MULTI-DONOR TRUST FUND-NATIONAL, SUDAN

MDTF-N: Assessment of Program Sustainability October 23, 2011

MDTF-N –Supported Korak Basic School, Seteet, Kassala.

صندوق دعم المانحين القومي السودان

تقييم إستدامة برنامج صندوق المانحين القومي

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Acronyms and Abbreviations

ASEP Abyei Start up Emergency Project BEP Basic Education Project BEST Bank Emergency Safeguard

Toolkits BNSEP Blue Nile Start up Emergency

Project CDF Community Development Fund CPA Comprehensive Peace Agreement CB Central Bank (Sudan) CBS Central Bureau of Statistics CPPR Country Portfolio Performance

Review CSO Civil Society Organization DHSDP Decentralized Health System and

Development Project EA Environmental Assessment ESMF Environmental and Social

Management Framework ESSAF Environmental and Social

Screening and Assessment Framework

FFAMAC Fiscal Financial Allocation and Monitoring commission

GAP Gum Arabic Producers GDP Gross Domestic Product GoNU Sudan Government of National

Unity GoSS Government of South Sudan HIPC Heavily Indebted Poor Countries IDA International Development

Association ILPM Improving Livestock Production

and Marketing Project ISDS Integrated Safeguard Data Sheet ISR Implementation Status and Results

Report

IOC Interim Oversight Committee MDTF Multi-Donor Trust Funds JAM Joint Assessment Mission MDGs Millennium Development Goals M&E Monitoring and Evaluation MIC Ministry for International Cooperation (GoNU) MoFNE Ministry of Finance and National

Economy (GoNU) MTBF Medium-Term Budget Framework NETREP National Emergency

Transportation and Rehabilitation Project

O&M Operations and Maintenance RAP Resettlement Action Plan PER Public Expenditure Review PFP Policy Framework Paper PSCAP Public Sector Reform,

Decentralization and Capacity Building Program

RPF Resettlement Policy Framework PRSP Poverty Reduction Strategy Paper SFP Safeguard Focal Point SIMS Safeguard Information

Management System SKSEP South Kordofan Start up

Emergency Project SMC Safeguard Management Committee SMU Sector Management Unit SPN Supervision TTL Task Team Leader SME Small and Medium Enterprises UN United Nations UNDP United Nations Development

Program

Vice President: Obiageli Ezekwesili Country Director: Deborah M. Bird Country Manager and Task Team Leader: Alassane Sow Consultants and Primary Authors: Fareed M.A. Hassan and Joseph Baah-Dwomoh

Table of Contents PREFACE ..................................................................................................................................... i EXECUTIVE SUMMARY ..................................................................................................... ii 1. INTRODUCTION ............................................................................................................... 1

A. Background ........................................................................................................................... 1 B. Objectives of the MDTF-N ................................................................................................... 1 C. MDTF-N Portfolio ................................................................................................................ 1

2. THE SUSTAINABILITY STUDY ................................................................................. 4

A. Rationale for and Objectives of the Sustainability Assessment............................................ 4 B. Methodology and Approach of the Sustainability Study ...................................................... 4

3. LIKELIHOOD OF SUSTAINABILITY FOR EACH OF THE MDTF-N

PROJECTS ............................................................................................................................ 6 4. ASSESSMENT OF SUSTAINABILITY OF THE MDTF-N PORTFOLIO

FROM A THEMATIC PERSPECTIVE .................................................................. 16 A. Basic Services Perspective ................................................................................................. 16 B. Infrastructure and Rural Development Perspective ........................................................... 23

5. ASSESSMENT OF CAPACITIES OF FEDERAL AND NORTHERN

STATES GOVERNMENTS TO SHOULDER MDTF-N SUSTAINABILITY COSTS ......................................................................................... 29 A. MDTF-N Resource Allocation at National and State Level .............................................. 29 B. Sustainability Implications at National and State Level .................................................... 30 C. Sustainability Costs of MDTF-N Program at National and State Level ............................ 31 D. Resource Availability in relation to Sustaining MDTF-N Program .................................. 31 E. Concluding Remarks .......................................................................................................... 32

6. ELEMENTS OF AN EXIT STRATEGY AND REPLICATION OF

SUCESSFUL ACTIVITIES ........................................................................................... 31 A. National Level......................................................................................................... ........... 31 B. State Level............................................... .......................................................................... 31 C. Community Level..................................................................................................... .......... 32 D. Beyond MDTF-N—Replication of Successful Activities ................................................. 32 E. Action Plan for an Exit Strategy ........................................................................................ 35

LIST OF TABLES 4.1: States’ Expenditures Compared to Sustainability Costs of MDTF-N Basic Services Portfolio, 2009 (SDG million) ....................................................................................................... 21 4.2: Composition of Public Basic Education Spending (Federal and State), 2009......................... 25

4.3: Sustainability Cost Estimates of the MDTF-N Rural Program (SDG Thousands) ................. 30 4.4: Cost Estimates for Sustaining Roads and Rail Projects (SDG thousands) .............................. 31 5.1: MDTF-N Program and Sustainability Cost Estimates at National and State Levels (SDG millions) .....................................................................................................................37 LIST OF BOXES 4.1: Good Example of Incorporating Sustainability Measures in Alsahba Village Water Project 23 4.2: Where There is Power, There is Development—A successful Story of Solar Electrification in Abu Hashheem Village, Blue Nile State ..................................................................................24 5.1: Potential Impact of Impeding Fiscal Adjustment on Sustainability State .............................39 LIST OF ANNEXES 1: Financial Summary of the MDTF-N Portfolio ..........................................................................49 2: Summary of MDTF-N Results ..................................................................................................50 3: Summary Review of Sustainability Indicators of Individual Projects .......................................57 4: Annual Revenue, Federal Transfers, and Expenditure by Northern States 2000-2009 (SDG

million)…………… ........................................................................................................67 5: MDTF-N Sustainability Mission Notes .....................................................................................82

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PREFACE Since 2005, the World Bank has been administering the Multi-Donor Trust Fund National (MDTF-N) established by the Bank and a number of donor governments pursuant to the Comprehensive Peace Agreement (CPA) concluded in January 9, 2005. The MDTF-N supported a range of projects focusing on recovery and development in war-affected areas in the 15 Northern states of Sudan. The scheduled end of the MDTF program is December 2013. As the financing comes to an end, issues have been raised with regard to ensuring sustainability of funded activities beyond the closing date of the MDTF-N program. To ensure sustainability of MDTF-N results and thus the long-term impact of the portfolio, the June 2010 Country Portfolio Performance Review of the MDTF-N portfolio recommended conducting a sustainability study. This study was to cover all relevant MDTF-N projects and to propose arrangements to sustain their operations. Sustainability refers to the ability of the MDTF-N development interventions to provide uninterrupted services to the intended beneficiaries over the foreseeable future. The Assessment of MDTF-N Program Sustainability was a joint World Bank and Government of National Unity (GoNU) exercise conducted in close collaboration with the MDTF-N donors. The Bank core team was led by Alassane Sow (Sudan Country Manager) and includes Fareed M.A. Hassan and Joseph Baah-Dwomoh (Consultants) who prepared the draft report; Isabel Soares (Senior Operations Officer, Sudan Country Office) and Yousra Mohamed Abdelrahman (Executive Assistant, Sudan Country Office). William G. Battaile (Senior Economist, AFTP2) served as a peer reviewer of the report. The GoNU counterpart team for the study includes Omer Hajam, Director General of Development at the Ministry of Finance and National Economy (MoFNE); Faiza Awad, Deputy Director, International Relations; and Mirghani Glood, Director of the MDTF-N Unit at MoFNE. The study consultation process was extensive and included consultations with: (i) key World Bank staff involved in the MDTF-N including projects’ Task Team Leaders, fiduciary personnel, and other Bank country team members; (ii) GoNU counterpart team for the study; (iii) staff from the implementing agencies; (iv) state level authorities, local communities representayives, and other stakeholders; and (v) Monitoring Agent (MA) staff. As part of the consultation process, an inception report on the sustainability study was prepared for the Oversight Committee of the MDTF-N during its meeting of December 16, 2011. Field visits to sampled localities in three states that are the primary focus of MDTF-N interventions (South Kordofan, Blue Nile, and Kassala) were conducted. A sustainability questionnaire was developed and used to collect information that guided the study. A first draft of this report was distributed to all staff involved and comments were subsequently reflected. The report team would like to express their gratitude to all those who contributed to the report.

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EXECUTIVE SUMMARY Context The Sudan National Multi Donor Trust Fund (MDTF-N) was set up in 2005 in the context of Sudan’s Comprehensive Peace Agreement (CPA). It was designed to implement activities focusing on consolidating peace and supporting recovery and development in war-affected areas such as Abyei, South Kordofan, Blue Nile, and other disadvantaged poor areas in the North of Sudan. The MDTF-N portfolio is made up of 15 projects, seven of which are closed and the remaining eight active projects are expected to close by December 2013.

Results Achieved The implementation of the MDTF-N portfolio has progressed with significant results on the ground. Project outcomes include: (i) increased basic school enrolment in targeted areas, benefiting nearly half a million pupils (of which 49 percent are female); (ii) increased access to basic health services at community level including an increase by 22 percent in births attended by skilled health staff, thus contributing to reducing mortality rate; (iii) more than 700, 000 people provided with clean water; (iv) rehabilitation of 446 km of rail line between north and south Sudan and the ongoing construction of three roads (207 km); (v) introduction of a new currency and the implementation of the population census, two key milestone provisions of the CPA; and (vi) capacity building including managerial and technical training for over a thousand government staff at federal, state, and local levels as well as implementation of a number of studies covering key sectors such as education, health, transport, agriculture, and public financial management. While there are strong signs that MDTF-N projects can potentially make strong contribution to the higher level MDG goals, sustainability remains an issue; thus, the rationale for this study.

Study Objectives The main objective of the sustainability study is to evaluate the capacity of the MDTF-N interventions to achieve and maintain their intended results and to assess necessary arrangements to sustain these results. This would lead to the preparation of an exit strategy for the handover of MDTF-N projects to key stakeholders including government, namely at state and local levels, and project beneficiaries. The preparation of this handover includes assessing operational and maintenance costs of the MDTF-N program and proposing activities to enhance capacity at state and local levels, and to strengthen stakeholders’ ownership and participation.

Study Approach The sustainability study involved an assessment of the risk/uncertainties faced by the projects over their expected useful life, and the resilience of the projects to these risks. It also reviews design features that may or may not contribute to sustainability. The main factors used to measure resilience of each operation include: technical resilience which addresses the quality of interventions; financial and economic sustainability of the operation; the social and environmental impacts; government (Federal, State and Local) and stakeholder (including community) ownership of the operation; institutional and policy support; and impact of exogenous factors. Sustainability cost estimates were made for the different interventions. First they were aggregated at the state level with the view to properly prepare for a more decentralized management of related expenditures and handover of the projects to local levels; second, they

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were aggregated at the sector level to guide sector policies and expenditures for the different sector activities, especially education and health.

The design of a number of the operations incorporates sustainability features that would, if maintained, ensure the flow of project benefits beyond the closing date of the MDTF-N. These include: the participatory approach adopted throughout the project cycle; the emphasis on building local capacity; the strengthening of stakeholders’ ownership, and partnerships with localities and NGOs; the utilization of the local government administrative structure as a conduit for implementation; and the inclusion of elements that nurture social organization, mobilization and empowerment of local communities.

Likelihood of Sustainability of the Different Operations Using the design elements and an analysis of the key sustainability factors presented above, the study assessed the likelihood of sustainability for each operation, i.e. whether sustainability is Likely, Uncertain or Unlikely. Of the 13 projects evaluated, 7 projects are rated Likely (Basic Education Project, Community Development Fund, the South Kordofan Start-Up Project, the Blue Nile Start-Up Project, the Microfinance Project, the Judiciary and the TAF). The sustainability of 5 projects was rated Uncertain at this stage (NETREP, Decentralized Health Services, Improving Livestock Marketing Project, Revitalizing Gum Arabic Production, and PSCAP). The sustainability of 1 project was considered Unlikely (Abyei Start-Up), stemming essentially from poor implementation performance, insecurity in the project area and political uncertainty. An Action Plan has been prepared to enhance the likelihood of sustainability of all the projects. Resources Availability at Federal and State Levels for O&M - Since sustainability would rely on the ability of states to cover a large part of the operation and maintenance costs of the projects after MDTF-N closes, the study examined the budget situation of the Northern states involved. During the CPA, federal transfers have formed the backbone of resources available for Northern states to finance their different expenditure obligations. The transfers made up an average of about 62 percent of the annual revenues of Northern States which totaled SDG 5.1 billion between 2007 and 2009. The estimated costs for operation and maintenance of MDTF-N operations in the Northern States amount to about SDG 110 million per year, just a fraction of the total annual revenues of the States. Similarly the operation and maintenance costs of the two operations implemented at the national level (e.g., Microfinance and transport –NETREP-), estimated at SDG 30 million per annum are also very small relative to the federal budgets. However, with the secession of the South, it is likely that both the federal and state government will face revenue shortfalls. The 2011 amended budget approved by the National Assembly on July 21, anticipates revenue losses by 12 percent in 2011, and plans to commensurately cut its total expenditure. To the extent that further spending cuts are inevitable in 2012 and onwards, serious concern is being raised on public investment expenditures and the state-level transfer, as they were highly vulnerable to fiscal adjustment pressure despite their importance in serving national development agenda. The extent to which this would adversely affect the sustainability of the MDTF-N portfolio remains unclear, but the relatively small share of the O&M costs requirements of the MDTF-N portfolio suggests that this risk is limited. Thus, the study calls for Governments (Federal and States) to formally earmark adequate resources in the budgets for proper operation and maintenance of the MDTF-financed operations following the closure of the

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MDTF-N. It is anticipated, though, that the Sudanese Government will have to balance the need for fiscal consolidation with the continued demands of the country’s development agenda. This will require not only the focused effort of the government and its citizens, but also the ongoing support and dedication of donor partners in order to continue the gains made under efforts like the MDTF-N

Sustainability Prospects in Basic Service Delivery Education and Health - National and sub-national governments need to assume increasing responsibilities to cover running expenses if basic service facilities are to be sustained. Households have been making major contribution to access social services despite the GoNU policies of free basic education, and free health care for children under five and pregnant women. Households contribute toward the running costs of basic services such as maintenance, teacher incentives, water, and electricity. In 2008/09, it is estimated that the average household contribution to school running costs was SDG 15 per student, higher than the estimate (SDG 12) for public spending on school running costs per student. For health services, households’ expected financial contributions are in most cases beyond their means. The adequacy of public funding for proper O&M of social service facilities will depend on the aggregate amount of public resources made available, but also on the composition of public expenditures and their management. At present, current expenditures in states’ budgets account for the majority of total spending. Within current expenditures, staff salaries account by far for the largest share, leaving little resources to cover other running expenses. There is also ample room to improve the efficiency of public expenditures. The recently conducted and MDTF-N funded Public Expenditure Tracking Survey, provides insights on the links between public spending and outcomes; transparency, predictability and execution of budgets; efficiency and poverty reduction impact of public expenditures; and furthers our understanding of service delivery performance. Solar electrification and water supply are reaching more rural places and people. Communities have mobilized to ensure benefits are sustained. They have shown strong initiative in operating and maintaining solar electrification and water projects. For water projects, it is important that the current partnership between communities and the states’ water authorities that define the role, responsibilities, and revenue sharing arrangements be maintained to help improve the sustainable management of water points. Consolidation of support by authorities on organizational aspects and management such as bookkeeping would provide strong bases for sustainability of the projects. Infrastructure and Rural Development Considerable progress in the rural and transport sectors have been achieved under the MDTF-N program but there is a need to ensure full completion of project activities. For the agricultural projects, support to beneficiaries should be pursued in the following areas: (i) improved husbandry practices in farming; (ii) proper maintenance arrangements for the water points and pumps; (iii) management of new livestock markets; and (iv) training on financial aspects relating to fees collection and bookkeeping. In this context, more effective roles should be performed by line ministries of agriculture and/or animal resources in agricultural research, extension and training support in coordination with states and local levels within the federal structure of Sudan.

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Private provision of these functions should also be sought, starting with activities such as veterinary services where interest for private involvement is readily available. For the infrastructure activities, the sustainability of the road program largely hinges on (i) the proper completion of the roads to appropriate technical standards; and (ii) the inclusion, by the National Highway Authority (NHA), of these roads as an integral part of the country’s priority road network which will ensure their maintenance as per the national policy. Finally, institutional capacity and human resources need to be further strengthened at the NHA and the Sudan Railway Corporation.

Impact of insecurity on ongoing MDTF-N projects The conflict in South Kordofan and Blue Nile states—two major recipient of MDTF-N program—is adversely affecting the timely completion and sustainability of planned activities of several projects, including CDF (community development), BEP (education), DHSDP (health), and NETREP (transport).

Environmental and Social Sustainability Issues With the exception of the road and other infrastructure operations, most of the MDTF-N supported interventions are small scale community driven type projects and would have very little or no significant negative environmental or social impacts. However, the analysis recommended measures to enhance projects’ full compliance with the Bank safeguard policies. Main Recommendations of the Study – Exit Strategy The sustainability costs of maintaining MDTF-N results are small relative to national and states’ budgets; nevertheless, the study has developed an exit strategy with the view to properly prepare the handover of MDTF-N projects to government and sub-national government levels after the MDTF-N period. The action plan for the exit strategy includes: ensure that all MDTF-N facilities meet appropriate technical standards by the end of the project; each project to prepare annual budgets in consultation with the state authorities that would provide for adequate funding resources for O&M. The budget would cover staffing, equipment, supplies and other resources to ensure proper functioning of MDTF-N funded facilities. The strategy also covers strengthening capacity at national, state and local levels to enhance efficient resource management; and enhancing stakeholder’ ownership and participation to sustain benefits. It also outlines main recommendations at the national, state and local levels. The issue of replicability of MDTF-N projects is closely related to their sustainability. For the time being, and pending proper implementation of the exit strategy, strong candidates for replicability or scaling up include the CDF project. Small scale community driven sub-projects funded by CDF such as solar energy, and water supply have been embraced by the communities. One of the main features of these replicable models relates to placing provision of social services within a broad framework of livelihood where income generation by community members is an integral part of the project. Other possible candidates include activities carried out under the livestock project, such as development of livestock markets that features management by autonomous non governmental entities; support to gum Arabic producers, including support in microfinance; and, to the extent that the proposed exit strategy is implemented, in particular for the provision of O&M by Federal and State governments, the education and health projects should be considered.

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تقييم استدامة برنامج صندوق المانحين القومي

ملخص واف

السياق العام

في سياق اتفاقية السالم 2005) في MDTF-Nمتعدد الجهات المانحة في السودان ( المانحين القوميصندوق تم إنشاء الشامل في السودان. وصمم هذا الصندوق لتنفيذ أنشطة تركز على دعم السالم ومساندة االنتعاش والتنمية في المناطق المتضررة من الحرب، مثل أبيي، وجنوب كردفان، والنيل األزرق، وغيرها من المناطق الفقيرة المحرومة في شمال السودان.

مشروعا، سبعة منها تم إقفالها، أما الثمانية المتبقية فما زالت جارية ومن المتوقع أن يتم إقفالها 15حافظة هذا الصندوق وتضم . 2013في ديسمبر/كانون األول

النتائج المحققة

شروع على ما يلي: شهد تنفيذ حافظة هذا الصندوق تقدما حيث تحققت نتائج مهمة على أرض الواقع. وتشتمل نواتج هذا الم) زيادة معدالت االلتحاق في مدارس التعليم األساسي في المناطق المستهدفة، وتحقيق منافع لحوالي نصف مليون تلميذ 1(

خدمات الرعاية الصحية على مستوى المجتمعات المحلية ، وتضمن ذلك االستفادة من ) زيادة 2في المائة فتيات)؛ ( 49(منهم في المائة في معدالت المواليد برعاية أطقم صحية ماهرة، ومن ثم اإلسهام في خفض معدالت الوفيات؛ 22زيادة بلغت نسبتها

كيلومترا من خطوط السكك الحديدية بين شمال 446) إعادة تأهيل 4ألف شخص؛ ( 700) توفير مياه نظيفة ألكثر من 3() إدخال عملة جديدة وتنفيذ تعداد السكان، 5ترات)؛ (كيلوم 207طرق ( 3وجنوب السودان، ومواصلة أعمال اإلنشاءات في

) بناء القدرات وتضمن ذلك تدريبا إداريا وفنيا ألكثر من ألف 6وهما من األحكام الرئيسية الفارقة التفاقية السالم الشامل؛ (راسات تغطي قطاعات موظف حكومي على المستويات: الفيدرالي (االتحادي) والوالئي والمحلي، وكذلك تنفيذ عدد من الد

قوية تفيد إمكانية أن تحقق مؤشراتوعلى الرغم من وجود رئيسية، مثل التعليم والصحة والنقل والزراعة وادارة المالية العامة. مشروعات هذا الصندوق إسهاما في زيادة معدالت تحقيق األهداف اإلنمائية لأللفية، ال تزال االستدامة تمثل مشكلة، ومن ثم

المبرر لهذه الدراسة. كانت

أهداف الدارسة

يتمثل الهدف الرئيسي لدراسة االستدامة في تقييم قدرات الصندوق في تحقيق النتائج المرجوة والحفاظ عليها، وكذلك تقييم وق وسيؤدي ذلك إلى إعداد إستراتيجية خروج لتسليم مشروعات الصند الترتيبات الضرورية لتحقيق استدامة لهذه النتائج.

ألصحاب المصالح الرئيسيين ومنهم الحكومة، وعلى وجه التحديد على المستويين الوالئي والمحلي، وكذلك المستفيدين من ويتضمن إعداد هذا التسليم تقييم تكاليف التشغيل والصيانة الخاصة ببرنامج الصندوق، واقتراح أنشطة لتعزيز المشروع.

