South Africa
CONFIDENTIAL
xxiii
77 In the face of a rapidly deteriorating balance of payments position and buoyant
private sector demand, the SARB has raised its discount rate by a further 2
percentage points. Increasing budgetary expenditure, however, threatens to
undermine the effectiveness of this and other measures introduced earlier in the
year.
Cote d'Ivoire
78
The unwillingness of the authorities to agree to a cut in cocoa produce prices
is holding up the disbursement of IBRD loans and commercial bank agreement on a
rescheduling. While some payments to official creditors have been made nothing has
been paid to the banks since May 1987. Rumours of an agreement involving a private
French company and the French Government to assist with the Ivorian stockpiling of
cocoa have been denied by the French authorities.
Sudan
79 The recent floods have significantly worsened the already bleak prospects for
the Sudanese economy. The Sudanese Cabinet endorsed the DUP/SPLA Agreement (one of
the steps towards a ceasefire) on 1 December and the peace initiative is gathering
momentum. Arrears now total $5 bn (of which $890 mn is due to the IMF). The
authorities have, however, introduced a two-tier exchange rate system which has had
some limited success in attracting inward remittances. They are also negotiating
with the IMF on a possible shadow programme covering, inter alia, the exchange rate
and subsidy reform. Even if agreement can be reached (which seems doubtful), a
shadow programme is unlikely to be in place before April 1989. The floods have
necessitated a major review of the budget and the authorities are reported to have
secured $300 mn for the Emergency Flood Reconstruction Programme at an end-November
donors' meeting in Paris.
No comments yet.
Private notes are available after approval.