored Program

Prepared by the Middle East and Central Asia Department

(In consultation with other departments)

Approved by Alan MacArthur and Jan Kees Martijn

January 24, 2011

Fund relations: The Executive Board concluded the 2010 Article IV consultation on June 24, 2010 (EBS/10/111). The PIN is available at The staff report for the 2009–10 staff-monitored program (EBS/09/115) was issued to the Board on June 24, 2009 and is available at:

Mission: Discussions were held in Khartoum during December 1–14, 2010. The mission met with Mr. Ali Mahmood Abdul-Rasool, Minister of Finance and National Economy, Mr. Lual Achwel Deng, Minister of Petroleum, Dr. Sabir Mohamed Hassan, Governor of the Central Bank, other senior officials, and representatives of the business, donor, and diplomatic communities.

Staff team: The mission consisted of E. Gemayel (head), J. Dridi, D. Jardaneh, E. Arbatli (all MCD), L. Erasmus (FIN), L. Liu (FAD), A. Zoromé (Resident Representative), and A. Yasin (economist from the Resident Representative Office). Mr. MacArthur participated in the policy discussions.


  • Executive Summary

  • I. Introduction

  • II. Recent Economic Developments

  • III. Policy Discussions

    • A. Fiscal Policy

    • B. Monetary and Exchange Rate Policies

    • C. External Debt and Relations with Creditors

  • IV. Performance under Staff-Monitored Programs (SMP)

    • A. Performance Under the 2009–10 SMP

    • B. Performance Under Previous SMPs

  • V. Macroeconomic Implications of Independence of South Sudan

  • VI. Staff Appraisal

  • Tables

  • 1. Selected Economic and Financial Indicators, 2007–11

  • 2. Central Government Operations, 2007–11

  • 3. Monetary Authorities Accounts, 2007–11

  • 4. Monetary Survey, 2007–11

  • 5. Balance of Payments, 2007–11

  • 6. Medium-Term Macroeconomic Scenario, 2007–15

  • 7. Status of Quantitative Targets in 2009–10 SMP

  • 8. Status of Structural Measures for 2010

  • Figure

  • 1. Selected Economic Indicators, 2004–10

  • Boxes

  • 1. The Comprehensive Peace Agreement

  • 2. Challenges for South Sudan

  • 3. Technical Working Group on Debt (TWG)

  • 4. Economic Implications of a Possible South Sudan Independence on the North

Executive Summary


Political uncertainties ahead of the January 2011 South Sudan referendum on self-determination have been weighing heavily on the Sudanese economy, adding to the adverse effects of the global crisis in 2009. Economic growth in 2010 is projected to decelerate to about 5 percent. Average inflation is projected to remain at 11 percent.

Fiscal and monetary policies were noticeably tightened starting the second half of 2010. Shortfalls in both tax revenues and oil receipts were more than offset with notable under-execution in both capital and current expenditures. Monetary policy remained expansionary in the first half of 2010, but was tightened starting in July. The central bank recently undertook an exchange rate depreciation of about 19 percent.

Staff recommendations

  • Tighten the monetary stance to reduce pressures on inflation and the exchange rate.

  • Increase exchange rate flexibility in order to rebuild foreign exchange reserves.

  • Enhance non-oil revenue and streamline expenditures in order to maintain macroeconomic stability and reduce dependence on oil revenues.

  • Continue to strengthen the financial sector, including by improving banking supervision and restructuring the Omdurman National Bank.

  • Initiate a dialogue with creditors with the aim of establishing wide support for arrears clearance and debt relief.

Authorities’ views

  • The reduction of the fiscal deficit will be achieved through broadening the revenue base by reducing tax exemptions and improving administration, and reducing spending.

  • Building up foreign exchange reserves is important and a cautious monetary policy is needed to achieve this objective.

  • Progress on debt relief, under the HIPC initiative, is essential to remove the debt overhang and regain access to concessional financing for development and social projects.

  • Various policy options are being assessed to address the significant challenges posed by a possible independence of the South in 2011.

While the full implications of the referendum will only be clear in the coming months, the impact on the macroeconomic framework for Sudan will be large in many dimensions. Staff is following developments in consultation with the authorities and will update the analysis and policy recommendations in light of new information.

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Staff Report for the Second Review Under the 2009–10 Staff-Monitored Program Supplementary Information

Prepared by the Middle East and Central Asia Department

(In consultation with other departments)

Approved by Alan MacArthur and Jan Kees Martijn

February 4, 2011

Sudan: Second Review Under the 2009-10 Staff-Monitored Program-Staff Report; Staff Supplement; and Statement by the Executive Director for Sudan
Author: International Monetary Fund