لي، وتعزيز مسؤولية مشاركة أصحاب المصالح المباشرة. القدرات على المستويين الوالئي والمح

نهج الدراسة

التي تواجهها المشروعات على مدى العمر االفتراضي المتوقع لها، ومرونتها إزاء هذه تقييما للمخاطرتضمنت دراسة االستدامة وتتضمن العوامل قيق االستدامة. المخاطر. كما تستعرض هذه الدراسة سمات التصميم التي قد تسهم أو ال تسهم في تح

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المرونة الفنية التي تتناول جودة اإلجراءات التدخلية؛ واالستدامة الرئيسية المستخدمة لقياس المرونة الخاصة بكل عملية: والمحلي) المالية واالقتصادية للعملية؛ واآلثار االجتماعية والبيئية؛ ومسؤولية الحكومة (على المستويات: الفيدرالي والوالئي

وأصحاب المصالح المباشرة (ويشمل ذلك المجتمع المحلي) عن العملية؛ والمساندة المؤسسية والخاصة بالسياسات؛ وأثر . وتم تجميعها في البداية على النسبة لمختلف مشروعات الصندوقوتم عمل تقديرات لتكاليف االستدامة ب العوامل الخارجية.

المناسب إلدارة أكثر المركزية للنفقات ذات الصلة وتسليم المشروعات للمستويات المحلية؛ وفي المستوى الوالئي بهدف اإلعدادالمرة الثانية، تم تجميعها على المستوى القطاعي إلرشاد السياسات والنفقات القطاعية لمختلف األنشطة القطاعية، ال سيما

التعليم والصحة.

تدامة التي ــ إن تم الحفاظ عليها ــ ستعمل على ضمان تدفق منافع المشروع بعد سمات االس المشاريعويتضمن تصميم عدد من نهج تشاركي تم تبنيه خالل دورة المشروع؛ والتشديد على بناء القدرات المحلية؛ تاريخ إقفال هذا الصندوق. ويتضمن ذلك:

ظمات غير الحكومية؛ واالستفادة من الهيكل وتعزيز مسؤولية أصحاب المصالح المباشرة؛ وابرام شراكات مع المحليات والمناإلداري للحكومة المحلية بوصفه أداة للتنفيذ؛ واشتمال عناصر تعمل على تعزيز التنظيم االجتماعي؛ وتعبئة المجتمعات

. )Empowerment( المحلية وتمكينها من أسباب القوة

احتمالية استدامة العمليات المختلفة

، أي ما إذا كانت االستدامة محتملة أو غير مؤكدة أو غير مشروعمن خالل هذه الدراسة تم تقييم احتمالية استدامة كل مشروعا تم تقييمها، 13محتملة، وذلك باستخدام عناصر التصميم وتحليل عناصر االستدامة الرئيسية المبينة أعاله. ومن بين

محتملة (مشروع التعليم األساسي، وصندوق تنمية المجتمع، ومشروع بدء األعمال في جنوب منها على أنها 7تم تقييم استدامة ومشروع بدء األعمال في النيل األزرق، ومشروع التمويل األصغر، ومشروع السلطة القضائية وصندوق المساعدة ،كردفان

ة (المشروع الوطني الطارئ للنقل واعادة التأهيل، مشروعات على أنها غير مؤكدة في هذه المرحل 5الفنية). وتم تقييم استدامة ومشروع خدمات الرعاية الصحية الالمركزية، ومشروع تحسين تسويق الماشية، ومشروع إحياء إنتاج الصمغ العربي، ومشروع

، وقد نتج ذلك والالمركزية). واعتبرت استدامة مشروع واحد غير محتملة (مشروع بدء األعمال في أبيي) العامة الخدمة إصالحوتم إعداد خطة عمل لزيادة باألساس عن ضعف أداء التنفيذ، وانعدام األمن في منطقة المشروع، وضبابية المشهد السياسي.

احتمالية استدامة جميع المشروعات.

نظرا ألن االستدامة تعتمد على قدرة الواليات على تغطية توفر الموارد على المستويين الفيدرالي والوالئي للتشغيل والصيانة ــجزء كبير من تكاليف تشغيل وصيانة المشروعات بعد إقفال الصندوق، تناولت هذه الدراسة بالفحص موقف الموازنة للواليات

لموارد المتاحة للواليات الشمالية الشمالية المعنية. وأثناء اتفاقية السالم الشامل، شكلت التحويالت الفيدرالية العمود الفقري لفي المائة من اإليرادات السنوية للواليات الشمالية التي 62وبلغت هذه التحويالت لتمويل التزاماتها المختلفة المتعلقة بالنفقات.

يانة عمليات لتقديرية لتشغيل وص. وتبلغ التكاليف ا2009و 2007مليار جنيه سوداني في السنوات ما بين 5.1بلغ إجماليها ماليين جنيه سوداني سنويا، وهذا المبلغ مجرد جزء 110في الواليات الشمالية حوالي القومي المانحينصندوق (مشاريع)

بسيط من إجمالي اإليرادات السنوية للواليات. وعلى نحو مماثل نجد أن تكاليف التشغيل والصيانة للعمليتين المنفذتين على

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30التأهيل) المقدرة بنحو واعادة للنقل الطارئ الوطني سبيل المثال التمويل األصغر والنقل ــ المشروعالمستوى الوطني (على مليون جنيه سوداني سنويا تعتبر بسيطة للغاية بالنسبة للموازنات الفيدرالية.

ية تعاني عجزا في اإليرادات. ومهما يكن من أمر، فمع انفصال الجنوب، من المرجح أن كل من الحكومة الفيدرالية والوالئ

يوليو/حزيران إلى حدوث نقص في 21المعدلة والمعتمدة من المجلس الوطني في 2011وتشير التنبؤات بحسب موازنة ونظرا ، وبالتالي هناك خطة لخفض إجمالي اإلنفاق بما يتناسب مع هذا النقص. 2011في المائة في 12اإليرادات بنسبة

وما بعدها، تثور مخاوف شديدة بشأن نفقات االستثمارات العامة والتحويالت على مستوى 2012فاق في لحتمية خفض اإلنالوالية، نظرا ألنها معرضة لمخاطر شديدة من جراء الضغوط المتأتية من ضبط المالية العامة، وذلك على الرغم من أهميتها

المانحينصندوق ذلك على استدامة حافظة مشروعات ر المعاكس لفي خدمة أجندة التنمية الوطنية. وال يزال نطاق التأثيغير واضح، لكن النسبة الضئيلة نسبيا من متطلبات تكاليف التشغيل والصيانة لحافظة مشروعات الصندوق تشير إلى القومي

ارد إضافية على نحو رسمي وبالتالي، تدعو هذه الدراسة الحكومات (الفيدرالية والوالئية) لتخصيص مو محدودية هذه المخاطر. بعد إقفال الصندوق. القومي المانحينصندوق نحو سليم للعمليات الممولة من في الموازنات من أجل التشغيل والصيانة على

Fiscal( ورغما عن هذا، تشير التنبؤات إلى أن الحكومة السودانية سيتعين عليها الموازنة بين الحاجة إلى تدعيم المالية العامة

Consolidation( .وسيتطلب هذا ليس فقط جهود مركزة من جانب الحكومة والمتطلبات المستمرة ألجندة التنمية في البالدوالمواطنين، ولكن أيضا المساندة المستمرة وتكريس الجهود من جانب الشركاء المانحين لالستمرار في المكاسب المحققة من

خالل جهود مثل هذا الصندوق.

الستدامة في تقديم الخدمات األساسيةآفاق ا

تحمل المزيد من المسؤوليات لتغطية لى الحكومات على المستوى الفيدرالي والوالئي والمحليع التعليم والرعاية الصحية ــي المصروفات الجارية لتحقيق االستدامة لمنشآت ومرافق الخدمات األساسية. ومن المالحظ أن األسر تسهم إسهامات كبيرة ف

توفير سبل الوصول إلى الخدمات االجتماعية، على الرغم من سياسات حكومة الوحدة الوطنية الخاصة بمجانية التعليم وتساهم األسر في التكاليف الجارية األساسي، ومجانية خدمات الرعاية الصحية لألطفال دون الخامسة والنساء الحوامل.

أشارت التقديرات إلى أن متوسط 2008/2009وفي لمين والمياه والكهرباء. للخدمات األساسية، مثل الصيانة وحوافز المعجنيها) 12جنيها سودانيا للطالب (بمعدل أعلى من المقدر البالغ 15مساهمة األسر في التكاليف الجارية للمدارس بلغت

ة الصحية، نجد أن المساهمات المالية وبالنسبة لخدمات الرعاي لإلنفاق العام على التكاليف الجارية للمدارس لكل طالب. المتوقعة لألسر تتجاوز في معظم الحاالت إمكانات هذه األسر.

وسيعتمد مدى كفاية التمويل العام ألعمال التشغيل والصيانة على نحو سليم لمنشآت ومرافق الخدمات االجتماعية على مجموع

وفي الوقت الحالي، تمثل النفقات الجارية في موازنات قيمة الموارد العامة المتاحة، وكذلك مكونات النفقات العامة وادارتها. وفي إطار النفقات الجارية، تمثل رواتب الموظفين النصيب األكبر، وبالتالي فإن الموارد نفاق. الواليات غالبية إجمالي اإل

تتبع ويتيح مسح وهناك أيضا مجال كاف لتحسين كفاءة النفقات العامة. المتبقية لتغطية المصروفات الجارية األخرى قليلة.

آراء ورؤى ثاقبة بشأن الروابط بين اإلنفاق القومي المانحينصندوق من تم القيام به مؤخرا بتمويلالعام الذي اإلنفاق مسار

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العام والنواتج؛ والشفافية، والقدرة على التنبؤ، وتنفيذ الموازنات؛ وأثر اإلنفاق العام على الكفاءة وتقليص الفقر؛ وزيادة فهمنا ألداء تقديم الخدمات.

اقة الشمسية تصل المزيد من المناطق الريفية واألشخاص في هذه المناطق. وقد ونجد اآلن الطاقة الكهربائية المولدة من الط

وأبدت هذه المجتمعات مبادرة قوية في تشغيل وصيانة احتشدت المجتمعات المحلية لضمان تحقيق االستدامة لهذه المنافع. وعات المياه، من األهمية بمكان الحفاظ على وبالنسبة لمشر مشروعات الكهرباء المولدة من الطاقة الشمسية ومشروعات المياه.

الشراكة الحالية بين المجتمعات المحلية وسلطات المياه في الواليات التي تحدد الترتيبات الخاصة بتقاسم األدوار والمسؤوليات من جانب السلطات واإليرادات، وذلك للمساعدة في تحسين اإلدارة المستدامة لنقاط إمدادات المياه. وسيعمل توطيد المساندة

المعنية بشأن الجوانب التنظيمية واإلدارية، مثل إمساك الدفاتر على إقامة األسس القوية الستدامة هذه المشروعات.

البنية التحتية والتنمية الريفية

، لكن ثمة حاجة وميالق المانحينصندوق الريفية والنقل في إطار برنامج تم إحراز تقدم كبير للغاية في قطاعي تنمية المناطق وبالنسبة للمشروعات الزراعية، يتعين تتبع مساندة المستفيدين في المجاالت لضمان اإلنجاز التام ألنشطة هذه المشروعات.

) إدارة أسواق 3) ترتيبات الصيانة المناسبة لنقاط ومضخات المياه؛ (2) تحسين ممارسات الفالحة والزراعة؛ (1( التالية: ) التدريب على الجوانب المالية ذات الصلة بتحصيل األتعاب والمصروفات وامساك الدفاتر. وفي هذا 4دة؛ (الماشية الجدي

أو كالهما) في البحوث -السياق، يتعين القيام بأدوار أكثر فاعلية من جانب الوزارات التنفيذية (الزراعة أو الثروة الحيوانيةبالتنسيق مع الواليات وعلى المستوى المحلي في إطار الهيكل الفيدرالي للسودان. الزراعية واإلرشاد الزراعي ومساندة التدريب

كما يتعين االستعانة بالقطاع الخاص للقيام بهذه الوظائف بدءا بأنشطة مثل الخدمات البيطرية حيث إن هناك اهتمام من جانب ) 1ن استدامة برنامج الطرق تعتمد اعتمادا كبيرا على (وبالنسبة ألنشطة البنية التحتية، نجد أ القطاع الخاص للقيام بذلك.

) قيام الهيئة القومية للطرق السريعة بإدراج هذه الطرق 2استكمال الطرق على نحو سليم وفق المعايير الفنية المناسبة؛ و(وفي نهاية اسة الوطنية. باعتبارها جزءا ال يتجزأ من شبكة الطرق ذات األولوية في البالد؛ إذ سيضمن ذلك صيانتها وفق السي

المطاف، يتعين تعزيز القدرات المؤسسية والموارد البشرية لدى الهيئة القومية للطرق السريعة وهيئة سكك حديد السودان.

أثر انعدام األمن على المشروعات الجارية للصندوق

الواليات المستفيدة من برنامج الصندوق ــ تأثيرا يؤثر الصراع الدائر في واليتي جنوب كردفان والنيل األزرق ــ وهما من كبرى سلبيا على إنجاز أنشطة العديد من المشروعات المخطط لها في الوقت المحدد وكذلك استدامتها، ويتضمن ذلك مشروعات

التأهيل واعادة نقللل الطارئ الوطني التنمية المجتمعية، والتعليم األساسي، والمركزية نظام الرعاية الصحية والتنمية، والمشروع (النقل).

قضايا االستدامة البيئية واالجتماعية

باستثناء العمليات الخاصة بالطرق وغيرها من مرافق البنية التحتية، نجد أن معظم اإلجراءات التدخلية التي يدعمها الصندوق ر البيئية أو االجتماعية السلبية لها ضئيلة تمثل مشروعات صغيرة النطاق مدفوعة باعتبارات المجتمعات المحلية، وستكون اآلثا

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بسياسات الحماية ومهما يكن من أمر، يوصي هذا التحليل بتدابير لتعزيز االلتزام التام من جانب هذه المشروعات أو منعدمة. . البيئية واالجتماعية

االستدامةالتوصيات الرئيسية للدراسة ــ إستراتيجية

الخاصة بالحفاظ على نتائج مشروعات الصندوق قليلة بالنسبة للموازنات الوطنية والوالئية؛ وعلى أية تعتبر تكاليف االستدامة والمستويات الحكومية دون حال، وضعت الدراسة إستراتيجية خروج بهدف االستعداد السليم لتسليم مشروعات الصندوق للحكومة

ضمان أن جميع مرافق ومنشآت الصندوق : االستدامةإلستراتيجية بعد انقضاء مدة الصندوق. وتتضمن خطة العمل الفيدراليةمستوفية للمعايير الفنية مع نهاية المشروع؛ وقيام كل مشروع بإعداد موازنات سنوية بالتشاور مع سلطات الوالية تحدد موارد

من الموارد األخرى لضمان التشغيل تمويل كافية للتشغيل والصيانة. وستغطي الموازنة الموظفين والمعدات والمستلزمات وغيرهاالسليم للمرافق والمنشآت الممولة من الصندوق. وتغطي هذه اإلستراتيجية أيضا تعزيز القدرات المؤسسية على المستويات

نافع. لتعظيم كفاءة إدارة الموارد؛ وزيادة مسؤولية ومشاركة أصحاب المصالح لتحقيق االستدامة للم الفيدرالي والوالئي والمحلي والوالئي والمحلي. الفيدراليكما توضح التوصيات الرئيسية على المستويات:

وفي الوقت الحالي، وبشرط التنفيذ السليم وهناك ارتباط وثيق بين مسألة إمكانية تكرار مشروعات الصندوق واستدامتها.

أو توسيع والتوسيعشروعات المرشحة بقوة للتكرار ، نجد أن مشروع صندوق التنمية المجتمعية من الماالستدامةإلستراتيجية وقد تبنت المجتمعات المحلية مشروعات فرعية صغيرة النطاق مدفوعة باعتبارات هذه المجتمعات وممولة من صندوق نطاقها.

ماذج القابلة للتكرار التنمية المجتمعية، مثل مشروعات الطاقة الشمسية وامدادات المياه. وترتبط إحدى السمات الرئيسية لهذه النوالمحاكاة بوضع تقديم الخدمات االجتماعية في إطار أوسع نطاقا لسبل كسب العيش حيث يمثل تحقيق الدخل من جانب أفراد

أنشطة يتم تنفيذها في األخرى المرشحة للتكرار والتوسيعوتتضمن المشروعات المجتمع المحلي جزءا ال يتجزأ من المشروع. لماشية، مثل تنمية وتطوير أسواق الماشية حيث تتم إدارتها من جانب جهات مستقلة غير حكومية؛ ومساندة إطار مشروع ا

على نحو مناسب االستدامةمنتجي الصمغ العربي، ويتضمن ذلك مساندة التمويل األصغر؛ وفي حدود تطبيق إستراتيجية انب الحكومات الفيدرالية والوالئية، يتعين النظر بعين االعتبار وسليم ال سيما ما يتعلق بتقديم أعمال التشغيل والصيانة من ج

في مشروعات التعليم والرعاية الصحية.

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1. INTRODUCTION

A. Background 1. The National Sudan Multi Donor Trust Fund (MDTF-N) was set up in 2005 as part of Sudan’s Comprehensive Peace Agreement (CPA). Donors and the government authorities requested the World Bank/International Development Association (IDA) to administer the MDTF-N. The MDTF-N is designed to address recommendations from the Sudan’s Joint Assessment Mission (JAM) conducted in 2005 which informed the five-year plan (2007-2011). Accordingly, it focuses on consolidating peace and supporting recovery and development in war-affected and least developed areas in the 15 Northern states. The MDTF-N portfolio is composed of 15 projects, seven of which are closed. Funding commitments total US$ 604 million, including US$252 and US$352 by the MDTF-N and GONU, respectively (Annex Table 1.1).

B. Objectives of the MDTF-N 2. The overall objective of the MDTF-N is to help consolidate peace and support pro-poor growth. A balanced approach encompassing the following five principles guided MDTF-N-supported programs and projects: Support priority national programs to consolidate peace ( Census, New Currency,

Emergency National Infrastructure); Support state- and locality-level programs with high visibility in war affected zones in

Northern States and the Three Protocol Areas (Abyei, Blue Nile, and South Kordofan) that have been much affected by the conflict;

Support development programs for smallholder farmers and pastoralists, for the Gum Arabic sub-sector, and for rural finance;

Support for decentralization (capacity building for federal, state and local-level institutions, and reform of public procurement and financial management) with the view to expand access to basic services; and

Lay the groundwork for good governance, in particular by enhancing capacity to implement the rule of law (judiciary project).

3. In addition, the MDTF-N aimed at promoting donor coordination in supporting Sudan’s development process and to reduce transaction costs by simplifying the external flow of funds and facilitate management of aid in a fragile country context.

C. MDTF-N Portfolio

a. Portfolio Composition

4. Broadly, the portfolio covers three main themes: (i) Access to Basic Services and Community Development, including Emergency projects in the three Protocol Areas; (ii) Infrastructure and Rural Development; and (iii) Technical Assistance for Institutional Development and Capacity Building.

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5. Access to Basic Services and Community Development. Related activities have been seeking to: (i) improve access to, and quality of, basic education by building and rehabilitating schools, improving curriculum, and training teachers; (ii) expand access to basic health services in targeted states in the short term, and develop decentralized health system delivery for the medium to long term; and (iii) improve access to other community services such as solar energy and safe water. The projects have targeted the conflict-affected and least-developed states of Northern Sudan such as South Kordofan, North Kordofan, Blue Nile, Kassala, and Red Sea. The projects include the Basic Education project (US$15.0 million); the Decentralized Health System Development project (US$12.0 million); the CDF project (US$95.0 million); and components of other projects such as South Kordofan, Blue Nile, and Abyei Start-up Emergency projects. 6. The Community Development Fund (CDF) project has sought to empower communities to prioritize and implement projects through community participation with funds being channeled directly to communities that have demonstrated capability in managing and using these funds effectively and efficiently. Activities include infrastructure facilities such as water supply, solar panels, schools, and health facilities. A number of these have been built at a lower cost than most other providers. The Emergency Start-up operations provide basic services (education, health, and water supply), targeted support to small farmers, and capacity development for the local administrations. Like the CDF, they use elements of community participation. 7. Infrastructure and Rural Development. A number of the projects were directed at helping to improve transport infrastructure and to support productive activities in the different states. The National Emergency Transport Project (NETREP, US$ 155 million) helped rehabilitate critical rail infrastructure to link the North and the South, as well as road transport infrastructure in war-affected areas. It also includes assistance to help improve the operational capacity of the National Highway Authority (NHA), the Sudan Railway Corporation and other transport agencies. 8. The MDTF-N projects in the agriculture sector emphasize food security and poverty alleviation. The livestock project is piloting promising interventions to enhance delivery of animal health services including through the private sector, and improved marketing in selected rain-fed areas of Central and Eastern Sudan. The Gum Arabic project aims at improving income of small-scale Gum Arabic producers (GAP) through enhancement of farm productivity and marketing efficiency and development of microfinance system for Gum Arabic Producers Association (GAPA). In addition, there are small rural development components of the Abyei, South Kordofan, and Blue Nile Start-up Emergency projects that cover rehabilitation of small rural infrastructure, provision of farm inputs, and diversification of economic activities such as in-land fishery. 9. A micro-finance project (US$20 million) seeks to provide support for the development of a conducive policy and regulatory environment for microfinance, to establish microfinance institutions, and to ensure access to finance by tens of thousands of small entrepreneurs. Though much consolidation efforts still remain, there has been encouraging and significant progress over the past year in establishing a potential microfinance network.

