IMF国际货币组织全球-Sudan_Selected-Issues_41页_604kb

Sudan Selected Issues Summary

Core Content

This document is a Selected Issues paper prepared by the International Monetary Fund (IMF) on Sudan, focusing on governance enhancement, corruption reduction, revenue mobilization, oil sector policies, and financial system analysis. It serves as background documentation for the IMF's periodic consultation with Sudan, based on information available up to February 6, 2020. The paper is structured into several key sections, each addressing specific challenges and opportunities for reform.

Main Issues and Key Points

A. Introduction

• Weak governance and corruption are identified as major obstacles to economic growth, income equality, and public trust in institutions.
• The IMF has updated its "Framework for Enhanced Engagement on Governance" to better support member countries in addressing governance and corruption issues.
• Sudan is considered a priority for governance engagement due to its fragility, lack of transparency, and limited institutional capacity.
• The document highlights the interconnectedness between weak governance and corruption, emphasizing the need for institutional reforms and capacity building to combat both.

B. Definition of Governance, Perception and Costs of Corruption

• Governance is defined as the system of institutions, mechanisms, and practices through which a country manages its resources, and is considered "good" if it is participatory, accountable, transparent, and rule of law-oriented.
• Corruption is defined as the abuse of public office for private gain.
• Poor governance and corruption are often interlinked, with the former providing opportunities for the latter.
• Corruption is associated with reduced efficiency, increased inequality, and weakened public trust, and can hinder inclusive growth.
• Perceptions of corruption can influence compliance behavior and tax evasion, and are often reinforced by governance shortcomings.

C. Fiscal Governance

• Sudan's fiscal governance is weak, with issues in public financial management (PFM), procurement, and public investment.
• Data quality and transparency are major concerns, with limited access to budgetary information and lack of accountability.
• Tax collection is low, at 6% of GDP in 2019, and below regional peers.
• Indirect taxes (customs, excises, VAT) are the main sources of revenue, but they are complex, subject to frequent changes, and affected by multiple currency practices.
• Tax holidays and exemptions in the Investment Law, along with a large informal sector, contribute to low tax revenue.
• Corruption is perceived as a major obstacle to business operations, with firms citing customs and trade regulations and tax administration as their biggest challenges.
• Public investment efficiency is low, with Sudan operating far from the efficiency frontier, and inefficient governance is a key factor.

D. Financial Sector Oversight

• Sudan's financial sector has been subject to international sanctions since 1997, which have hindered development and financial inclusiveness.
• The financial system is small, and financial inclusiveness is low, especially in rural areas.
• Corruption and weak governance increase the risk of money laundering and terrorist financing.
• The Central Bank of Sudan (CBOS) has limited operational independence and lack of transparency.
• Stress tests reveal the fragility of the banking system, and supervisory practices are inadequate due to personnel turnover and lack of capacity.
• Fiscal dominance has weakened central bank independence, leading to high inflation and multiple exchange rates.

E. Central Bank Governance and Operations

• The CBOS has never undergone a safeguard assessment due to its long-standing arrears with the IMF.
• The legal framework of the CBOS lacks operational independence, financial autonomy, and transparency.
• Supervisory functions are compromised by conflicts of interest, high personnel turnover, and loose regulations.
• External audit is conducted by the General Audit Chamber, but standards and transparency are not clearly defined.
• The CBOS is the major shareholder in several banks, creating conflicts of interest.
• The government's reliance on seigniorage and quasi-fiscal financing has eroded central bank credibility and increased inflation.

F. Market Regulation

• Burdensome regulations and red tape create opportunities for corruption.
• Corruption is seen as a tax on profitability, reducing private investment.
• The perception of corruption and weak governance create uncertainty in investment returns.
• Delays in licensing and customs clearance are common due to corruption and inefficiency.

Key Recommendations and Outcomes

• The IMF has requested a broader governance diagnostic mission for Sudan in the first half of 2020.
• Reforms in procurement, investment, and tax administration are needed to improve transparency and efficiency.
• Tax collection needs to be increased, with a focus on simplifying the tax system, reducing exemptions, and improving the legal framework.
• Central Bank Law should be revised to enhance independence, transparency, and supervisory capacity.
• Financial sector development and financial inclusiveness require international support, especially in regulatory reform and capacity building.
• Multiple currency practices (MCP) should be reformed to reduce corruption risks and economic distortions.
• Public investment efficiency must be improved through better project selection, transparent procurement, and effective monitoring.

Conclusion

The document outlines systemic governance and corruption issues in Sudan and highlights the interconnected challenges that affect economic performance, public trust, and financial stability. It emphasizes the need for institutional reforms, capacity building, and international support to address these issues and promote sustainable and inclusive growth. The IMF is committed to supporting Sudan in this process, especially through technical assistance and diagnostic missions.