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10. Technical Assistance. The MDTF-N technical assistance program focused on institutional development and capacity building. Although activities have been limited in scope, important achievements have been realized. MDTF-N main technical assistance support was provided through the TAF (US$5.0 million) and Judiciary (US$5.0 million) projects that are already closed as well as through the ongoing Public Sector Decentralization and Capacity Building Project, PSCAP (US$2.57 million). These operations have financed strategically relevant studies including the formulation of a national Transport Master Plan, the decentralization of health services, and a study on the promotion of rain-fed semi-mechanized farming. They also made important contributions to training of Government officials and are helping to develop an operational framework for fiscal decentralization and fiduciary reform.

11. In addition to theme variations, the MDTF-N projects also vary by area covered, by funding and implementation arrangements (national, state), and by the emergency nature of most projects. Out of the total 15 projects approved under the MDTF-N, five were funded and implemented at the national level (TAF, Census, New Currency, Microfinance, and PSCAP). The remaining MDTF-N projects focused on less developed and war-affected Northern states, including the three emergency projects in the protocol areas (South Kordofan, Blue Nile and Abyei).

b. Implementation Issues and Follow-up Measures

12. The April 2010 Country Portfolio Performance Review (CPPR) identified a number of issues that were affecting project implementation and proposed an action plan to resolve them. The CPPR action plan agreed upon with the government and implementing agencies included: (i) the resumption of Government counterpart payments including VAT and tax payments; (ii) improved planning and closer management of procurement (to help accelerate disbursements) particularly where there are important capacity gaps; (iii) improved monitoring and evaluation (revised results frameworks adopted, and monitoring staff appointed); (iv) improved project compliance with World Bank safeguard policies (CPPR/safeguards desk review recommendations being implemented); and (v) better management of gender gaps (CPPR Gender Action Plan being implemented). 13. However, implementation of the CPPR recommendations has been mixed. Procurement and contract management issues continue to slow implementation progress and provision of counterpart funding has been irregular although some improvement has been recorded recently. Following an in-depth review of procurement and contract management activities by the Bank’s fiduciary team which included extensive field visit, a monthly review of progress on implementation and disbursement has been launched by the Bank beginning May 2011. These monthly mini-retreats which involve Bank fiduciary staff, projects’ Task Team Leaders (TTL) and the Monitoring Agent are expected to formulate solutions on key implementation hurdles to be promptly addressed by project coordinators or government authorities.

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2. THE SUSTAINABILITY STUDY

A. Rationale and Objectives of the Sustainability Assessment 14. The main objective of the sustainability study is to evaluate the capacity of the MDTF-N interventions to achieve and maintain their intended results and to assess what arrangements are necessary to sustain these results. This would imply: first, the possibility that the projects would either be able to generate sufficient financial revenue and/or obtain resources from national, state governments or localities, and communities to cover their financial costs to ensure the sustainability of the results achieved; second, a gradual but steady take-over of the projects by the line ministries’ and state governments and project beneficiaries should take place by December 2012. The proper preparation of this handover includes assessing other implementation arrangements such as building local capacity in state ministries and other institutions, and strengthening beneficiaries’ ownership and participation. A related benefit of such a smooth hand over is that it could help provide guidance on how to pursue scaling up of project activities e.g. CDF-type projects, after the MDTF-N period.

15. The key elements of the study include:

(i) An assessment of the physical quality of MDTF-N interventions (infrastructure and equipments) with the view to identify major deficiencies that might adversely affect the functionality/operation of the interventions. (ii) An assessment of the maintenance costs of all development interventions that have been put in place by the MDTF-N such as roads, schools, health, electricity and water facilities, and possibly of other planned interventions. (iii) An assessment of the operational costs of all development interventions that have been supported by the MDTF-N such as wages and salaries, office rent, utilities, and possibly of other planned interventions. (iv) A detailed analysis providing options on how operations and maintenance activities can be sustained i.e. who should pay for them and who should be responsible for them among beneficiaries/communities, local, state, and federal government, including an analysis of cost recovery systems. (v) A critical assessment of the replicability of some of the MDTF-N projects such as CDF in other Northern states and what would be an appropriate scaling up method.

B. Methodology and Approach of the Sustainability Study 16. Sustainability measures the resilience to risk of the development benefits over time. It involves an assessment of the risk/uncertainties faced by the projects over their expected useful life and whether adequate arrangements are in place to help avoid or mitigate the impact of those uncertainties/risks. Resilience to risks includes several criteria and measures: (i) technical resilience which addresses the quality and maintenance requirements of the infrastructure, and whether or not there are innovative technology and systems involved, and how easy it would be to maintain these; (ii) financial resilience which addresses how the operation and maintenance budget would be funded including through policies on cost recovery; (iii) economic impact on

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local and national economy; (iv) social e.g. the strength of stakeholder support and/or mitigation of any negative social impacts; (v) environmental resilience including both positive and negative impacts; (vi) Government ownership of the projects e.g. ownership by central and state governments and agencies, provisions in government budgets for O&M; (vii) other stakeholder ownership including local participation, civil society/NGO involvement, and private sector engagement; and (viii) institutional support e.g. from project entities and/or related to legal/legislative framework. 17. To generate necessary data for the sustainability study, a local team of engineers was contracted out. These consultants, in collaboration with the MDTF-N Coordination Unit at the Ministry of Finance and National Economy, employed a combination of assessment techniques. These include review of existing documentation, discussion with project entities and the Monitoring Agent, formal surveys, and field visits to assess the quality of infrastructure built, and focus group discussions/interviews with partner agencies and other stakeholders. 18. An inventory covering MDTF-N supported infrastructure, equipments, and development facilities was prepared. This covers all facilities built, rehabilitated, or equipped under MDTF-N. Given the large number of MDTF-N interventions in several sectors, the study used a stratified/representative sample in order to assess the current functionality of facilities. The stratification took into account the diversity/size of intervention in each sector e.g. rural hospital versus basic health unit, and school versus teacher training institute, and the type of implementation e.g. health, education, and water facilities built through community participation under the CDF and probably at a lower cost/standard than under “sector projects” such as the Education or Health projects. Due to the vast geographical area covered by the MDTF-N, a sample of three states that are the primary focus of MDTF-N interventions (South Kordofan, Blue Nile, and Kassala) was covered, including field visits to targeted localities within these states. These localities are Abu Gubeiha and Delling localities in South Kordofan State; Damazein and Roseries localities in Blue Nile State; and Hamashkoreib, Kassala Rual and Wad El Helew localities in Kassala State. 19. The sustainability cost estimates of MDTF-N projects were aggregated at: (i) the national level with the view to examine whether they pose a heavy burden on the feral budget; and (ii) the state level with the view to properly prepare for a more decentralized management of related expenditures and handover of the projects to local levels. Similarly, sustainability costs were aggregated at the sector with the view to guide sector policies as well as expenditures on social services such as education and health sectors. Furthermore, the aggregation of the sustainability cost estimates at the state and sector level allowed the examination of whether these costs pose any significant pressure on state and sector budgets. The data obtained from a number of MDTF-N funded studies in the education and health sectors also facilitated an analysis of the possible allocation of the operation and maintenance costs to beneficiaries (cost recovery). In addition, design elements such as government and beneficiary ownership of the different activities, social support and community involvement, the institutional support from governments and local agencies were also considered design features that would lead to better sustainability.

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3. LIKELIHOOD OF SUSTAINABILITY FOR EACH OF THE MDTF-N PROJECTS

20. Based on the analysis of the key sustainability factors presented in para. [15] above, the study examined the likelihood of sustainability of each operation, i.e. whether sustainability is Likely, Uncertain or Unlikely, and made suggestions on how this can be improved. The main aspects that should lead to better sustainability include: (i) the participatory approach adopted throughout the project cycle; (ii) the emphasis on building local capacity; (iii) the overall institutional and political commitment and ownership at the federal and state levels; (iv) the strengthening of stakeholders’ ownership and partnerships with localities, NGOs and CBOs; (v) the utilization of the local government administrative structure as a conduit for implementation, thus inducing them to absorb recurrent operating costs; and (vi) the inclusion of elements that nurture social organization, mobilization and empowerment of local communities. Annex Table 3 presents a more detailed evaluation of each project by sustainability factor. Highlights are presented below.

A. National Emergency Transport Rehabilitation Project (NETREP)

21. The institutional and political commitments have been strong in the design and implementation of the early phase of the NETREP. At the beginning of the project, the Ministry of Transport, Roads, and Bridges (MTRB) and other key sub sector institutions and transport stakeholders were fully engaged in policy and strategy development process, and showed good commitment to the implementation process. The project design features joint financing arrangements between MDTF-N and GoNU with the latter providing a high 70 percent contribution.

22. For the rail component, the rehabilitation of the Babanousa-Wau rail line (446 km) was carried out satisfactorily and provided a vital link between the North and the South. The Sudan Railway Corporation (SRC) regularly conducts maintenance and spot improvement on the Port Sudan- Khartoum rail line, and has committed to maintaining the Babanousa-Wau rail line. These features would point to the sustainability of this component.

23. For the road component, the current institutional and organizational frameworks including a road authority -National Highway Administration (NHA)- that collects tolls on the roads and looks after maintenance of the national road network, as well as plans by NHA’s to establish a pavement management system that generates maintenance plans, are positive elements for the sustainability of the road network. However, implementation of the road component under the NETREP faces numerous challenges. There have been major delays in provision of counterpart funds, including failure by the Blue Nile State Government to finance Section 3 of the Demazein –Kurmuk road1. Thus, overall, the sustainability of the NETREP project remains uncertain. Key issues to be addressed to improve sustainability include: (i) completion of the roads at

1 The Demazein-Kurmuk road of Blue Nile State was broken into three sections, two of which were included in the MDTF-N financing. The third section of about 60 km (perhaps the most degraded part) was not included. This was on the understanding that the State Governor would finance this third section. As of now, there is no indication that the financing of this road section has been programmed.

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appropriate technical standards2; and (ii) inclusion of the roads into the priority network managed by NHA. B. The Basic Education Project (BEP)

24. The BEP follows some of the principles and elements of the community development projects in its design. Under the BEP, the school construction, though done by contractors, closely involves communities who provide labor to finish aspects of the work that are not included in the contracts. However, the quality of infrastructure construction of the schools has not been as good as expected due to poor supervision of construction, and many schools lack certain amenities such as water, electricity and school furniture. Thus, there is much room to improve their functionality. Despite these few technical issues, schools constructed under the BEP are typically much larger and better built than the CDF constructed schools. The physical upgrading of the facilities plus construction and upgrading of teacher housing facilities are expected to impact positively on retention rates in the medium and long term. In addition, a large number of the new schools are constructed using criteria to select areas that will enhance girls’ education and thus the project has responded by providing facilities for girls where necessary. State Governments have signed off on the basic schools and therefore have shown strong ownership for them. Communities have also shown clear and strong interest in the basic schools and are reportedly prepared to support some of the maintenance costs. However, financial sustainability remains an issue: although State Ministries of Education have shown willingness to recruit the required teachers and to provide school furniture, running costs (maintenance, incentives for teachers, utilities, etc) for schools are expected to be covered by localities which in the majority of cases, pass on their obligations to communities who invariably are unable to cover all the costs involved.

25.The Teacher Training Institutes (TTIs) are being built at the request of the State Ministries of Education and the Governors. Although the states have not yet made explicit arrangements for their operation and maintenance, the shortage of teachers in the states would likely lead them to keep the TTIs operational because the institutes would be needed for training teachers. Given the strong ownership of the basic schools and the institutional support for the TTIs, the sustainability of the project is rated Likely, provided that before the project closes, efforts are made to correct the few infrastructure defects, improve functionality of the schools (by providing water, fences, benches, etc.) and ensure that the state Governments provide for the operation and maintenance of the TTIs.

2 Since early September 2011, the security situation in the area has deteriorated, and the construction works in Section 1 and 2 of Demazein-Kurmuk road have stopped, raising concerns on timely completion of the road.

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C. The Decentralized Health System Development Project (DHSDP)

26. The DHSDP provides badly-needed health service expansion in poor war-affected areas. It also endeavors to initiate health system reform and to lay the groundwork for improvements in the financing and capacity development of the decentralized system. The construction/rehabilitation of health facilities under the initial financing has been completed satisfactorily and handed over to the states. Under the MDTF Additional Financing, works have commenced on three of four midwifery schools and on the rehabilitation of surgical units and maternity wards in six rural hospitals. The economic and social impacts of the project are positive with improved maternal and child health, improved access of women and children to healthcare, and possible reduction of the incidence of malaria through the distribution of about 180,000 bed nets.

27. An important objective of the project was to establish the basis for reform, including the development of the decentralized health system with sustainable financing. Technical Assistance was provided to support development planning, M&E and staff training at the State level. Financial sustainability may be an issue. Cost recovery is small and will not cover operating expenses, while arrangements have not been made (at least officially) at the Federal or State Level to provide the required financing in the Health Sector budgets. There seems to be signs of good ownership of the project by National and State Governments who welcome the infrastructure and the health services provided. Thus, it is likely that staff and some supplies will be financed for the activities of the health unit beyond the project closing date. However, the broader issue of how to institutionalize a decentralized approach to health system financing is yet to be addressed, including policy issues such as staff incentives, and provision of maintenance and operating costs for facilities and training schools. Thus, project sustainability is currently considered Uncertain. To make sustainability likely would depend very much on: the State Governments providing adequate resources for operating and maintaining the health facilities constructed; provision of required health personal by the state; fiduciary arrangements to mitigate the risk of resource mismanagement; and achieving effective donor coordination at the local level.

D. The Community Development Fund (CDF)

28. The CDF finances community priorities and initiatives mainly in the form of social infrastructure. The design is based on involvement of communities in all stages of the program including; identification of priorities, selection of sites, contracting, construction, etc. The general principle is for communities to also contribute in kind or in cash during the construction/rehabilitation phase. The percentage contribution is fixed at 10 percent but in general, average contribution appears to be less. Projects supported by the CDF are normally part of the priorities of communities included in their Community Action Plans. Normally, contracting for the construction/rehabilitation is done at the local level. The design also includes the principle that no school or health center will be constructed unless it is signed off by the

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relevant State Minister in order to ensure that the operation of such a center meets the sector standard and will be included in the state budget.

29. Several infrastructures (schools, health centers, community centers, water points, solar panels) have been financed under the CDF. In general, the quality of these facilities has been reasonably good with about 80 to 85% of the facilities deemed structurally sound. Cracks in a few of the buildings and observed roof leakages seem to have been addressed. There are however several schools and health centers with no access to water or electricity, thus reducing their functionality. Communities manage and maintain the water points and contribute to the running of the schools, sometimes using resources obtained from the water points. While both the States and Localities recognize their responsibilities in contributing to the O&M of the schools and health facilities, the Localities rely more on the communities to cover the running costs. Poor financial capacities at the community and locality levels constitute a direct risk to the financial sustainability of the interventions.

30. There have been substantial perceived economic benefits, especially for women, from the interventions in terms of reduction in time for water collection, enhanced education for girls, and improvement in health conditions and reduction in maternal deaths. On the social front, the community centers, equipped with televisions and satellite dishes, have helped in strengthening social relationships at community level. The environmental aspects of some of the facilities however need to be improved if these are to be sustained. Use of latrines in several schools and functionality of some health units have been severely impacted by shortage of water supplies. Similarly water points, especially the haffirs, are largely susceptible to contamination because of the shared use by humans and animals. MDTF-N should contribute to correct these problems before the project closes.

31. Ownership of the CDF approach by Government and other stakeholder is very strong and the commitment for its expansion by the federal and state governments as well as the Mahalliyah’s is very evident. Community ownership of the interventions, especially schools, health facilities, water points and community development centers is very high and has been significantly internalized. Communities have shown clear readiness to participate in the operation and maintenance of the facilities. On balance, even though there are still risks to sustainability of certain aspects of the CDF, overall sustainability is Likely. It would be important though that the functionality issues be addressed before the end of the project by provision of water and electricity as necessary to schools and especially the health centers. To avoid diseases, water yards have to provide separate drinking basins for animals and humans and structural defects in some of the constructions need to be corrected.

E. South Kordofan State Start-Up Emergency Project (SKSSEP)

32. The project included several interventions taken from the state and locality development plans such as rehabilitation of existing schools, water points, a vocational training center (VTC), provision of ambulances, x-ray machines, fogging machines for a health center, and a rural livelihoods support component. Some of the components were designed to include strong community participation and management such as the water points and the rural livelihoods program.

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33. All components are already completed and all facilities, including the VTC, schools, and the water points, have been rehabilitated and operational. Both roads and rural roads constructed under the project have been demined and are fully functional. The project outputs appear to be physically and technically in good shape. State Government is already funding the director and staff of the VTC and with support from the Unity Fund, has provided funding for the operating costs of the center so far. Students attending the center pay fees though the amounts are not enough to cover maintenance and operating costs of the center. The State Governor has verbally promised to pay for the running of the center after the project end. Rehabilitated schools already have teachers and have been provided with benches and supplies. The communities are adequately managing the water points. They levy charges for water use, and have made provisions for maintenance in collaboration with the State Water Authority. Financially, the rural livelihoods component seems to operate satisfactorily through a well functioning revolving fund system run by Village Development Committees (VDCs) which are all operational. There is a strong ownership by both the state government and beneficiary communities. The sustainability of the operation is, therefore, likely.

F. Blue Nile State Start-Up Emergency Project (BNSSEP)

34. The BNSSEP includes rehabilitation of existing schools and water points, demining of roads, a rural livelihoods component, and construction of a Center for Disease Control (CDC). The schools, water points and rural livelihoods activities were designed to include strong community participation and management. Rehabilitated schools and water points are generally in good physical condition and are functional except for a few schools where access to water remains an issue. Communities are managing the water points, levying water fees and making provisions for maintenance in collaboration with the State Water Authority. The CDC was well constructed but there was no provision for an incinerator3. MDTF-N has approved additional financing to support a new livelihoods component for the Blue Nile Fisheries Union. This component will help construct a Fisheries Service Center (FSC) for the Union and provide members with nets, boats, fishing gear, and training (including study tours abroad). The Fisheries Center will provide economic benefits to members of the Fisheries Association and help increase the supply of fish in the State and its neighbors. The operation of the FSC is expected to be the responsibility of the Fisheries Union that will cover its O&M costs. Indicative financial forecasts suggest that the Fisheries Union should be able to cover the costs involved. It will also provide an institutional basis for the sustainability of the fishery sector in Blue Nile State.

35. Ownership of the project by the State Government has been relatively good. Schools have been provided with seats/furniture with UNICEF as implementing partner, while community ownership in the schools, water points and rural livelihoods is strong. Equipment for the CDC, not included in the MDTF-N, was provided by Government through the Unity Fund. The State Ministry of Health has seconded staff to the CDC and this facility will charge for its services. However, it remains unclear if the CDC can be self sustaining in terms of operating costs and supplies. Detailed budgetary planning needs are yet to be made and no clear arrangements are in 3 The PCU is planning to construct an incinerator using counter-part funds and the Bank Environmental Specialist has been consulted in the preparation of the TOR.

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place to cover O&M. While there remain some risks for the project (especially related to the CDC) that can derail sustainability, project’s sustainability is rated as likely. Arrangements for the running and maintenance of the CDC will need a close follow up.

G. Abyei Start-Up Emergency Project (ASEP)

36. The Abyei project was designed, during a period when there was peace and stability in the area, to finance activities reflecting priorities in the area. These included water points, haffirs, and agricultural support for the communities, locality offices and vehicles for the Local Administrations, and Abyei Hospital rehabilitation. The components benefitting the communities were designed to include strong community participation and management. 37. Poor procurement performance and capacity problems with the Project Coordination Unit have considerably affected implementation progress of the project. None of the infrastructure has been completed because of persistent delays in procurement and contracting. A program to rehabilitate the area hospital has been mired in difficulties with procurement. Similarly, there have been delays in starting the agriculture component. Community support for the programs does not look strong except perhaps for the management of the water points. Under the agriculture component, inputs are to be distributed free to individual households except for tractors that are to be managed by the Ministry of Agriculture of the Abyei Area Administration (AAA). There doesn’t appear to be any arrangements for ensuring that households will be able to acquire new inputs on their own for subsequent years or that the tractors will be properly managed. Finally, there had been very little demonstration of ownership of the Abyei project by the Government or the AAA until the recent March 2011 mid-term review follow-up mission during which AAA committed to turn the project around through a strong superintendence and oversight to project implementation and bi-weekly reporting to the Bank task team. A first follow-up meeting was held between the Bank task team and AAA and PCU in May 2011 to assess progress in the implementation of the agreed upon work program with expenditure of about US$2.3 million for contracts now signed and US$ 1.0 million for contracts expected to be signed before the project’s original closing date of June 30, 2011. However, the recent deterioration of the security situation and dissolution of the AAA along with uncertainty over the status of Abyei following the independence of South Sudan indicate that the sustainability of the project at this stage is highly unlikely. H. The Micro-finance Project 38. The project includes in its design strong institutional and regulatory frameworks to support a thriving microfinance sector. As part of the early phase of the MDTF support, the Central Bank of Sudan (CBoS) defined a vision and action plan for the development of microfinance and established a microfinance unit (MFU) in 2007 at the Central Bank to supervise the evolving microfinance institutions (MFIs). Given that there was no immediate source of funding for the emerging MFIs, the CBoS gave resources to MFU to provide funding for MFIs. The funding program of MFU was based on a 5-year strategy ending in 2012, and its mandate is expected to be reviewed taking into account the role of the Sudan Microfinance Development Facility (SMDF), an agency developed

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under the project with MDTF-N funding. Over the past several months, as part of the project, CBoS has adopted a regulatory framework for the microfinance sector and has introduced a requirement for commercial banks to earmark 6 percent of their funding for micro businesses and microfinance. It has also approved increases in murabaha profit margins to encourage commercial banks to invest in MFIs. As of end May 2011, eight MFIs had obtained their licenses from CBoS with ten more in the pipeline. 39. There appears to be a very strong demand for microfinance services and economic benefits from a well functioning microfinance system would be enormous. However, the financial sustainability of the system at this stage remains uncertain since the main source of funding for MFIs (for on-lending) are the MFU of the Central Bank and SMDF (from MDTF-N funds). Prospects for the MFIs becoming financially independent in the short to medium term are not very strong since the MFIs are non-deposit taking. At project end, SMDF would not have any viable means of covering its operating costs on its own and for continuing to provide funds to the MFIs. Since the sector is in its infancy, it would require substantial support from the financial authorities for it to evolve and it would depend on the willingness of the Central Bank to provide the needed resources both for on-lending and to cover operating costs of SMDF. While this is probable, it is not certain. From an institutional point of view, MFU outreach and program activities currently overlap with SMDF lending functions and will need to be redefined to be complementary. MFU should focus more on regulating the sector and help SMDF in resource mobilization. The main factor working in favor of the project is the very strong ownership of the program by the CBoS and by the commercial banks, some of whom are creating MFIs that they support on their own. On the basis of this strong CBoS commitment, sustainability of this program can become Likely, despite the substantial risks, with continued financial and policy support from CBoS. The main measures to sustain the sector would include: (i) promoting and sustaining a more commercial approach to microfinance, (ii) further restructuring the sector through redefining the roles between MFU and SMDF and ensuring capacity-building; (iii) providing the resources necessary to continue operations in the sector in the short to medium term, and (iv) strengthening the supervision system. I. Improving Livestock Production and Marketing Project (ILPMP) 40. The ILMP’s design includes establishing livestock corridors to prevent possible conflicts between herders and farmers, creating water points for animals and for the population, and providing better marketing opportunities for herders. The project is also piloting an approach of a decentralized structure for the delivery of technical and community-managed packages for access to water, animal production, veterinary services and improved livestock marketing models. It includes elements of community participation and management through the creation and training of village development committees (VDCs) to strengthen ownership at the community level. 41. The project has rehabilitated 24 boreholes, completed 1 livestock market and is in the process of completing 5 more markets. While some State localities have been slow to provide their counterpart funds, it is expected that all the markets will be finished and equipped to good standards by project’s closing. The Livestock markets should in general be self-supporting with

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State Government services providing the normal obligatory immunization and veterinary support. The water points provided under the project are operating well under VDC management and in partnership with the State Water Authorities. A stronger role for women in the management of the water points may further increase the likelihood of sustainability. As of now, project activities appear financially sustainable. The economic impact should be positive through improved animal health, provision of water for the livestock, and better marketing arrangements. Similarly, the water points for the community as a whole and the creation of livestock routes are improving relationships between herders and non-herders in the localities concerned. State and Locality ownership have been strong and the decentralized approach for the delivery of technical and community managed packages seems to be evolving satisfactorily. The sustainability of the project at this stage appears uncertain but can be improved. The following measures will help enhance the possibility of sustainability: (i) the legal status and ownership of the rehabilitated markets have to be agreed to in consultation with the State Ministries of Livestock, the Localities and the Herders Association; (ii) the livestock markets should be managed autonomously to become self-sustaining and not be used as a source of revenue for localities who may be unwilling to provide required O&M of the markets; (iii) the completion of the demarcation of livestock routes along with the resettlement action plan; and (iv) implementation of recommendations from the study of factors contributing to conflict among pastoral, agro-pastoral and farming communities. J. Revitalizing the Sudan Gum Arabic Production and Marketing Project 42. The project involves a large number of analytical studies that have resulted in several reform measures already being implemented by the government. These reforms have started having a positive impact on the sector while the microfinance component is improving the bargaining power of the Gum Arabic Producers Associations (GAPAs). The design includes two phases with the first phase from August 2009 to June 2011 focusing on analytical studies to bridge gaps in sector knowledge and to deepen sector reform measures. It also includes training and capacity building efforts to implementing units and Gum Arabic Producers Associations (GAPAs), and initiation of a saving and revolving credit (microfinance) scheme to GAPAs. The second phase, to be financed by IFAD, would seek to expand the reforms and consolidate the microfinance system. 43. The major policy reforms include; abolishing about 13 of the 18 taxes and fees on gum production and marketing, removing the monopoly on gum trading and export, removing the floor price for gum, and introducing an auction system for gum marketing. Already there is a noticeable improvement in the production and marketing of gum Arabic with an increase in the financial and economic returns for gum producers. The price received by the producer has reportedly increased from15% of FOB price to about 50% as a result of the reforms. The project has strengthened the GAPAs through the group-based microfinance component by allowing them to provide bridge financing for their members thereby strengthening their bargaining power in marketing activities. Both the private sector and the GAPAs are also fully on board with the reforms and the microfinance revolving credit system. However, the scheme needs to be

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monitored to ensure it continues after the project and also to avoid the possible marginalization of women who currently constitute only between 19 -25% of beneficiaries.

44. Government ownership of the reforms appears strong even though vested interests, especially institutions losing fees and taxes at the federal, state or locality levels, may try to reverse them or reintroduce other fees and taxes. The challenge for the sustainability of the reforms would therefore be to ensure that these policy reforms are fully understood and effectively implemented. Currently two ministerial committees have been created to ensure that the 2009 liberalization decree be put into practice but these committees need to be given the required authority. The sustainability of the project is rated uncertain at this stage but can be improved, provided the institutional framework is endowed with capacity and authority for monitoring and ensuring that the reforms are fully implemented, and that the microfinance component is incorporated into the national microfinance. K.The Public Sector Reform, Decentralization and Capacity Building Program Support Project (PSCAP)

45. Under its original design, the PSCAP set out to “improve the government capacity at the federal, state, and local levels to deliver decentralized services to the citizens of Sudan”. Design features were very positive including: (i) a political commitment to the program of reforms and capacity building from high levels of authority in the Federal and State governments; (ii) a strong participatory approach during project preparation; and (iii) an emphasis on building capacity in Ministries, States and other agencies. However, in hindsight, the project appears overly ambitious and that the extent to which capacity has been increased for decentralized service delivery has remained somewhat limited.

46. As a result, in March 2011, the Bank task team proceeded with the restructuring of the project in close collaboration with government counterparts. This led to a revision of the project development objective (PDO), the Results Framework and monitoring indicators along with re-prioritization of activities and re-allocation of the MDTF-N funds across components. The revised PDO sets out to “improve capacity at federal and state level in the areas of human resource management, PFM, procurement, public sector training and the management and monitoring of fiscal transfers”. This restructuring puts emphasis on enhancement of the HR framework, building the capacity of training institutions, building the capacity of the Fiscal and Financial Allocation and Monitoring Commission (FFAMC) to both manage and monitor fiscal transfers to the States, and strengthen fiscal decentralization using the government’s Action plan that was formulated following the results of the Country Integrated Fiduciary Assessment (CIFA). Following the last implementation support mission in May 2011, there appears stronger commitment from the authorities which enhances the likelihood of the project success. However, for the activities to be sustainable, including implementation of new HR policies and Fiscal formulae, there needs to be provisions for a follow on project. Thus, project sustainability is rated uncertain.

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L. The Judiciary project 47. The project’s rationale still remains relevant to Sudan, as an independent and efficient judiciary is fundamental to enable citizens to access justice as a means of peaceful resolution of conflicts. The project improved the accessibility to judicial services at the national and state levels through the increase of the knowledge base of judicial staff and by improving the operational capacity of the institutions. Key project activities include construction/rehabilitation and equipment for 5 court houses, and training of judges. However the contribution of the project is relatively small4 compared to the needs of the country and therefore its impact on the judicial system of the country will be limited. To be sustainable and to have a more lasting impact, it may be useful for Government to perceive this project as a pilot and draw lessons from it for further improvements in access and quality of judicial services, in infrastructure rehabilitation and human capacity building. Activities that would result may be considered as part of a general process of improving the judiciary in Sudan. M. The Technical Assistance Facility (TAF) 48. The TAF project helped fund training of government officials at the federal and state level and supported preparation of studies to inform policy decisions and formulation of strategies in key sectors such as a comprehensive Transport Master Plan, the semi-mechanization of agriculture, improving agricultural services in rainfed areas, the decentralization of health service delivery, and the restructuring of the Gezira Board. The recent establishment in the Ministry of Finance and National Economy (MoFNE) of a “Planning, Studies and Policy Directorate”, suggests that studies conducted under the TAF have been internalized and that the importance for of credible planning and policy functions has been recognized. Furthermore, there were several training courses, study tours, and workshops sponsored by the project. It is expected that the training received by government officials, at the federal and state level would have a lasting impact on their efficiency and productivity. The appropriate use of the studies’ recommendations should also inform policy decisions and formulation of strategies in key sectors. The sustainability of the results of the TAF is therefore likely. 49. In conclusion, of the 13 projects evaluated, the sustainability of 7 projects are rated as likely (Basic Education Project, Community Development Fund, the South Kordofan Start-Up Project, the Blue Nile Start-Up Project, the Microfinance Project, the Judiciary and the TAF). The sustainability of 5 projects is rated as uncertain at this stage (NETREP, Decentralized Health Services, Improving Livestock Marketing Project, Revitalizing Gum Arabic Production, and PSCAP). There is however a strong likelihood that these projects can become sustainable if adequate measures are taken to successfully complete implementation and provisions for O&M are made. The sustainability of one project was considered Unlikely (Abyei Start-Up), due to poor implementation performance, insecurity in the project area and political uncertainty. An Action Plan has been prepared to enhance the likelihood of sustainability of all the projects.

4 The Judiciary Project with MDTF-N assistance contributed to the training of only some 150 judges and the rehabilitation of just five court houses

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4. ASSESSMENT OF THE SUSTAINABILITY OF THE MDTF-N PORTFOLIO FROM A THEMATIC PERSPECTIVE

A. Basic Services Perspective

a. MDTF-N Education Program Sustainability

49. The MDTF-N education program targeted five of the weakest states (South Kordofan, Blue Nile, Red Sea, North Kordofan, and Kassala) in terms of their low enrollment rates, high gender gap and the willingness of the state governments to support education activities. MDTF-N education spending as a share of Northern states development expenditure accounted for an average of 10 percent each for Blue Nile and South Kordofan states; 5 percent for North Kordofan state and about 3 percent each for Kassala and Red Sea states during 2005-2009 (Table 4.1). Education activities have been supported mainly through the Basic Education Project and the CDF. They have been designed to boost girls’ education by using criteria that favored areas where interventions would enhance girls’ access. To attract teachers to remote areas, MDTF-N supported building teacher dormitories as incentives for teachers. By replacing schools that are built of tree branches and hay with schools built with permanent building materials, MDTF-N has increased the number of functioning days in those schools. 50. By providing resources amounting to a fifth of total expenditures by Northern states, the MDTF-N education program has significantly contributed to improving access to and quality of basic education. Nearly half a million pupils in targeted communities (of which 49 percent are female) benefited from MDTF-N support, representing 9 percent of the total number of basic education students and about 11,000 teachers (or 7 percent of the total number of basic education teachers) were trained following the construction or rehabilitation of 458 schools, with about 2,400 classrooms and 217 teacher dormitories, as well as the provision of a significant number of desks, chairs, textbooks, and school kits (Annex 2 provides more details). Despite progress, Sudan’s education outcome indicators lag behind comparable countries and MDG targets (Education Status Report, 2011). This underlines the importance of sustaining MDTF-N education results and the need to further increase access to education. 51. The sustainability costs of maintaining MDTF-N education results, estimated at SDG 32.1 million per annum, are negligible relative to states’ budgets. It amounts on average, to some 1.2 percent of aggregate expenditure of targeted Northern states and 2.5 percent of their development expenditure (Table 4.1). These estimates take into account the evaluation of aggregate needs for O&M for all different types of education infrastructure and activities completed as well as planned, including those infrastructure built from scratch, those that were simply rehabilitated, and those for which the project provided supplies and equipment only. 52. Thus, the sustainability costs of the MDTF-N education portfolio do not pose significant pressure on the sector budget. Nevertheless, preparation for the take-over of the education projects by the line ministries’ and state governments would require the states and localities to provide allocate adequate resources in their budgets to cover operations and maintenance including staff, supplies and other resources to ensure proper functioning of schools and their full utilization.

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Table 4.1: States’ Expenditures - 2009 (SDG million) compared to Sustainability Costs of MDTF-N Basic Services Portfolio

Total Annual Expenditure

o/w Develop. Expenditure

Education Expenditure

Health Expenditure

Education Sustain-ability Costs

Health Sustainability Costs

Water Sustain-ability costs

Electricity Sustain-ability costs

Aggregate 2,656 1,265 127 99 32.1 12.5 12.2 10.1

Red Sea 248 119 6 12 0.8 0.8 - -

Kassala 314 47 12 9 7.3 3.9 1.6 1.0

Blue Nile 462 315 40 31 7.2 3.8 3.9 1.0

White Nile 262 39 - - - - 0.1 -

Sinar Nile 205 46 0 0 0 0 0.1

North Kordofan

602 363 20 9 7.2 0.8 1.4 2.7

South Kordofan

563 336 49 38 9.6 3.2 4.9 5.4

Source: World Bank staff estimate

b. Health: MDTF-N Program and Sustainability 53. MDTF-N investments in the health sector have supplemented development spending at the state level with the view to address inequality in the system. MDTF-N health support targeted five states with some of the lowest health indicators amongst Northern states (Blue Nile, South Kordofan, Red Sea, North Kordofan, and Kassala). The targeted states were chosen because of their high infant and under 5-mortality rates as well as high maternal mortality rate. MDTF-N support includes rehabilitation or construction of health facilities, provision of medical equipment, and training of health professionals. MDTF-N health support as a share of Northern states development spending accounts for an average of 8 percent for each of South Kordofan and Blue Nile states; 4 percent for Red Sea state; and about 2 percent for each of Kassala and North Kordofan states during 2005-2009 (Table 4.1). Health activities have been supported through the Health project (DHSDP), the CDF, and the Blue Nile Emergency project. 54. Overall, the MDTF-N health portfolio amounts to 14 percent of total expenditures by Northern states and has significantly contributed to improved access to quality health services. In targeted communities, access to, and use of health services have improved noticeably and births attended by skilled heath staff have reached 37 percent of total births, thanks to the construction/rehabilitation of 104 health facilities and the training of 1,450 health professionals such as midwifes, nurses, and lab technician (Annex 2 provides more details). Nevertheless, access to health services remains low at about 40-50 percent of the population and Sudan’s health indicators lag behind other comparable African countries. This underscores the importance of sustaining MDTF-N health program results and the need for further improvements to expand health service coverage. 55. Estimated sustainability costs for MDTF-N health program are also negligible compared to states’ expenditures. The sustainability costs account, on average, for 0.5 percent of targeted Northern states aggregate expenditure and 0.9 of targeted development expenditures (Table 4.1).

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The sustainability costs of MDTF-N supported heath program takes into account the costs for all interventions that benefited from MDTF-N program completed as well as planned.

c. Water and Electricity: MDTF-N Program and Sustainability

56. Increasing access to safe water and electricity in war affected Northern states features in many components of the MDTF-N portfolio of projects. Many Sudanese rely on rivers, lakes, ponds, and wells in the absence of piped drinking water. A common component of many MDTF-N projects is reducing that number, and, with more than US$8 million dedicated to the sector from the MDTF-N along with GoNU contribution of US$5 million, good progress is being made. Similarly, electricity coverage rate does not exceed 22 percent of the population and is heavily concentrated in major cities and urban areas (World Bank CEM 2009). 5 For this reason, MDTF-N supported interventions focused on providing rural areas with solar energy. Total MDTF-N and GoNU resources allocated to water and electricity amount to US$23 million, or 8 percent of the portfolio allocated to the Northern states. 57. Over 750,000 people were provided with clean water after 395 water points were constructed/rehabilitated and hand pump and yard operators were trained. In Blue Nile for instance, five new water yards have been constructed and improved water facilities have benefitted 100,000 school-age children. In South Kordofan, more than 200 mechanics and operators have been trained to maintain the new water yards constructed there. In Kassala State, the construction of water stations, water tanks with taps, provision of hand pumps, have benefited a total of 126,571 people, including improving water facilities for 40,000 basic school-age children in Hamashkoreib locality. Sanitation and hygiene messages are reaching more people. As part of the ongoing effort to promote improved water, sanitation, and hygiene, nearly 250 women and youth groups in South Kordofan have been trained to promote good practices throughout their communities in an attempt to reach at least 20,000 people. 58. However, access to safe water and sanitation remains low particularly in rural areas, necessitating the scaling-up of successful water projects. Despite progress made under MDTF-N, an estimated eight million people in rural areas need access to water supply and sanitation facilities. UNICEF records indicate that of the 6,500 rural water points that have been documented on the national data base, only 35 percent may be operational. This underlines the critical importance of ensuring that constructed or rehabilitated water points are properly maintained and the need to expand water coverage by scaling/replicating successful MDTF-N supported water points. 59. Many water points constructed under the MDTF-N program are efficiently and effectively being utilized by the community and some even use them as a revenue generating activity to cover the costs of their sustainability and also to support other community development projects. Box 4.1 summarizes the successful example of Alsahba water point in Sinnar state supported by the Improving Livestock Production and Marketing Project (ILPMP). 60. Solar electrification is reaching more rural places/people and improving access to basic services. Four states—South Kordofan, North Kordofan, Blue Nile and Kassala—are benefiting 5 The new Merowe dam is expected to double Sudan’s generation capacity once it is fully functional.

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from the CDF’s Solar Electrification Program. Solar electrification has allowed medical staff in targeted states to offer services at night and to provide power necessary for proper refrigeration and conservation of drugs and vaccines. In communities such as Abu-Hasheem, a rural village in Blue Nile State, solar power helped promote nighttime development. Beneficiaries include students and teachers from the local primary school (Salman Alfaresy School) allowing them to study and prepare lesson plans, respectively; and entrepreneurs are resuming business activities at night. The head of the Community Development Committee of Abu Hasheem explains that the project is also strengthening social ties among villagers, who use it to hold meetings, social and cultural events, and reconciliation assemblies. He concludes with a simple phrase: “Where there is power, there is development.” (Box 4.2). The solar project in Abu Hasheem is also mobilizing the community to ensure benefits are sustained. To help make this happen, 24 members of the community have been trained on maintenance of the solar energy system. In addition, each family pays one Sudanese Pound every month to meet maintenance costs. Given that the existing national grids cover only six states, with high concentration in Khartoum, replicating solar electrification may help improve access to electricity especially in remote rural areas with small population size. 61.

62. 63.

60. The estimated sustainability costs for the water and electricity sectors represent a fraction of Northern states annual budget. Estimates for costs of maintenance of water infrastructure represent on average 0.5 percent of targeted Northern states expenditure. Similar results pertain to the electricity sector. However, given that communities have shown strong initiative in operating and maintaining solar electrification and water projects, they perhaps provide useful models of interventions that can be managed and sustained by the communities themselves with just organizational and mobilization support from the States, and may even require less operating

Box 4.1: Good Example of Incorporating Sustainability Measures in Alsahba Village Water Project One of the pressing needs of Alsahba community was to rehabilitate its existing water yard to supply water to humans (4,000 people) and animals (30,000 livestock). The MDTF-N-supported Improving Livestock Production and Marketing Project (ILPMP) has rehabilitated the water yard that has improved water accessibility to people and livestock, and enhanced the livelihood of pastoralists’ livelihoods by generating additional income. A project rapid survey conducted in 2010 revealed that distance and average time for fetching water has decreased, water consumption level almost doubled, livestock production and marketing improved, and water borne diseases were reduced. Stakeholder participation and sustainability. Alsahba water project was identified and selected by local communities through intensive consultation and collaboration. The project is managed by the communities, based on a Memorandum of Understanding signed by the Rural Water Corporation (RWC) and the Community Based Organization. The RWC and contractors has trained the Water Committee on rehabilitation process, operation and maintenance, procurement of fuel, lubricants and spare parts. The project staff has trained the Water Committee on different financial aspects relating to fees collection and bookkeeping. The Water Committee has raised sufficient revenue that exceeded the annual rehabilitation cost of SDG117, 000. Environmental concerns. The project addressed the community’s environmental and social concerns by incorporating mitigation measures to reduce water-borne diseases and water contamination. These measures include separation via fencing of sources of water supply for humans and animals, respectively, a dedicated access for trucks, and backfilling and leveling any depressions that could hold water. Trees were planted inside the water yard and on the premises which use the drain from the water points for irrigation.

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resources from the States’ budgets. These also represent good models to replicate through either donor funding or state budgets.

Box 4.2: Where there is power, there is development—A successful Story of Solar Electrification in Abu Hashheem Village, Blue Nile State Before being covered by the CDF Project in 2007, this village of 5,500 people was living in virtual darkness, with no source of electricity apart from a few small generators. As a result, the population relied on wood as a source of energy. During a recent three-day field visit in 2011 headed by World Bank Acting Country Director for Sudan, along with World Bank Country Manager, the Bank mission visited Abu Hasheem to observe firsthand the impact that solar energy is having on education, health and broader development. Energy and education. The introduction of solar energy has had a profound effect on the quality of education and learning for the children of Abu Hasheem. “Night classes were introduced for the first time in the village; students are now able to do their homework and move easily to and from school [at night],” said Abdulhameed M. Saeid, principal of the Salman Alfaresy School for Boys. “Teachers have also benefited, as they have a better residential environment and can better prepare for the next day’s lessons.” He playfully added, “We boast of our academic achievements in front of our colleagues of various schools during our meetings at the state level.” There has been a substantial increase in pass rates and grade percentage averages at Salman Alfaresy School for Boys since the start of the Solar Lighting project in the village. These achievements have encouraged dropouts to return to school, and parents have become more attentive to their children’s academic performance. As a result of this track record, the principal of the school was honoured at the national level. The school was also awarded the Damazin Locality Ideal School Prize, won the State Prize for First Grade Basic School, and was presented in the National Program for Distinction and Educational Creativity.“We visited the school on a weekend evening,” explained Ian Bannon. “The classroom was packed with students. They were not in class but studying and doing homework, made possible by solar lighting. The academic results speak for themselves, but equally touching were the faces of the kids and the evident pride of the principal. It was a good reminder of why we do what we do. Energy and health. In the health sector, the CDF’s solar program helped midwives like Nimat Abas who now have a safer and brighter environment to deliver babies at night. Nimat feels lucky to have had the opportunity to train at the school of midwifery administrated by the Ministry of Health in Damazin with support from CDF. She graduated as a certified midwife after a year and a half and is able to practice in a safe and professional manner. Nimat told a touching story of the recent past: “One fall night, I was called to deliver a baby. It was a dark cloudy night; you could hardly see anything except a flash of lightning from time to time. The only light was a faint one coming from a small kerosene lamp,” she recalled. “Suddenly, a very strong wind blew and put out the lamp’s light, right as the baby’s head was protruding. I was forced to continue with the delivery in darkness; it was the most critical moment in my life.” Such precarious situations are now a thing of the past; since then, CDF has provided all 10 midwives of the village with solar powered lamps. Hasan Abu Digin, a medical assistant in the village, has been working with the community health centre since it was established in 2006 by CDF. “We in the health sector are the happiest with the solar energy system. In the past, we relied on the doctor’s diagnostic skills to treat patients, but with the new system we now have a lab that enables us to give more accurate diagnoses,” Hasan said. Solar lighting has resulted in a better lit and ventilated health centre, and working hours have increased to include both day and evening shifts. Where there is power, there is development. Benefits of solar power don’t just stop at education and health; in Abu Hasheem, villagers are also using solar power to improve their incomes and lives. “I can now sit under a street lamp and finish my work at night, or even get new customers,’’ said Harun Adam, a blacksmith.

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d. Factors Affecting Sustainability Prospects for MDTF-N Basic Services Program

61. The prospects of sustaining MDTF-N basic services results would be adversely affected by the composition of public expenditures and the expected level of household contribution to running costs. Current expenditure accounts for the majority of total spending of State’s budgets, and within current expenditure, staff salaries account by far for the largest share, leaving little resources to cover other running expenses. For this reason households are obliged to contribute toward running expenses for basic services facilities such as maintenance, incentives for teachers, water, and electricity. Whereas the policy of the GoNU is free basic education, the available data suggests that households contribute to the running of schools in addition to other costs for uniforms, textbooks and meals for their children and teachers with adverse consequence on enrollment and sustainability. The field visits to a sample of MDTF-N supported schools in the Blue Nile State revealed that basic education completion rates are low and many students drop-out due to poverty. Similarly, although basic health service is free for children under five and pregnant women according to the official policy, households’ financial contribution are substantial6. The high poverty level in many Northern states necessitates national and sub-national governments to assume increasing responsibilities to cover running expenses.

Table 4.2: Composition of Public Basic Education Spending (federal and state), 2009 Salary expenditure Non-salary expenditure Total

Teacher salaries

Non-teaching staff salaries

Goods and services

Total public spending (SDG Million) 933 217 56 1206

Public spending per student (SDG) 203 47 12 262

Percent of public spending 77 18 5 100 Source: Education Stats Report (2011) 62. Inadequate staff and other resource shortages have adversely affected the proper functioning and full utilization of some MDTF-N supported basic services program. Understaffing has led some schools and health facilities to operate below capacity, due to failure of government to fulfill its commitment toward the provision of staff. Lack of trained teachers and medical and paramedical personnel, especially lab technicians, has been stressed as a major concern. 7 Some water points and solar energy interventions suffer from the lack of trained

6 The Review of Free Care in Sudan noted that the average expenditure on fees for the episode of care that their child had just received was SDG 62 per child, with the lowest average reported in Blue Nile (SDG 23) and the highest in Kassala (SDG 129). Comparing the expenditure on an episode of care for a child with the household’s average monthly non-food expenditure, the average proportion is 44.5 percent. Given the frequency of illness in a family of several members, this proportion is high. Only 28 percent of households interviewed in five states (Blue Nile, Kassala, South Kordofan, Red Sea, and Khartoum) had health insurance coverage and 53 percent could not afford to pay for their care. The most common coping strategy is sales of assets, followed by borrowing from money lenders, family and friends as well as not getting full treatment (Review of Free Care in Sudan, p. 12). For women who had delivered the mean payment was SDG 248 which is about 200 percent of the monthly household expenditure after food. A quarter has health insurance, and about two thirds reported that they could not afford to pay. Getting assistance from family and friends was the most common strategy. 7 Staffing ratios are much higher in Khartoum than elsewhere, while infrastructure (functional water and electricity) also follows a gradient of functionality, ranging from 100 percent access to water and electricity in Khartoum to only 20 percent access to both for health facilities in South Kodrofan (Review of Free Care in Sudan, 2010). The Monitoring Agent has noted that under-

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operators. As indicated earlier, the MDTF-N program appropriately contributed to training staff in all of these sectors; however the scope of the program is small compared with the huge capacity building needs. MDTF-N supported projects are working with the state authorities to address these issues, including requiring the authorities to provide sufficient staff and adequate resources before building new facilities. Lack of textbooks is another concern. On average, three students share one text book compared to the official policy of 2:1. At the extreme, some rural schools had a 9:1 student-textbook ratio, with detrimental results for learning outcomes. The provision of medicines and other medical supplies from the government has been very feeble and intermittent.

e. Other Functionality Dimensions of MDTF-N-Supported Basic Services

Facilities

63. A recent Assessment of MDTF-N Program Sustainability conducted by a local firm indicates that most of the visited facilities are technically fit for purpose, functional, durable and generally with god architectural appearance in comparison with the prevailing facilities in the area. However, it is noted that some of the facilities have wall or floor cracks, leaking ceilings and broken windows and door, and need maintenance. Other facilities lack latrines, fence and water and electric supply. 64. The Lack of water supply has adversely affected the functionality of some MDTF-N supported schools and health units with a severe impact on sustainable access to basic services. A large number of visited schools suffer from lack of water supply, despite that the internal water network and plumbing components are present. For example, in some surveyed schools (Abu Alaga School in Kassala State), the school day normally ends earlier than usual due to the lack of water supply. The lack of drinking water in some of MDTF-N built school (e.g. Marafeet and Shendodia basic schools) in the Red Sea State has forced some villages to migrate to other places with a severe impact on enrolment and sustainability. Lack of water supplies has also severely impacted the use of latrines and eventually contributes to poor sanitation conditions. In a number of water points (such as Gardoud Haffir in South Kordofan State), humans and animals use the same water basins, creating potential health hazards.

65. Lack of electricity constitutes another major problem in most facilities. Electrical fixtures are not installed in many schools and health units. Among facilities equipped with internal electrical networks, some were not connected with the main source of electricity nor were they connected to any generator or solar energy sources. Lack of electrical connectivity in many health units and schools has impact negatively the full functioning of these facilities and has ultimately minimized expected benefits as they operate only during daytime.

66. Insecurity in South Kordofan and Blue Nile states, as well as Abyei, is adversely affecting the completion of planned activities of most of the ongoing MDTF-N projects such as CDF, DHSDP, BEP, ASEP, and NETREP. For example, over 100 CDF sub-projects covering schools, health facilities, water supply, and community centers are affected by insecurity in Blue Nile and South Kordofan states. Works in three out of 12 BEP schools in Talodi Locality, South

utilized MDTF-N supported health units in Elgash locality, Kassala state, were attributed to lack of health staff and medical equipment (MA: Independent Field Monitoring Report, 2010).

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Kordofan cannot be completed due to deteriorating security situation8. The insecurity has also affected the completion of Demazin Kurmuk road, where the contractor has suspended activities with an estimated balance of US$10-12 million. Overall, the total grant amount in affected areas is estimated at US$20 million. Should insecurity remain in these states, affected MDTF-N projects need to explore alternative scenarios such as reallocating resources to secure areas and reallocating MDTF-N resources to correct deficiencies in already built infrastructure in secure areas. These alternatives measures are unlikely to be completed within the current MDTF-N timeframe. 67. To ensure sustainability of MDTF-N results and thus long-term impact of the portfolio, a through follow-up functionality assessment is needed with the view of getting all MDTDN facilities completed to appropriate technical standards by the MDTF-N’s end. The assessment is expected to: (i) cover all relevant MDTF-N projects (e.g. CDF, BNSSEP, BEP and DHSDP); (ii) assess the quality of infrastructure and identify deficiencies (e.g. lack of water supply, latrines, fence or electricity as well as cracks in the wall or roof); (iii) specify required costs; and (iv) propose arrangement to ensure proper functioning and full utilization of MDTF-N facilities. In addition, MDTF-N resources to correct deficiencies in already built infrastructure need to be allocated. (The Action Plan for an Exit Strategy provides detailed information on responsible party and target date).

f. Conclusions and Recommendations 68. Sustainability costs of maintaining MDTF-N education, health, water supply and electricity results are small relative to states’ budgets. It is important however that state and locality governments budget for resources to cover running expenses, and provide adequate staff, equipment, supplies and other resources to ensure proper functioning of MDTF-N basic services facilities. In addition, strengthening capacity at state and local levels to enhance efficient resource management, and enhancing stakeholders’ ownership and participation to provide models that can be replicable would all contribute to improving sustainability prospects. 69. States’ budgets should address staff and other resource shortages to ensure full utilization of MDTF-N basic services programs. Ongoing MDTF-N projects should continue to work with the authorities to plan for sufficient staff and adequate resources (e.g. water, electricity, medicine, and equipment) for proper functioning of basic services facilities. Providing resources by governments to cover running expenses of MDTF-N program would help lessen the high dependency on household contribution, reduce the financial barrier to basic services, and therefore, enhance prospects of sustaining results. 70. Strengthen the link between budget allocations and sector outcomes. Since responsibility for basic services has been devolved to the state and locality levels and more resources are getting to these sub-national levels, it is imperative to monitor and evaluate progress on the use of funds and related outcomes at the state/locality level. Efforts to strengthen expenditures reporting by sector (e.g., across health, education, roads), by function (e.g., wages), and by administrative levels (e.g., state, local) would also allow for a more systematic analysis of 8 When construction activities were suspended, works were at 27 percent completion in Wini School and at 45 percent in Ankarto School. Works have not yet started in Karandi School.

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the fiscal position of states/localities as well as sectors. In turn, improved data on sectoral outcomes would highlight potential disparities across states. The weak capacity at the sub-national levels has led to incomplete reporting of expenditures and inadequate monitoring and evaluation (M&E) of outcomes. Therefore, capacity building efforts need to be strengthened in those areas. 71. The MDTF-N supported Education Status Report and Public Expenditure Tracking Survey (PETS) in health are expected to help improve the relationship between budget allocations and outcomes. Both reports aim to contribute to strengthen national capacities for effective management of public resources and hence help identify the weak links between public spending and outcomes; improve transparency, creditability and execution of budget; enhance efficiency and poverty reduction impact of public expenditure; and further our understanding of service delivery performance. 72. Improving the efficiency of public expenditures, especially at sub-national levels, through analytical work and capacity building would help enhance the effectiveness and sustainability of basic services. The Northern states allocate a high share (50 percent) of their budget to social sectors, but the high level of absolute poverty and low levels of social indicators necessitate further improvements in the efficiency of social spending to make room for expanded service delivery. 73. Enhance stakeholders’ ownership and participation to provide models that can be replicated. Some solar electrification and water projects provide models that can be replicated. Solar electrification projects have empowered communities in Blue Nile and Kassala states to improve their lives, whether it is through the provision of electricity for better lit classrooms and proper refrigeration and conservation of drugs and vaccines, or by improving livelihoods and social bonds in communities. These projects are also mobilizing communities to ensure benefits are sustained. Similarly, water points constructed under the MDTF-N program have been efficiently and effectively utilized by the community, generating sufficient revenue to cover the costs of their maintenance and strengthening stakeholders’ ownership and participation to ensure benefits are sustained. One of the main strengths of these replicable models relates to placing provision of basic services within a broad framework of livelihood where income generation and employment creation are an integral part of the project.

B. Infrastructure and Rural Development Perspective

a. MDTF-N Rural Program: Achievements and Sustainability

74. The MDTF-N program supported several projects in agriculture and rural livelihoods with the view to improve production and marketing in traditional rain-fed areas of Central and Eastern Sudan. The MDTF-N program includes (i) Improving Livestock Production and Marketing Project; (ii) A Pilot project on “Revitalizing the Sudan Gum Arabic Production and Marketing” ; and (iii) specific agricultural components of the three areas projects (i.e. Abyei, Blue Nile and South Kordofan).

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75. The MDTF-N program also supported policy reforms in the sector, through a number of studies conducted as part of the projects, such as liberalizing the Gum Arabic sector. The implementation of the agreed Gum Arabic sector reform packages has led to opening up the gum market for potential market actors. The government adopted in 2009 and 2010 a number of directives to promote the liberalization of the Gum Arabic trade, including abolishing 13 out of 18 taxes and fees that relate to Gum Arabic production and marketing and removing the concession entrusted to Gum Arabic Council to have a monopoly on trading and exporting raw gum. 9 These measures have led to noticeable improvements in marketing and higher prices to Gum Arabic producers. Similarly, the livestock project supported various technical studies to guide the policy reform process in the sector. 10 76. Support pastoral livelihood. The MDTF-N program is constructing 24 water points supporting livestock-dependent pastoral communities, rehabilitating six livestock markets and supporting 48 Village Development Committees (VDCs), including training and capacity building packages for pastoral communities and private veterinarians. Some 72,000 people (30 percent of them are women) are benefiting from these interventions in the six targeted localities of the following four key pastoral states: (i) North Kordofan State (Gebaish, En Nuhood, and Abu Zabad localities); (ii) Blue Nile (Damazin locality); (iii) Sinnar (Singa locality) and (iv) White Nile State (Al-Gabalain locality). The development objective of improving livestock production and marketing in those targeted localities, as a pilot, is addressing growth challenges for the livestock sector by contributing to increase livestock numbers and creating better outlets for production through improvement in the marketing infrastructure. 77. Livestock markets are providing highly needed support to the traditional animal resources sub-sector through veterinary services and marketing opportunities for pastoralists. Animals traded in the rehabilitated livestock markets are expected to annually amount to 93,225 for sheep; 3,586 for cattle; 1,958 for camel; and 1,683 for goat. The average price received by pastoralists in En Nuhood livestock market in North Kordofan has reportedly increased by some 10-20 percent compared to the price received prior to the intervention. For the livestock markets, the localities are collecting entry and service fees to support operation and maintenance. The states are providing veterinarians and paying their salaries. Vaccines against epidemic diseases are provided free while other vaccinations are paid for by the pastoralists. Federal and state governments would also need to continue to finance extension agents and research needs. It would be useful to get the states and localities to let the livestock markets to operate as autonomous units and use private veterinarians to provide services as this is being piloted in North Kordofan. This would contribute toward enhancing the sustainability prospects of the livestock markets. 78. Support for Gum Arabic producers. The MDTF-N program has mobilized 110 (out of a total of 1,650) Gum Arabic Producers’ Associations (GAPAs) in the four targeted states of Blue

9 A number of MDTF-N supported studies have informed policy reforms, including (i) Policy Note: Export Marketing of Gum Arabic from Sudan; (ii) Study for Gum Arabic Value Chain Analysis; and (iii) Study of Gum Arabic Auction Markets and Market Information; and ongoing Study on Gum Arabic World Demand Structure and Markets Opportunities. 10 These studies include: (i) Factors Contributing to Conflict among Pastoralists/Agro-pastoralists & Sedentary Farmers - Mapping Conflict; (ii) Study on Management of Pastoral Community Investment Matching Grants; (iii) Study on Livestock Market Rehabilitation and Development; (vi) Design of Livestock Marketing Database; (v) Privatization of Veterinary Services in North Kordofan State; and (vi) National Strategy for Livestock Marketing in Sudan.

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Nile, South Kordofan, Sinnar, and North Kordofan—and has provided seed fund for a microfinance program in support of production and marketing. While the microfinance component is working well for now, it is uncertain how it will survive the project. It would therefore be useful to quickly link the component to the efforts to introduce and manage microfinance nationwide under the Microfinance project. The project has also rehabilitated 8 nurseries to support Gum Arabic producers to replace old trees and sustain their production capacities. The policy reform measures advocated by the MDTF-N program has supported the removal of market barriers in the Gum Arabic sector and invited more market participants. This in turn has boosted competition among market actors, leading to higher prices to Gum Arabic producers. 79. The Blue Nile and South Kordofan states’ livelihoods components have supported Village Development Committees (VDCs). Each VDC has set up a revolving fund and each household who received tools plus animal traction set would pay a fee towards the purchase of new hand tools and animal traction set to go to others who have not yet received a set. It appears all the VDCs are operational but it is not clear how fast the scheme is expanding.

Table 4.3: Sustainability Cost estimates of the MDRF-N Rural Program (SDG thousands)

Abyie South Kordofan

North Kordofan

Blue Nile

Sinnar White Nile

Khartoum Total

Livestock - 187 62 62 62 - 374

Livestock markets - - - - - - - -

Office equipment, vehicles for PIU - - 168 168 168 168 168 839

Agriculture components of the three areas - - - - - - - -

Agriculture equipment and supplies 282 186 - 119 - - - 586

Fisheries under Blue Nile Project (Supplement) - - - - - - - -

Fisheries equipment and supplies - - - 936 - - - 936

Gum Arabic - - - - - - - -

Office equipment, vehicle for PIU - 224 347 167 - - 611 1,360

Training centers rehabilitation - 18 19 - 19 - - 56

Nurseries - 8 7 7 19 - - 41

Total 282 436 729 1458 268 230 778 4,192

Source: World Bank staff estimates 80. Support and sustain in land fisheries development. Additional financing under the Blue Nile project has been approved to support a new livelihoods component for the Blue Fisheries Union. A Fisheries Service Center will be constructed for the Union; members will be provided with nets, boats, and fishing gear, and training. There is the need to clarify the ownership of the Fisheries Service Center. Currently it is supposed to be run by the Fisheries Union but supervised by the state Ministry of Agriculture. Similar clarification is needed on equipment and fishing gear. The expectation is that these will be given as a grant to the Union who will have to operate, maintain, and sustain them. These issues that may affect sustainability will need to be addressed before the end of the project. Fortunately, the sustainability costs of maintaining the MDTF-N rural program are small due to the limited scope of the program (Table 4.3).

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b. MDTF-N Infrastructure Program: Achievements and Sustainability

81. The transport sector is a major MDTF-N focus, amounting to nearly half of the total MDTF-N and GoNU resources devoted to Northern states (US$155). The MDTF-N support is highly relevant as Sudan’s transport network is sparse leaving many states disconnected. The existing infrastructure is poor and damaged, particularly in war-affected areas. The country’s total road network is estimated to be 32,425 km, of which the length of paved roads in Northern states is 7,200 km, including urban roads and a highway of 1,200 km from Khartoum to the main sea port of Port Sudan. Some of the roads rehabilitated under NETREP are to facilitate state linkages such as Gadamai - Hamshkoraib Road linking Kassala and Red Sea State (Table 4.4). There are however delays and problems of design in the construction of the Demazein-Kurmuk road where part of the roads have no funding. More importantly, the construction works in section 1 and 2 of Demazein-Kurmuk road have stopped since September 1st, 2011 due to prevailing conflict situation in Blue Nile State. This has led to construction delays and uncertainties as whether the insecurity situation will improve to allow the contractor to complete the outstanding works. Currently, the works are about 68 percent complete and were expected to be completed by end of December 2011, if the insecurity situation improves. 82. Although the railway network is one of the largest in Africa, with some 5,000 km main line, it deteriorated due to poor maintenance and inadequate rehabilitation and it is estimated that 25 percent of the network is out of service. The rehabilitation of 446 km of rail line under NETREP provided a vital link between the North and the South after two decades of interruption due to civil conflict (Table 4.4).

Table 4.4: Cost Estimates for sustaining Roads and Rail Projects (SDG thousands)

Total Length (km)

Estimated value (in '000 SDG)

Estimated annual maintenance cost

Est. amount (in '000 SDG)

SDG/km Rate Rehabilitation of Rail Infrastructure 1

Rehabilitation of Babanousa - Wau Rail line (civil works) 446 81,300 15,600 25% 1,739

2 Purchase of construction equipment 5,133

10% 513

3 Purchase of Track Maintenance Equipment 17,620

8% 1,322

4 Purchase of Trucks 3,431

10% 343

Sub-total

3,917

Road Improvements in the Three Areas: 1 Gadamai - Hamshkoraib Road 82 70,200 125,000

10,250

2

Spot Improvement of Kadugli - Kaouda Road 30 13,085 32,000

960

3 Damazin - Kurmuk Road, Section 1 57 62,870 125,000

7,125

4 Damazin - Kurmuk Road, Section 2 38 50,335 125,000

4,750

Sub-total

23,085

TOTAL 27,002 Source: World Bank staff estimates

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83. The sustainability costs of the rail and road networks are provided in Table 4.4. The annual sustainability cost of the Babanousa-Wau rail line rehabilitated under the MDTF-N program is estimated at nearly SDG4 million and the Sudan Railway Corporation is committed to cover the cost of maintaining the rail line. The cost of maintaining the road network is estimated at SDG 23 million annually. The National Highway Authority is responsible for maintaining the road network and the Authority collects annually road tolls amounting to US$50 million for maintenance. However, there exists much room to improve the current system. Establishment of an independent Road Fund has been recommended which would provide a framework for an effective utilization of the current road toll collection and allow participation of road users in the administration of the Fund. The Ministry of Transport has established a Task Force to follow up on the implementation of these recommendations. In the meantime, a recent government decree has been passed to waive exemptions for all vehicles. It has been estimated that currently about 50% of the vehicles in the country are exempted from paying tolls. The preceding bode well for the sustainability of the MDTF-N road program. 84. An important objective of the NETREP project is to help identify priority networks of feeder and rural community access roads in three States of Blue Nile, South Kordofan and Kassala. This involves the implementation of feasibility studies covering about 1,925 km of roads (782 km in Blue Nile, 652 km in South Kordofan and 491 km in Kassala) and preparation of an investment program subject economic, social, environmental, and other social objectives. Funding for these projects would be sought from other financiers.

C. Environmental and Social Sustainability Issues

85. With the exception of the road and other infrastructure operations, most of the MDTF-N supported interventions are small scale and their predicted negative social and environmental impacts are unlikely to be significant, irreversible or large in scale. However, the analysis suggested measures to enhance project compliance with environmental and social safeguard policies, including fully implementing safeguard measures, providing regular reporting/monitoring on safeguards, and strengthening the capacity of implementing agencies, line ministries, states, localities and communities. Such measures are expected to help ensure that MDTF-N projects are environmentally and socially sound. From the review done in this study, it is especially important that school latrines and health facilities be provided with water to improve sanitation and that at water points and Haffirs, the shared use by humans and animals of the same water basins be stopped to avoid contamination. A gender review noted that though gender is not mainstreamed in almost all MDTF-N project design, most projects have tried to capture gender concerns as part of implementation. The review suggested measures to address gender issues, including strengthening institutional capacity for mainstreaming gender. Sustained implementation of these recommendations is expected to help fill these gaps and enhance the prospects for environmental and social sustainability.

D. Technical Assistance, Capacity Building and Institutional

Development

86. Institutional development and capacity building is being enhanced. Domestic training of 862 staff at federal and state level on a range of topics that included project design, formulation of feasibility studies, procurement and financial management, and monitoring and evaluation

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was supported by TAF. International training was provided to 21 federal and state government officials. In addition, other MDTF-N projects such as BEP, DHSDP and CDF supported the training of thousands of teachers and health professionals, and state government officials within Sudan. Under the Judiciary project, about 145 judges nationwide were trained and four courthouses were constructed in South Kordofan, Blue Nile, Kassala and River Nile states, contributing to increased access to judiciary services. 87. The government has established Project Implementation Units (PIUs) staffed in some cases by government staff but in others by contractual funded by the MDTF-N. The MDTF-N Unit has strengthened the capacity of PIUs, including training of project implementation staff on Bank fiduciary procedures. Some of the PIU appear to have become a framework for implementation of other donors’ supported projects e.g. an ongoing health project funded by JICA and the Global Alliance for Vaccines and Immunization (GAVI) are using the institutional set-up of the DHSDP PIU for implementation. 88. Community development is on the rise. A strong social capital within communities and states and localities is critical to project sustainability. MDTF-N supported projects such as the CDF have empowered local communities to develop and consolidate their capacities to address delivery of basic services. In Blue Nile State, for example, several locality development conferences (LDC) have been organized, and many community development committees have been formed, and selected members trained on issues ranging from fund management to project planning and bookkeeping. With these communities gaining knowledge of, and becoming empowered actors in development, there is greater scope to strengthen bottom-up accountability systems and ensure project sustainability. This lays out strong bases for successful implementation of promising sub-projects such as in the water sector.

E. Conclusions and Recommendations

89. Considerable progress in the rural and transport sectors have been achieved but there is a need to scale-up and achieve a nation-wide impact. However, the support has been modest given the size of the country and its dependence on agriculture which provides livelihood opportunities to the majority of the population. Scaling-up and replicating successful projects need to be emphasized in light of the significance of agriculture in generating and diversifying growth, creating employment and alleviating poverty. The MDTF-N experience in linking social services to livelihood activities such as constructing water points where income generation and employment creation are part of the process offer successful examples that can be replicated. New investments in rural and feeder roads would complement current achievements, enabling farmers and small producers to reach markets. 90. To deepen the impact of agricultural, road and rail projects and ensure their sustainability, institutional arrangements need to be strengthened. Sustainability of MDTF-N supported projects depends on enhancing participation of farmers/pastoralists and their empowerment. In this regard, capacity building is needed in areas of enhancing farming skills, sustaining farmers input supply and their agricultural equipment, maintaining the water sites and pumps, dealing with the marketing aspects of their produce/livestock, and training on financial aspects such as fees collection and bookkeeping. In addition, there is a need to enhance the roles

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performed by federal and line ministries of agriculture and or animal resources, in supporting research, extension and training in coordination with states and local levels within the federal structure of Sudan. Continued support by Water authorities at the federal/state level in setting appropriate water tariffs to cover O&M and strengthening supervision would also enhance sustainability prospects. Finally, institutional capacity and human resources need to be further strengthened at the National Highway Authority and Sudan Railway Corporation to improve transport service delivery.

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5. ASSESSMENT OF CAPACITIES OF FEDERAL AND NORTHERN STATES GOVERNMENTS TO SHOULDER

MDTF-N SUSTAINABILITY COSTS

91. In addition to theme/sector variations, the MDRTF-N projects also vary by area of focus and implementation arrangements (national, state). The eventual allocation of costs and responsibilities for the operation and maintenance of the different activities would, therefore, depend on where the infrastructure is located, the scope and focus of the activity, and the ability of the different stakeholders to afford the costs involved. The sustainability cost estimates of MDTF-N were aggregated at the national and state level with the view to examine whether these costs pose any significant pressure on federal and state budgets, especially with the secession of the South; fiscal adjustment is now one of the key policy agenda in Sudan.

A. MDTF-N Resource Allocation at National and State Level

92. Nearly half of MDTF-N and GoNU committed resources were allocated to national projects (Census, New Currency, TAF, Microfinance, and PSCAP) (Table 5.1). The remaining resources were allocated to projects in the Northern states. MDTF-N resource allocation to the Northern states totaled SDG 718 million or US$287 million (i.e., US$161million for MDTF-N and US$126 million for GoNU). South Kordofan State (SK) had the largest allocation (16 percent of the MDTF-N and GoNU committed resources) followed by Blue Nile (BN). Resources allocated to Eastern Sudan states of Kassala and Red sea totaled US$57, representing 9 percent of the portfolio commitment, with nearly equal contribution of MDTF-N grants and GoNU. Finally, NETREP-rehabilitated rail line that reaches Wau, South Sudan, involved some US$22 million (US$6 million from MDTF and US$16 million from GoNU). 93. Mobilization of high government counterpart funding ratio. The MDTF-N mobilized a high government counterpart funding ratio for its support. The MDTF-N attracted US$352 million in government counterpart funds against US$252 million in grant commitments, leveraging US$1.40 on every MDTF-N dollar, one of the highest co-financing ratios. In terms of disbursements, MDTF-N leveraged US$1.6 on every grant dollar disbursed as of end September 2011. MDTF-N co-financing ratios are high compared to other trust funds.

B. Sustainability Implications at National and State Level 94. National level. For the five MDTF-N projects implemented at the national level (Census, New Currency, TAF, Microfinance, and PSCAP), most of which have already been completed, sustainability would depend more on government policies and integration of the programs started under the MDTF-N in the general development process and any follow-up activities under these projects would, therefore, involve national government institutions. The Census project has already established a population base that can be updated every decade as part of the normal development planning process. While one would expect sustainability of the results of the TAF- supported training of government officials at the federal and state level and the appropriate use of the studies to inform policy decisions and formulation of strategies in key sectors, it is not expected that the technical assistance itself would continue in the same form as supported by the MDTF-N. Future technical assistance would depend on the specific needs at

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the time. The Capacity Building for Public Sector Reform & Decentralization (PSCAP) is a pilot intervention program aimed at building capacity at all levels of government. Though implementation progress is very low, given the limited ability of national and state authorities to implement project activities, it would be important that activities under this project continue with strong support from the national government. The sustainability of the currency project would be assured by a sustainable macro-economic environment and policies conducive to growth. Finally, the sustainability of the Microfinance project would depend on the continued financial and policy support from the Central Bank of Sudan. 95. The NETREP project would require significant national Government and Agency involvement in its operation and maintenance even though the bulk of road and rail financing were in the states. The 446 kms of rail line de-mined and rehabilitated under the NETREP, re-linking the North and the South, though falling essentially in South Kordofan and states in South Sudan form part of the national rail network and hence would be part of the network to be maintained by the Sudan Railway Authority. Similarly, the 207 km of roads being rehabilitated, fall within the national road network, and their construction should be supervised and the completed roads maintained by the National Highway Authority. 96. State level. Ten of the 15 MDTF-N projects focused on war-affected and least developed Northern states. These include the CDF, the Judiciary, the DHSDP, the NETREP, Livestock, Basic Education, and Gum Arabic Projects as well as the three protocol areas (South Kordofan, Blue Nile, and Abyie) emergency projects. A number of policy issues in some of these projects have to be sustained at the national level while sustaining the outcomes of the state level components would depend to a large degree on the state institutions and communities. Several of the projects with state intervention, starting with the CDF and including the Basic Education and the Decentralized Health (DHSDP) have made investments at the community level (e.g., water points, school buildings, health centers, and solar electrification) that the states, localities, and communities would have to help operate and maintain. For the agriculture and rural development projects, especially the Livestock and Gum Arabic as well as the rural development components of the state projects, the beneficiaries would have to sustain their input supply, maintain the water sites and pumps, their agricultural equipment, and deal with the marketing aspects of their produce/livestock. National/state governments will need to continue to finance extension agents and research needs and help maintain the livestock markets. Finally, the three protocol areas emergency projects—South Kordofan, Blue Nile, and Abyei start-up projects— have elements of community development as well as rural development projects. Thus the localities and communities would have to maintain facilities such as classrooms, water pumps, school buildings, health centers, community centers, and their agricultural inputs. 97. Despite the importance of community contribution to operation and maintenance as advocated for above, given the poverty levels in the northern states, community contribution may not be financial but in kind. In areas where communities have a source of income such as water points, they may be able to make some financial contribution. It would however, be necessary for the states and localities to help pay not only for maintenance of infrastructure and operating costs of equipment but also for supplies and consumables for the schools and health centers. The ability of states to assume increasing responsibilities in operation and maintenance would depend on their budget situation. The next sections, therefore, estimate MDTF-N sustainability costs at

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the national and state level and look at the current revenue and expenditure responsibilities of the federal and Northern states governments.

C. Sustainability Costs of MDTF-N Program at National and State Level 98. National level. The MDTF-N resources allocated at the national level are very small relative to the federal budget. Consequently, the sustainability costs for the MDTF-N projects implemented at the national level -Microfinance and NETREP- estimated at SDG30 million per annum are just a fraction of the total annual expenditures at the federal level (Table 5.1 provides a summary of the sustainability costs and the previous chapter offers detailed analyses of the costs involved disaggregated by theme/sector). Nevertheless, the sustainability of the national projects depends on integrating these projects in the national development process and including their running expenses in the federal government/agencies’ budgets. 99. State level. The MDTF-portfolio allocated to Northern states remains relatively small compared to their revenues, and their expenditure responsibilities. During 2005-2009, MDTF-N portfolio in Northern states amounted to SDG 718 million, while revenues of Northern states totaled SDG 22 billion with an annual average of about SDG 5.1 billion (Annex 4 Table 4.9). The study estimated the MDTF-N program maintenance and operation costs and aggregated the results at the state level with the view to properly prepare for a more decentralized management of costs and to examine whether these costs pose significant budgetary pressures at the state level. The Study’s findings indicate that sustainability costs of MDTF-N operations in Northern states amount to about SDG 110 million per year and represent a small fraction of Northern states annual expenditure (Table 5.1). Nevertheless, with the closing of the MDTF-N, a deliberate effort needs to be made to clearly earmark adequate resources for proper operation and maintenance which should be included in state budgets.

D. Resource Availability in relation to Sustaining MDTF-N Program

100. Federal transfers form the backbone of resources available for Northern states to finance their different expenditure obligations following the decentralized delivery of basic services at the state level. Driven by the implementation of the CPA, federal transfers to Northern states accelerated after 2005, reaching SDG 3.3 billion (or US$1.3 billion) in 2009 and representing, on average, about 62 percent of the annual revenues of Northern states (Annex 4 provides annual data on federal transfers, own revenue, and expenditure by state). States’ own revenues and federal transfers have been significant and should enable states to cover most of the recurrent cost needs of the MDTF-N program. Table 5.1: MDTF-N Program and Sustainability Cost Estimates at National and State Levels (SDG million) NT AB SK NK BN KS RS SN WN GoSS Total

MDTF-N program 750 23 238 60 213 63 80 8 5 55 1523

Annual sustainability cost 30.0 0.5 29.2 15.1 18.3 15.1 1.6 0.2 0.1 110.1

Total Annual expenditure 67028 - 1316 1499 995 1168 808 900 1240 -

Source: World Bank staff estimate and Annex 4. Note: NT=National; AB=Abyei; SK=South Kordofan; NK=North Kordofan; SD=South Darfur; BN=Blue Nile; KS=Kassala; GZ=Gezira; RS=Red Sea; SN=Sinnar; WN=White Nile; GoSS=States in GoSS covered by MDTF-N projects.

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101. However, predictability of federal transfers and the growing dependency of Northern states on these resources remain a concern. Federal transfers continue to suffer from low execution rate, making it difficult for Northern states to consistently predict their receipts and plan their development programs, including current cost needs for relevant MDTF-N projects.

102. More importantly, sustained increases in federal transfers to Northern states may not be realized due to adverse developments in the oil sector, in particular following the secession of South Sudan. This is expected to lead to lower government revenues which would adversely affect federal transfers to Northern states, thus the sustainability prospects for the MDTF-N projects (Box 5.1). While post-CPA oil revenue sharing arrangements have not yet been reached, likely substantial losses of oil revenues from the South call for fiscal adjustments in the North. The 2011 amended budget approved by the National Assembly on July 21, anticipates revenue losses by 12 percent in 2011, and plans to commensurately cut total expenditure. Further expenditure cuts are inevitable in 2012 and onwards as the full extent of fiscal shock will be felt throughout the whole year (Box 5.1).

103. Past patterns of fiscal adjustment indicate the vulnerability of federal transfers to northern states and public investment portfolio to fiscal shocks. For example, in the wake of the 2009 financial crisis, cuts were made in the public investment portfolio and in federal transfers to Northern states, which are the main financing source for states’ basic budget operations under the decentralized fiscal system. In 2009, those transfers declined for the first time in the CPA period. Sudan’s decentralization policy means that states are responsible for local basic services, including operating and maintaining relevant MDTF-N projects, but most resources for state spending come from the national level. To the extent that future fiscal adjustment is inevitable, concern is being raised on public investment expenditures and the state-level transfers, as they are susceptible to fiscal tightening.

E. Conclusions and Recommendations

104. MDTF-N resources allocated at the national and state level are very small relative to federal and state budgets. Given the relatively small size of maintenance costs for MDTF-N financed projects compared to state budgets (on average one or two percent), it is highly advisable for states to begin making provisions now for the continued operation of these projects. However, the fiscal adjustment following the secession of the South is making it increasingly difficult to sustain MDTF-N results after closure. In recognition of this reality, the sustainability study has devised an exit strategy to begin preparing the handover of MDTF-N projects to federal and state level governments and communities once the trust fund period ends. The last OC meeting dated August 1, 2011 called for Government and donors to agreed-on an implementation plan for the exit strategy by December 2011. 105. Capacity to shoulder sustainability costs. The capacities of federal and state governments to shoulder MDTF-N sustainability costs have been adversely affected by the recent fiscal adjustments, following the secession of the South. Public expenditures were reduced in 2011 and further cuts are anticipated in 2012 and onwards.

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106. Balancing Government’s need for fiscal consolidation with the continued demands of the country’s development agenda including sustaining MDTF-N results. Sudan’s decentralization policy means that states are responsible for local basic services, including operating and maintaining relevant MDTF-N projects, but most resources for state spending come from the national level. To the extent that future fiscal adjustment is inevitable, concern is being raised on public investment expenditures and the state-level transfers, as they are susceptible to fiscal tightening. This will require not only the focused effort of the government, but also the ongoing support and dedication of donor partners in order to continue the gains made under efforts like the MDTF-N. 107. The growing dependency by Northern states on federal government as a major source for financing large part of basic budget operations underscores the need for more predictability /creditability of federal transfers in order for the Northern states to consistently predict their receipts and plan their development programs, including current cost needs for relevant MDTF-N projects. Concerns are being raised on federal transfers to Northern states and public investment expenditures, as they were highly vulnerable to fiscal adjustment pressure despite their importance in serving national development agenda. Shortfall in transfers has serious repercussions for the state’s entire budget process as well as for effective implementation of state’s program, including sustainability costs of relevant MDTF-N program.

Box 5.1: Potential Impact of the Impending Fiscal Adjustment on Sustainability

Impending secession of Southern Sudan will most likely put immense and complex strain on GoNU’s fiscal sustainability. The economic effects of secession would be transmitted largely through the fiscal and external accounts. While post-CPA oil revenue sharing arrangements are yet to be reached, it is highly likely that the GoNU oil revenue share will be significantly reduced from the current level. As southern oil revenue has accounted for more than a quarter of GoNU’s total revenue base, an extensive fiscal adjustment emerges as a daunting challenge, of which large burden will inevitably fall on the expenditure side. The first wave of the fiscal adjustment was already felt by the 2011 amended budget approved by the national Assembly on July 21. Anticipating revenue losses by 12 percent in 2011, the amended budget plans to cut total expenditure by seven percent To the extent that further spending cuts are inevitable, serious concern is being raised on public investment expenditures and the state-level transfer, as they were highly vulnerable to fiscal adjustment pressure despite their importance in serving national development agenda. State-level transfer has been a critical element of poverty reducing spending as it functions as the main financing channel for basic delivery service to the poor and vulnerable at a state and local level. Given the high national poverty incidence (46.5% of the Northern population in 2009) with tremendous regional disparities, substantial reduction in the state-level transfer is likely to have serious impact on the poor and vulnerable, especially in the marginalized areas. The high national poverty profile and its regional disparities strongly indicate that even a uniform reduction in state-level transfer could actually result in different magnitudes of adverse impacts across states. Another important challenge to the sub-national government in the face of fiscal adjustment pressure is to widen state’s own fiscal space through effectively mobilizing their own revenue sources. While fiscal decentralization has generally led to a much higher share of resources to the sub-national governments, many States are still facing structural deficiencies, with a heavy dependence on federal transfers and a relatively weak level of own revenue collection. Given the critical responsibility of sub-national governments for delivering basic services, there is a strong needs for the states to ensure adequate own resources as the federal budget is expected to be increasingly tightened due to the fiscal adjustment efforts going forward. Source. World Bank Poverty Reduction and Economic management Unit, Africa Region, “Sudan: Rapid Assessment on Public Investment Portfolio in the Fiscal Adjustment Context.” Sep. 2011

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6. ELEMENTS OF AN EXIT STRATEGY AND REPLICATION OF

SUCCESSFUL MDTF-N ACTIVITIES 108. The Exit Strategy, in the form of an Action Plan (see table below), calls for: (i) the completion, by December 2012, of the rehabilitation/construction of all facilities funded under the MDTF-N to appropriate technical standards; (ii) the preparation by each project of annual budgets in consultations with the state authorities in order to ensure that sufficient resources are secured for operational and maintenance costs. The budgets would cover adequate staffing, equipment, supplies and other relevant expenditures; and (iii) the technical and managerial strengthening of capacities at national and state levels to enhance efficient resource management, consolidate stakeholders’ ownership and participation to sustain benefits. A summary of main elements of the proposed exit strategy at the national, state and local levels is given below. Furthermore, the MDTF-N implementation experience has generated important lessons learned on activities with promising potential for scaling up or replication, as well as effective approaches for project design and implementation mechanisms. A possible road map for replication of successful MDTF-N activities is outlined in the last section. A. National level

Adequate resources clearly earmarked or planned to be earmarked for proper operation and

maintenance of national projects should be included in federal budgets, following the closure of MDTF-N.

Enhance the role played by federal ministries and agencies: in ensuring that sector agencies in the States budget enough resources for operation and maintenance; to strengthen supervision and provide stewardship; and to offer research, extension and training in coordination with states and local levels within the federal structure of Sudan; all of which are conducive to sustainability.

Institutional capacity and human resources need to be further strengthened at the federal level (e.g. National Highway Authority and Sudan Railway Cooperation) to improve service delivery.

Improve predictability and execution rates of federal transfers to Northern states. Federal transfers finance about two thirds of Northern states’ expenditure but they continue to suffer from low execution rates, underscoring the need for more predictability in allocated amounts to help Northern states consistently predict their receipts and plan their socioeconomic programs, including recurrent costs needs for relevant MDTF-N projects.

B. Sate level

States’ budgets should allocate sufficient resources to cover the sustainability costs of

MDTF-N programs with state interventions. Notwithstanding the importance of community contribution to running expenses, states and local governments should assume increasing responsibilities in meeting current cost needs and lessen the high dependency on community contributions, especially in states with high levels of poverty and inability of beneficiaries to afford the costs. Availing state resources to cover running expenses of MDTF-N programs

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would help lessen the high dependency on household contributions, reduce the financial barrier to basic services, and therefore, enhance prospects of sustaining results.

Arrangements to address staff and other resource shortages must feature prominently in states’ budgets/plans to ensure full utilization of MDTF-N programs. The MDTF-N projects should work with the authorities to provide sufficient staff and adequate resources (e.g. water, electricity and other supplies) for proper functioning of basic services facilities.

Strengthen the link between budget allocations and outcomes. Since responsibility for basic services has been devolved to the state and locality levels and more resources are getting to these sub-national levels, it is imperative to monitor and evaluate progress on the use of funds and related outcomes at the state/locality level. Ongoing MDTF-N supported studies such as the Education Status Report and the Public Expenditure Tracking Survey are expected to help improve the relationship between budget allocations and social outcomes.

Enhance the capacity building efforts, especially at the sub-national levels. This would help link planning and budgeting processes to needs, provide a more systematic analysis of the fiscal position of states/localities and sector, offer complete reporting of expenditures and adequate monitoring and evaluation of outcomes, and strengthen public financial management and accountability systems.

Improve the efficiency of public expenditures, especially at sub-national government through capacity building, analytical work, and follow-up support. Northern states allocate a high share (50 percent) of their budget to social sectors, but the high level of absolute poverty and low levels of social indicators necessitate further improvements in the efficiency of expenditures to make room for expanded coverage, particularly in Northern states with lowest access to social services. MDTF-N supported ongoing studies such as ESR and PETS would help serve the objective of rationalizing public expenditures.

C. Community level

Pursue sensitization activities to strengthen stakeholders’ ownership and strong community

participation and provision of maintenance and operation costs to ensure benefits are sustained.

Enhanced stakeholders’ ownership and participation provide models that can be replicable. Some solar electrification and water projects supported by the MDTF-N program in Blue Nile, Kassala and Northern Kordofan states have been efficiently and effectively utilized by the community, generating sufficient revenue to cover the costs of their maintenance and strengthening stakeholders’ ownership and participation to ensure benefits are sustained. One of the main strengths of these replicable models relates to placing provision of basic services with a broad framework of livelihood where income generation and employment creation are an integral part of the project.

Pursue scaling-up of successful community driven type of MDTF-N projects, including both sectoral expansion, for instance, by putting more emphasis on water supply and geographical by including coverage of other states in Northern Sudan.

D. BEYOND MDTF - REPLICATION OF SUCCESSFUL ACTIVITIES

109. A number of the MDTF-funded activities are potentially strong candidates for replication owing to (i) their relevance in addressing the priority needs of targeted

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beneficiaries; and (ii) the approach used in their design and implementation. The following outlines a possible road map for replication.

110. Examples of promising activities include: (i) community-led social infrastructure development and provision of equipment such as basic schools, health and community centers, water supply, and solar energy; (ii) development of livestock markets, and technical and managerial support to gum Arabic producers including improving their access to microfinance. The MDTF-N implementation experience shows that these activities feature strong beneficiary ownership because they contribute to promote or consolidate social capital, or support income generating activities.

111. Examples of successful design and implementation features include:

(i) the empowerment of beneficiaries to identify, prioritize and implement activities, from planning to funding and maintenance with support from local and state government agencies. This community-driven approach with in-kind and cash contributions from communities has enhanced beneficiary participation and government ownership leading to adequate institutional support from Federal, State, and local agencies. Communities have mobilized to ensure that benefits would be sustained and have shown strong initiative in operating and maintaining some of the projects. This has been especially the case where activities combine provision of social services and income generating activities such as water supply, solar electrification, or a combination of social and income earning activities such as a school alongside a market that generates revenues.

(ii) the formulation of implementation arrangements among key stakeholders including the State/Local authorities, government, agencies, non government entities, and the communities that have been clearly defined and accepted by all concerned. For example, under the livestock project, autonomous management of the livestock markets by non government entities, with partnership agreements with localities and state Ministries of Animal Resources has been a key factor of success. Similarly, for the development of water points, the formulation of adequate partnership between communities and the states’ water authorities has been critical. This defined the role, responsibilities, and revenue sharing arrangements for the water points. Support by water authorities at the federal/state level in setting appropriate water tariffs to cover O&M, in conducting training on organizational aspects and management such as fees collection and bookkeeping has also enhanced sustainability prospects.

(iii) for income generating activities in agriculture, vigorous efforts on capacity

building is needed to enhance farming skills, sustaining farmers input supply and their agricultural equipment, maintaining the water sites and pumps, dealing with the marketing aspects of their produce/livestock, and training on financial aspects such as bookkeeping. In addition, there is a need to enhance the roles and capacity of line ministries of agriculture and animal resources to support extension and research needs, as well as to call upon the private sector and other non government entities whenever feasible.

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112. Finally, the health and education projects could also be candidates for replication or

scaling up, but provided that the lessons learned under the MDTF-N are fully taken into account. That is that the followed up Action Plan recommended by the Sustainability Study Report should closely inform the design and implementation of future operations, in particular the provision of operation and maintenance by federal and state governments is fully secured.

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ACTION PLAN FOR AN EXIT STRATEGY Objective Action/Activity Responsible Party Target Date

1.0 Correct deficiencies in the construction/rehabilitation of infrastructure including schools , health facilities and water points

1.01Assess quality of infrastructure to identify deficiencies

Consultant to assist MA, TTL and respective project coordinators ( CDF, BNSSEP, BEP, DHSDP) in formulating work plans and implementation arrangements

March 2012

1.02 Formulate work plans for each relevant project December 2012

1.03 Implement work plans Implementation is scheduled for Decemeber 2012 and expected to continue beyond the MDTF-N current closing date

1.04 Formulate maintenance strategy for each type of infrastructure to be carried out at the State, Locality, or community levels

Consultant to assist MA, TTL and respective project coordinators ( CDF, BNSSEP, BEP, DHSDP) in formulating strategies that will be agreed upon with local authorities

December 2012 for N. Kordofan, Kassala and Red Sea states and the completion date for Blue Nile and S. Kordofan may take longer depending on the security situation

1.1 Enhance access to water by completed schools and health facilities

1.1 Confer with communities and agree on how water can be supplied to the facilities concerned.

PIUs for CDF, BNSSEP, BEP, DHSDP

December 2012 for N. Kordofan, Kassala and Red Sea states and the completion date for Blue Nile and S. Kordofan may take longer depending on the security situation

1.2 Enhance access to electricity where necessary for health facilities and schools.

1.2 Use solar panels as necessary to provide electricity for health facilities where possible and for communities willing to maintain them. Use grid connection when it is best alternative.

TTLs/PIUs of CDF, ILPMP, BNSSEP

December 2012 for N. Kordofan, Kassala and Red Sea states and the completion date for Blue Nile and S. Kordofan may take longer depending on the security situation

Objective Action/Activity Responsible Party Target Date

45

1.3 Improve environmental sustainability of water points and health facilities.

1.31 For water points and especially haffirs where there is the shared use by humans and animals prepare separate basins for watering of animals.

1.32 Provide incinerators for health facilities such as CDC, Blue Nile state.

MDTF-N safeguard specialist in collaboration with federal and States’ ministries of health.

December 2012 for N. Kordofan, Kassala and Red Sea states and the completion date for Blue Nile and S. Kordofan may take longer depending on the security situation

2.0 Ensure staffing needs and annual operating cost are provided for facilities constructed and rehabilitated

2.1 Project Units to make an inventory of schools and health facilities supported under MDTF-N and agree with State Ministries of Education and Health on staffing needs and annual operating cost needs to be included in State budgets.

PIUs of CDF, BNSSEP, SKSSEP, BEP, DHSDP - in consultation with respective authorities in State and Localities. TTLs to ensure this is done

State and Locality budgets to reflect these funding needs by end December 2012 if the insecurity situation improves in Blue Nile and S. Kordofan

2.1 Ensure adequate availability of textbooks

2.1 Review availability of textbooks and other basic school supplies to improve learning results as part of the process of preparing the budget.

TTLs/PIUs of BEP and SKSSEP

1.2 Ensure staffing needs and annual operating cost are provided for TTIs and VTC of S. Kordofan

2.2 Inventory of staffing and other annual operating cost needs for TTIs, and VTC of S. Kordofan and agree with State Ministries of Education on inclusion in annual budget.

TTLs/PIUs of BEP and SKSSEP

2.3 Ensure staffing needs and annual operating cost are provided for Rural Hospitals, Maternity Centers, CDC of Blue Nile State

2.3 Agree with State Ministries of Health on staffing needs, provision of medicines, and other medical supplies on a regular basis for Rural Hospitals, Maternity Centers, CDC of Blue Nile State.

TTLs/PIUs of DHSDP, and BNSSEP

Objective Action/Activity Responsible Party Target Date

3. Ensure sustainability of activities started under the

3.1 Redefine the role of MFU to be complementary to that of SMDF with MFU concentrating on supervision of MFIs and SMDF supporting the

TTL with CBoS Redefine role & Plan by December 31, 2012

46

Microfinance Project. MFIs financially.

3.2 Prepare financial sustainability plan for SMDF to be able to play new role.

3.3 Obtain agreement with CBoS and MoFNE that SMDF will be provided with the resources necessary for on lending to MFIs and to cover the operating costs of SMDF.

3.4 CBoS should provide policy and institutional support to ensure the sector remains financially viable.

TTL and MFU

CBoS and MoFNE

Ongoing

4. Ensure maintenance of the rail line

4. Include the maintenance of the Babanousa-Wau rail line in the annual budget of the Sudan Railway Authority.

Sudan Railway Authority Ongoing

5. Ensure that the Demazin-Kurmuk road is fully rehabilitated and functional

5.1 Mobilization of remaining Government CF

5.2 Provision by government of additional resources to complete Section 3 of the Demazin-Kurmuk road so as to make this entire road functional

TTL/NHA to raise the issue with the Ministry of Transport, MoFNE, and Blue Nile State

Pending the improvement of security situation in Blue Nile State

6. Ensure maintenance of the road program

6. Ensure that the road program under the MDTF-N is included into the national road network eligible for annual maintenance

TTL/NHA

Objective Action/Activity Responsible Party Target Date

7. Improving sustainability of Livestock Markets (ILPMP).

7.1 Demazin Locality to provide its counterpart resources for the Demazin livestock market.

TTL/PIU with support from State Ministry of Animal Resources

Before project closing date of June 30, 2013

7.2 Determination of the legal status and ownership of the rehabilitated markets via consultation among the Federal Ministry, the States, the Localities and the Herders Association.

47

7.3 Clarification of roles and responsibilities of different stakeholders, such as the states, localities and targeted communities, and the coordination arrangements that should exist between them.

8 Consolidate reforms started in the Gum Arabic sector.

8.1 Put in place a unified institutional framework with relevant authority for ensuring that the reforms are fully implemented.

8.2 Develop and adopt rules and regulations as well as guidelines for putting in place a sustainable auction system.

8.3 Provide intensified training to GAPAs on Islamic banking practices to better understand the in-kind payment and profit sharing practices of Sharia banking.

TTL/PIU and Federal Ministry responsible for Gum Arabic Sector and gum traders

TTL/PIU/Ministry/Gum traders

PIU/SMDF/MFU

Before project closing date of June 30, 2013

Objective Action/Activity Responsible Party Target Date

9. Help prepare the handover of MDTF-N projects to authorities and beneficiaries at the federal, state, and Locality levels.

9.1 Organize workshops at the state level to sensitize authorities on the need for including adequate resources for operation and maintenance as part of the state budgets, in states that are the major focus of MDTF-N interventions such as Blue Nile, S. Kordofan, N. Kordofan, Kassala, and Red Sea.

9.2 Organize separate workshops in each of the affected states for Locality commissioners and community leaders on proper budgeting and funding for O&M for basic services

TTLs/MoFNE

TTLs/PIUs and state MoFNE

TTLs/PIUs

09/2012 to 06/2013

12/2012 to 06/2013

48

9.3 Strengthen and accelerate capacity building efforts in particular for community leaders, emphasizing the need for efficient management and continued operation of the MDTF-N funded projects after they close.

12/2012 to 06/2013

49

خطة عمل إلستراتيجية االستدامة

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

تصحيح أوجه القصور في 1.0إنشاء/إعادة تأهيل البنية التحتية بما في ذلك المدارس، ومنشآت الرعاية

الصحية، ونقاط إمدادات المياه

يقوم االستشاري بمساعدة مسؤول الرصد، ورئيس تقييم جودة البنية التحتية لتحديد أوجه القصور 1.01العمل، ومنسقي كل مشروع على حدة (صندوق التنمية

المجتمعية، والمشروع الطارئ لبدء األعمال في النيل األزرق، ومشروع التعليم األساسي، ومشروع المركزية

نظام الرعاية الصحية والتنمية) عند صياغة خطط العمل وترتيبات التنفيذ.

2012مارس/آذار

2012ديسمبر/كانون األول صياغة خطة عمل لكل مشروع على حدة 1.02

التاريخ المحدد للتنفيذ هو تنفيذ خطط العمل 1.03

، 2012ديسمبر/كانون األول

ستمرار إلى ما ومن المتوقع اال

بعد تاريخ إقفال صندوق دعم

)MDTF-N( المانحين القومي

صياغة إستراتيجية صيانة لكل نوع من أنواع 1.04

البنية األساسية يتم تنفيذه على المستوى الوالئي أو

المستوى المحلي أو المستوى المجتمعي.

يقوم االستشاري بمساعدة مسؤول الرصد، ورئيس

العمل، ومنسقي كل مشروع على حدة (صندوق التنمية

مال في النيل المجتمعية، والمشروع الطارئ لبدء األع

األزرق، ومشروع التعليم األساسي، ومشروع المركزية

نظام الرعاية الصحية والتنمية) عند صياغة خطط

العمل وترتيبات التنفيذ.

2012ديسمبر/كانون األول

لواليات شمال كردفان وكسال

والبحر األحمر، وقد يكون تاريخ

اإلتمام (اإلنجاز) للنيل األزرق

بعد ذلك حسب وجنوب كردفان

الموقف األمني

50

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

تعزيز سبل الوصول إلى المياه 1.1

من جانب المدارس ومنشآت الرعاية

الصحية التي تم إنجازها

التشاور مع المجتمعات المحلية واالتفاق على 1.1

كيفية إمداد المياه إلى المنشآت المعنية.

تنفيذ المشروع لصندوق التنمية المجتمعية، وحدات

والمشروع الطارئ لبدء األعمال في النيل األزرق،

ومشروع التعليم األساسي، ومشروع المركزية نظام

الرعاية الصحية والتنمية

2012ديسمبر/كانون األول

لواليات شمال كردفان وكسال

والبحر األحمر، وقد يكون تاريخ

لنيل األزرق اإلتمام (اإلنجاز) ل

وجنوب كردفان بعد ذلك حسب

الموقف األمني

تعزيز سبل الوصول إلى 1.2

الكهرباء، إن اقتضت الضرورة، في

منشآت الرعاية الصحية والمدارس.

استخدام األلواح الشمسية، إن اقتضت الضرورة، لتوفير

الكهرباء لمنشآت الرعاية الصحية إن أمكن للمجتمعات

واستخدام الربط مع في الحفاظ عليها،المحلية الراغبة

الشبكة إن كان ذلك أفضل بديل

رؤساء فرق العمل/وحدات تنفيذ المشروع في صندوق

التنمية المجتمعية، ومشروع تحسين إنتاج وتسويق

الماشية، والمشروع الطارئ لبدء األعمال في النيل

األزرق

2012ديسمبر/كانون األول

لواليات شمال كردفان وكسال

والبحر األحمر، وقد يكون تاريخ

اإلتمام (اإلنجاز) للنيل األزرق

وجنوب كردفان بعد ذلك حسب

الموقف األمني

تحسين االستدامة البيئية لنقاط 1.3

إمدادات المياه ومنشآت الرعاية

الصحية

بالنسبة لنقاط اإلمداد بالمياه وخاصة (الحفير) 1.31

جانب اإلنسان عندما يكون هناك استخدام مشترك من

والحيوان، يتم تجهيز أحواض منفصلة لسقاية الحيوانات

توفير محارق لمنشآت الرعاية الصحية، مثل 1.32

مركز مكافحة األمراض والوقاية منها في والية النيل

األزرق

بالصندوق بالتعاون مع االستدامة البيئيةأخصائي

وزارتي الصحة على المستوى الفيدرالي والوالئي

2012يسمبر/كانون األول د

لواليات شمال كردفان وكسال

والبحر األحمر، وقد يكون تاريخ

اإلتمام (اإلنجاز) للنيل األزرق

وجنوب كردفان بعد ذلك حسب

الموقف األمني

51

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

ضمان توفير احتياجات 2.0

الموظفين وتكاليف التشغيل السنوية

للمنشآت التي تتم إقامتها واعادة

تأهيلها

تقوم وحدات المشروع بعمل حصر للمدارس 2.1

ومنشآت الرعاية الصحية التي تتم مساندتها في إطار

الصندوق، وتتفق مع وزارت الصحة والتعليم على

حتياجات الموظفين مستوى الواليات بشأن إدراج ا

وتكاليف التشغيل السنوية في موازنة الوالية

وحدات إدارة المشروع لصندوق التنمية المجتمعية،

والمشروع الطارئ لبدء األعمال في النيل األزرق،

والمشروع الطارئ لبدء األعمال في جنوب كردفان،

ومشروع التعليم األساسي، ومشروع المركزية نظام

ويقوم رؤساء فرق العمل والتنمية.الرعاية الصحية

بالتأكيد على تنفيذ ذلك

ال بد أن تظهر موازنات الواليات

والمحليات هذه االحتياجات

بنهاية ديسمبر/كانون التمويلية

. ويشمل ذلك 2012األول

واليتي النيل األزرق وجنوب

إذا تحسن الموقف كردفان

األمنيمراجعة مدى توفر الكتب المدرسية وغيرها من 2.1 ضمان توفير الكتب المدرسية 2.1

مستلزمات مدارس التعليم األساسي لتحسين نتائج التعلم

في إطار عملية إعداد الموازنة

رؤساء فرق العمل/وحدات إدارة المشروع في مشروع

التعليم األساسي والمشروع الطارئ لبدء األعمال في

جنوب كردفان

ضمان توفير احتياجات 2.2

الموظفين وتكاليف التشغيل

السنوية لمعاهد تدريب المعلمين

ومراكز التدريب المهني في

جنوب كردفان

عمل حصر الحتياجات الموظفين وتكاليف التشغيل

السنوية لمعاهد تدريب المعلمين ومراكز التدريب المهني

في جنوب كردفان، واالتفاق مع وزارات التعليم على

دراج في الموازنة السنوية مستوى الواليات بشأن اإل

رؤساء فرق العمل/وحدات إدارة المشروع في مشروع

التعليم األساسي والمشروع الطارئ لبدء األعمال في

جنوب كردفان

ضمان توفير احتياجات 2.3

الموظفين وتكاليف التشغيل السنوية

للمستشفيات ومراكز رعاية األمومة

في المناطق الريفية ومركز مكافحة

األمراض في والية النيل األزرق

االتفاق مع وزارات الصحة على مستوى الواليات بشأن

احتياجات الموظفين وتوفير األدوية وغيرها من

المستلزمات الطبية بصفة منتظمة للمستشفيات ومراكز

رعاية األمومة في المناطق الريفية ومركز مكافحة

زرقفي والية النيل األوالوقاية منها األمراض

رؤساء فرق العمل/وحدات تنفيذ المشروع في مشروع

المركزية نظام الرعاية الصحية والتنمية والمشروع

الطارئ لبدء األعمال في النيل األزرق

52

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

. ضمان استدامة األنشطة التي تم 3

البدء فيها في إطار مشروع التمويل

األصغر

إعادة تحديد دور وحدة التمويل األصغر كي يكون 3.1

مكمال لدور صندوق تنمية التمويل األصغر في

السودان مع تركيز الوحدة على مراقبة مؤسسات التمويل

األصغر، وقيام الصندوق بمساندة هذه المؤسسات ماليا

إعداد خطة االستدامة المالية لصندوق تنمية 3.2

ودان كي يكون قادرا على القيام التمويل األصغر في الس

بدور جديد

الوصول إلى اتفاق مع البنك المركزي السوداني ووزارة

المالية واالقتصاد الوطني إلتاحة الموارد الضرورية

لصندوق تنمية التمويل األصغر في السودان إلقراض

مؤسسات التمويل األصغر وتغطية تكاليفه التشغيلية

ركزي السوداني تقديم المساندة يتعين على البنك الم 3.4

المؤسسية وتلك الخاصة بالسياسات لضمان الحفاظ

على السالمة المالية لهذا القطاع

رئيس فريق العمل مع البنك المركزي السوداني

رئيس فريق العمل مع وحدة التمويل األصغر

البنك المركزي السوداني ووزارة المالية واالقتصاد

الوطني

المحدد إلعادة تحديد هذا الموعد

31الدور والخطة هو

2012ديسمبر/كانون األول

جار العمل

53

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

. ضمان صيانة خط السكة 4

الحديدية

. إدراج صيانة خط سكة حديد بابانوسا ــ واو في 4

الموازنة السنوية لهيئة سكك حديد السودان

جار العمل سكك حديد السودان هيئة

تشغيل . ضمان إعادة التأهيل وال5

رمكالتام لطريق الدمازين ــ ك

في المتبقي من التمويل المقابل من الحكومة دفع 5.1

الزمن المحدد

قيام الحكومة بتوفير موارد إضافية الستكمال الجزء 5.2

الثالث من طريق الدمازين ــ كورموك حتى يتم تشغيل

الطريق بالكامل هذا

يقوم رئيس فريق العمل/الهيئة القومية للطرق السريعة

بطرح هذه القضية مع وزارة النقل، ووزارة المالية

واالقتصاد الوطني، ووالية النيل األزرق

األمر مرهون بتحسين الموقف

األمني في والية النيل األزرق

برنامج . ضمان االستمرار في6

الطرق تأهيل

ان إدراج برنامج تأهيل الطرق في إطار . ضم6

ضمن شبكة الطرق القومي دعم المانحينصندوق

الوطنية المؤهلة للصيانة السنوية

رئيس فريق العمل/الهيئة القومية للطرق السريعة

استدامة أسواق الماشية ضمان . 7

في إطار مشروع تحسين إنتاج

وتسويق الماشية

التوميل المقابل لسوق تقوم محلية الدمازين بتقديم 7.1

ماشية الدمازين

رئيس فريق العمل/وحدة تنفيذ المشروع بمساندة من وزارة

الثروة الحيوانية

30قبل تاريخ إقفال المشروع في

2013يونيو/حزيران

تحديد الموقف القانوني لألسواق المعاد تأهيلها 7.2

وملكيتها من خالل التشاور بين الوزارة الفيدرالية،

والواليات، والمحليات، ورابطة رعاة الماشية.

توضيح أدوار ومسؤوليات مختلف أصحاب 7.3

المصالح المباشرة، مثل الواليات والمحليات والمجتمعات

بينها. تنسيقالو المحلية المستهدفة،

54

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

تدعيم اإلصالحات التي تمت في 8

قطاع الصمغ العربي

وضع إطار مؤسسي موحد موضع التنفيذ مع 8.1

الوزارة المعنية لضمان التنفيذ التام لإلصالحات

وضع وتبني قواعد ولوائح وارشادات لتفعيل نظام 8.2

مستدام للمزايدات

تقديم دورات تدريبية مكثفة لرابطات وجمعيات 8.3

منتجي الصمغ العربي عن الممارسات المصرفية

اإلسالمية لتحسين فهم نظام الدفع العيني وممارسات

تقاسم األرباح حسب النظام المصرفي وفق أحكام

الشريعة

رئيس فريق العمل/وحدة تنفيذ المشروع، والوزارة

الفيدرالية المسؤولة عن قطاع الصمغ العربي وتجاره

الصمغ

رئيس فريق العمل/وحدة تنفيذ المشروع/الوزارة/تجار

الصمغ

وحدة تنفيذ المشروع/صندوق تنمية التمويل األصغر في

السودان/وحدة التمويل األصغر

30المشروع في قبل تاريخ إقفال

2013يونيو/حزيران

55

التاريخ المحدد الطرف المسؤول العمل/النشاط الهدف

م . المساعدة في إعداد تسلي9

دعم المانحين صندوق مشروعات

للسلطات والمستفيدين على القومي

المستويات: الفيدرالي والوالئي

والمحلي

تنظيم ورش عمل على المستوى الوالئي إلشعار 9.1

السلطات بالحاجة إلى إدراج موارد إضافية للتشغيل

والصيانة في إطار موازنات الواليات، في الواليات التي

دعم صندوق كيز األكبر لمشاريع تمثل محور التر

، مثل النيل األزرق وجنوب كردفان القومي المانحين

وشمال كردفان وكساال والبحر األحمر

ية متضررة تنظيم ورش عمل منفصلة في كل وال 9.2

لمسؤولي المحليات وقادة المجتمع المحلي بشأن اإلعداد

المناسب والسليم للموازنات وتمويل أعمال التشغيل

والصيانة للخدمات األساسية

تعزيز جهود بناء القدرات وتسريع وتيرتها ال سيما 9.3

لقادة المجتمعات المحلية، والتشديد على الحاجة إلى

كفاءة والتشغيل المستمر اإلدارة التي تتسم بال

القومي دعم المانحينصندوق للمشروعات التي يمولها

بعد إقفالها

رؤساء فرق العمل/وزارة المالية واالقتصاد الوطني

رؤساء فرق العمل/وحدات تنفيذ المشروع ووزارة المالية

واالقتصاد الوطني على المستوى الوالئي

رؤساء فرق العمل/وحدات تنفيذ المشروع

06/2013إلى 09/2012من

06/2013إلى 12/2012من

06/2013إلى 12/2012من

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ANNEXES

Annex Table 1.1: Financial Summary of the MDTF-N Portfolio

Commitments and Disbursements

MDTF-N GoNU Total

Project costs (US$ million) 252 352 604 Funding proportion (% of project costs)

42 58 100

Disbursements (US$ million) 194 320 514 Disbursements rate (%) 77 90 85 Source: World Bank Staff Quarterly Data as of September 30, 2011.

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Annex 2: Results Matrix for the Sudan MDTF 2005–2011 – Data as of June 30, 2011

JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

1. Institutional development and capacity building

Effective and sustainable modes of local social service delivery established Increased transparency and public accountability throughout public system.

− Civil service Reform implemented

− Decentralization structure in place and functioning

− System in place for effective management of external aid

− A procurement system based on transparency and efficiency in place

− Modern accounting and auditing systems at all levels of government.

− Comprehensive budget with public involvement in planning and monitoring.

Improve capacity at federal, state and local levels to deliver decentralized services • Percentage of budget

actually allocated to sub-national level Progress 72 % Target 75 %

• Percentage of budget actually allocated to sub-national level within 60 days Baseline 0% Achieved 100 % (2010)

• Number of people trained in fiduciary, public planning, and related management Baseline 0 Progress 3,186 Target 4,390

• Number of administrative buildings built, rehabilitated, and equipped Baseline 0 Progress 150 Target 191

• Number of localities equipped with working facilities for civil servants Baseline 0 Achieved 16(2010)

PSCAP (FY08) (US$ 2.6m) TAF (FY06) (US$4.9) South Kordofan State Emergency Project (FY 07) (US$ 7.7m) Abyei Start Up Emergency Project (FY 09) (US$ 6m) Blue Nile ERL (FY 07) (US$ 10.1m)

2. Rule of law and governance

Constitutional framework for Sudan, consistent with the CPA and international human rights conventions, in place and fully operational. Improved access to justice, especially in war-affected areas Improved equity of access to judicial system Professional and accountable police

− National institutions and processes of Governance established by the CPA in place and functioning in accordance with the agreed timeline, leading to free and fair elections.

− Gender equity mainstreamed in legislation and policy choices

− Improved performance of Ministry of Justice in criminal and corporate law.

− Correctional system in conformity with international standards.

− Sound policies for land use in a clear and widely-supported legislative framework

− Clear regulatory

Improve access and quality of judicial services

• Number of judges trained Baseline 0 Achieved 145(2009)

• Number of court houses constructed or rehabilitated Baseline 0 Achieved 5(2009)

• Number of offices including the National Judicial Service Commission (NJSC) rehabilitated Baseline 0 Achieved 14 (2009)

Judiciary (FY 06) (US$ 4.6m)

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JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

service, based on full respect for human rights. Access to information through independent, high quality media

framework for Civil Society involvement that ensures basic freedoms

3. Economic policy and management

Policies for stable macro economy with high economic growth maintained. Sound oil management Improved External Debt Sustainability/ management Functioning Central Banking and Financial System

− Currency conversion Completed

− Micro-finance legislation and operating regulations enacted

− Progress on HIPC − Establish oil

management system − Sudan Petroleum

Corporation (SPC) and its subsidiaries’ accounts consolidated

Support the Central Bank of Sudan effectively, efficiently and transparently introduce a new national unifying currency into the country. • New unified

currency freely circulating in Sudan and accepted by the private sector for commerce and individuals private transactions Achieved 2008

• Number of newly designed banknotes and coins Achieved 2008

Banknotes 6 Coins 5

• Amount of printed

banknotes and coins Achieved 2008

Banknotes 1,335 m Coins 242.5 m

• Amount of distributed

banknotes and coins Achieved 2008

Banknotes 900 m Coins 242.5 m

New Currency Proj. (FY07) (US$25.2m) Micro Finance Proj. (FY07) (US$ 11.8m)

4. Productive sectors (i.e. rural and private sector development)

Increased productivity amongst pastoralists, traditional farmers and fishermen Sustainable management and utilization of key

− Enabling policy framework for development of productive sectors

− Improved access to credit and markets

− Reduced urban unemployment Increased share of industry

− Access to micro-finance for small farmers and pastoralists doubled, including increased access to credit for women

− Veterinary services Expanded

− Priority stock routes

Improved agricultural and livestock production and marketing in selected areas • Number of animals

traded in the rehabilitated livestock markets, by type Baseline

Sheep 74,916 Goat 228 Cattle 2,660 Camel 1,493

Progress Sheep 101,822 Goat 2,884 Cattle 8,050

Agriculture and Livestock • Length of livestock routes

demarcated and rehabilitated Baseline 0 km Progress 286 km Target 286 km

• Pasture area planted using selected seeds Baseline 0 ha Progress 6,520 ha Target 14,000 ha

• Number of sacks of improved seed that have been distributed Baseline 0 Achieved 750 (2011)

Gum Arabic Pr. (FY09) (US$ 7m) Livestock Project (FY07) (US$ 6.6m) South Kordofan State Emergency Project (FY 07) (US$ 7.7m) Abyei Start Up Emergency Project (FY 09) (US$ 6m) Blue Nile ERL (FY 07) (US$ 10.1m)

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JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

natural resources (fisheries, forests etc)

and degraded rangelands rehabilitated

− Improved yields of major crops

− Reduced conflicts between farmers and Pastoralists

− Sustainable increase in the national herd size with increased current income of pastoralists

Camel 2,712 Target

Sheep 93,225 Goat 1,683 Cattle 3,586 Camel 1,958

• Margin between

prices for a sheep paid in targeted secondary market and terminal market (%) Baseline 25 % Progress 18 % Target 10 %

• Targeted livestock

markets rehabilitated, with at least 100% recovery rate for Operation and maintenance Baseline 0 Progress 5 Target 6

• Percentage of the FOB price received by small scale gum producers after the project intervention Baseline 5-10% Progress 50 % Target 50 %

• Percentage of Gum Arabic Producers Association (GAPAs) with effective saving and credit systems Baseline 2.4 % Progress 81 % Target 72 %

Increase access to financial services • Staff in microfinance

unit of the central bank trained and

• Number of farmers

adopting and trained in new technologies Baseline 0 Progress 4,000 Target 16,500

Access to finance • Number of Microfinance

providers Baseline 0 Progress 9 Target 12

• Number of banks with established Microfinance Unit Baseline 0 Progress 10 Target 12

• Number of financial products offered by providers receiving Sudan Microfinance Development Facility (SMDF) assistance in deposits, range of loans, payments, and transfers Baseline 0 Progress 4 Target 5

Micro Finance Proj. (FY07) (US$ 11.8m)

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JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

ready for good practice in regulation and supervision Achieved 2010

• Microfinance regulatory framework was drafted, reviewed, and approved by Central Bank of Sudan Achieved 2010

• Microfinance Policy was drafted Achieved 2010

• Sudan Microfinance Development Facility (SMDF) was established as a wholesale microfinance intermediary institute Achieved 2009

5. Basic social services

EDUCATION Improved quality and access to formal and informal education

− Textbooks provided to each student (2011)

− Quality of education regularly monitored and showing sustained improvement

− Materials developed in all subjects including science and technology education

− Continued expansion of classrooms

− Integrated planning on water and sanitation, including retrofitting schools with latrines and water points

− Training system at the various levels fully operational

Increased Access to basic education • Students enrolled in

primary education in selected schools Baseline

M 68,958 F 20,441

Progress M 83,528 F 55,413

Target M 106,206 F 87,394

• Teachers evaluated

positively following in-service training Baseline 0 %

• Number of classrooms built or rehabilitated Baseline 0 Progress 2,451 Target 2,880

• Number of teachers provided in-service training Baseline 0 Progress 10,953 Target 11,380

• Number of schools with teacher dormitories Baseline 7 Progress 217 Target 367

• Number of primary school

SD - Comm Devp Fund CDF (FY 06) (US$ 52.8m) South Kordofan State Emergency Project (FY 08) (US$ 7.7m) SD - Basic Education Project (FY 09) (US$15 m) Blue Nile ERL (FY 08) (US$ 10.1m) Abyei Start Up

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JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

− At least 90% of teachers trained

− Framework for alternative learning and vocational training adopted

Progress 0 % Target 15 %

aged children provided with pupil kits Baseline 0 Achieved 432,000

Emergency Project (FY 09) (US$ 6m)

HEALTH Increased access to health care services and infrastructures Improved quality of life for People Living With HIV/AIDS

− -Increase in service coverage to 60% of the population

− Improvement in maternal and child health outcomes

− Health network functionality increased by equivalent of 50% of 2004 baseline via rehabilitation and new construction

− Overall 25% increase in skilled health workforce over Interim Period

− Well-functioning financial management, planning and policy development in underserved states

Improved access to basic health services • Outpatient

consultations per person per year Baseline 0.16 Progress 0.31 Target 0.30

• Pregnant women receiving antenatal care during a visit to a health provider Baseline 48% Progress 53% Target 65%

• Births attended by skilled health staff (% of total births) in target areas Baseline 19% Progress 37 % Target 30%

• Number of health facilities constructed or rehabilitated Baseline 0 Progress 104 Target 164

• Number of health personnel trained Baseline 0 Progress 1,450 Target 1,130

DHSDP (FY07) (US$ 12m) SD - Comm Devp Fund CDF (FY 06) (US$ 52.8m) South Kordofan State Emergency Project (FY 08) (US$ 7.7m) Blue Nile ERL (FY 08) (US$ 10.1m) Abyei Start Up Emergency Project (FY 09) (US$ 6m)

WATER AND SANITATION Expanded rural access and awareness regarding safe water and sanitation

− Expanded rural access to safe water (66%) and sanitation (60%)

− New and rehabilitated education and health facilities have access to water

− Construction and rehabilitation of water sources and sanitary blocks begin

Increased access to water and sanitation services • People provided

with access to “Improved Water Sources” in rural areas Baseline 0 Progress 760,129 Target 819,166

• Improved community water points constructed or rehabilitated Baseline 0 Progress 395 Target 448

• Number of toilets built in schools and Teacher Training Institutes (TTIs) under BEP Baseline 0 Progres2,359 Target TBD

SD - Comm Devp Fund CDF (FY 06) (US$ 52.8m) South Kordofan State Emergency Project (FY 08) (US$ 7.7m) Blue Nile ERL (FY 08) (US$ 10.1m) Abyei Start Up Emergency Project (FY 09) (US$ 6m) SD - Basic

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JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

Education Project (FY 09) (US$15 m)

6. Infrastructure Increased access to key infrastructures (electricity, roads, railways, ports, river transport, air) Improved access to markets and social services in remote areas.

− Adequate network of well-maintained roads and transport services

− Improved air space management and air transport expanded to isolated parts of the country

− Efficient National Highway Authority

− Improved ports management (sea and river) to facilitate movement of goods and people

− Enhanced private sector participation (PSP) in infrastructure building and management.

− Improved policy and institutional framework for infrastructure sector

− Framework developed for sustainable maintenance and operation of urban infrastructure.

Improved physical access to goods, markets and administrative and social services • Rural people within

2 km with access to an all-season road Baseline NA Progress 215,000 Target 248,500

• Travel time in selected rail and roads (Damazin – Kurmuk) Baseline 10 avg.hr Progress 10 avg.hr Target 1 avg.hr

• Annual travel volume for rail Baseline 50,000 tons Achieved 50,000 tons

• Daily travel volume size by the number of medium trucks Baseline 120 trucks Progress 120 trucks Target 320 trucks

• Roads constructed or rehabilitated Baseline 0 km Progress 365 km Target 347 km

• Rail line constructed or rehabilitated Baseline 0 km Achieved 446 km

NETREP (FY 06) (US$ 67.5m) South Kordofan State Emergency Project (FY 07) (US$ 7.7m) Blue Nile ERL (FY 07) (US$ 10.1m)

7. Livelihoods and social protection

Basic social protection and services provided in areas of return and displacement Increased access to productive opportunities for returnees and community

− Community driven recovery (CDR) programme operational (systems, procedures and capacity)

− Sudan free of the threat of landmines and Explosive Remnants of War (ERW)

− Disarmament and demobilization of regular forces according

− Returning IDPs sustainably returned to

• People benefiting from demining activities Baseline 0 Achieved 514,000 (see also outcomes on access to basic services, infrastructures, productive sector)

(see also outputs on access to basic services, infrastructures, productive sector)

South Kordofan State Emergency Project (FY 07) (US$ 7.7m) Blue Nile ERL (FY 07) (US$ 10.1m)

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JAM Objectives and

Outcomes

JAM Key Indicators and Milestones/

Activities

MDTF Outcomes and Indicators

MDTF Milestones/ Outputs

MDTF Portfolio

households Socially and economically reintegration of ex-combatants

their communities.

8. Information/statistics

Availability of updated quality data and statistics to inform policy makers and planning processes

− Improved and expanded national statistical information base

− Management, planning and technical capacity of Central Bureau of Statistics (CBS) and other elements of the national statistical system strengthened

Reliable and accurate demographic, economic, and social data available • Census completed

Achieved 2009

• Enumerations successfully completed Achieved 2009

Fifth Census Proj. (FY06) (US$ 18.4m)

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Annex 3: Summary Review of Sustainability Indicators of Individual Projects

National Emergency Transport Rehabilitation (NETREP

Microfinance Project (MP)

Technical Resilience

Quality of rail lines appears reasonable. However serious functionality problems with the road program. Currently appears unlikely that roads will be developed to required standards

Not applicable since there are no infrastructure or equipment involved

Financial Resilience

NHA is collecting about US$50 million from tolls on road network but roads under the MDTF unlikely to be developed enough to generate tolls.

At this point the main source of funding for MFIs (for on-lending) are the MFU of the Central Bank and SMDF (from MDTF) since none of the MFIs is deposit-taking. Ability to continue supporting the sector after the project would depend on willingness of the Central Bank to provide the needed resources both for on-lending and to cover operating costs of SMDF. While this is probable, it is not certain.

Economic Resilience

Impact on local economy is good with important economic benefits from opening up of the country

Currently 9 MFIs have obtained their licenses from CBoS with 8 more expected to be registered as MFIs by the end of this year at the latest. There appears to be a strong demand for microfinance services to support economic activities. Economic benefits from a well functioning microfinance network would be enormous.

Social impact No obvious resettlement or outstanding social issues

While the project does not directly promote social organization, it can fund community activities and respond to local concerns as necessary

Environmental Resilience

Appropriate Environmental Impact Assessment done and construction program has incorporated its recommendations.

Not directly applicable even though MFIs should be encouraged to review the environmental projects they finance

Government Ownership

Issues with financing of counterpart funds and problems in getting fulfillment of some state Government obligations suggest poor ownership of the road construction program

There is a very strong ownership of the program by the Central Bank of Sudan (CBoS) as demonstrated by the direct support of loan funds to MFIs by the Central Bank through MFU and the requirement that commercial banks put 6% each of their portfolio for micro businesses and microfinance and the recent increases in murabaha profit margins to encourage commercial banks to invest in MFIs

Other Stakeholder Ownership

Very little other stakeholder participation except for paying tolls.

Commercial Banks are very interested in the program and some of them are creating MFIs that they support on their own. The private sector, as beneficiaries, of the program are also keen to see the program succeed.

Institutional Support

Transport sector policy and strategy are developed and MTRB has established a task force to coordinate and follow-up implementation. No strategy yet for state level maintenance.

A microfinance sector regulatory framework, including a monitoring and evaluation tool, has been completed and approved by the Board of the Central Bank (CBoS) to provide the basis for the supervision of the MFIs by the Microfinance Unit (MFU) of the CBoS. The framework is supposed to support a regulatory environment conducive to the creation of new microfinance institutions, and enhance access to microfinance in Sudan.

Exogenous shocks

Decline in economic activity and a fragile political and security situation will definitely affect completion of the road program

Unlikely that external shock outside of conflicts will affect the sustainability of at least the MFIs in operation.

Likelihood of Sustainability

Uncertain Likely

Basic Education Project Decentralized Health System Development (DHSDP)

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Technical Resilience

Quality of infrastructure construction has not been as good as expected due to poor supervision of construction. Also in a number of the schools, these lack certain amenities such as water, electricity and school furniture. These plus the construction quality may need to be rectified for the schools to be fully functional.

Quality and functionality of infrastructure facilities constructed and rehabilitated appear to be good. Facilities and needed equipment supplied as required. The technical resilience is good.

Financial Resilience

While the State Ministries of Education have shown willingness to recruit the required teachers and get UNICEF to provide school furniture, it is uncertain the plans prepared for funding the operations of the Teacher Training Institutes.

Most operating expenses for the project are financed under the MDTF. There doesn't appear to be any arrangements at the Federal or State Level to include the required financing in the Health Sector budget. While staff and some supplies will likely be financed, maintenance and operating costs for facilities midwifery schools remain an issue. Cost recovery is small and will not cover costs.

Economic Resilience

The main economic benefits come from increased and improved girls education as well as the program on improved teacher training.

Generally positive impact on the health of the population and on maternal health. Reduced incidence of malaria, all of these resulting in good economic benefits.

Social impact The project addresses well social concerns to separate the sexes in their education and has responded by providing facilities for girls where necessary

The impact on maternal and child care is significant and the program is gender sensitive. It provides a forum for improving access of all social classes to medical care.

Environmental Resilience

A number of the facilities lack water for drinking and hand washing, lack fencing for protection and to keep animals out, and lack trashcans for waste disposal.

There is legislation in place for regulating the handling and disposal of infectious medical waste and good progress is being made in all the states involved in implementing the Medical Waste Management Plan

Government Ownership

State Governments have signed off on the basic schools and therefore have shown strong ownership for them. The TTIs remain to be constructed but there doesn't appear to be a guarantee that the States will fund their operations adequately.

State and National Government commitment to providing support in the form promoted by MDTF-N (especially the incentives) is uncertain. While the National and State Governments do like the infrastructure, ownership of the program as a whole is not certain.

Other Stakeholder Ownership

Communities have shown clear and strong interest in these schools and are prepared to support some of the maintenance costs. Other organizations such as UNICEF are also prepared to supply furniture as needed. There is therefore strong stakeholder ownership.

There does not appear to be NGO or UN agencies involvement in the programs being promoted under the project. Other stakeholder ownership is therefore uncertain.

Institutional Support

Strong support for the program from the State Ministries of Education However some more work needs to be done to ensure that the TTIs are better institutionalized

Progress on health system reform appears very slow and the decentralized approach to health system financing is not yet institutionalized and is uncertain

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Exogenous shocks

State Funding of the program will depend on t transfers from the Federal Government which depends on economic activity at the federal level.

Decline in economic activity and a fragile political and security situation will definitely affect financing since the decentralized funding will depend on states who depend on federal transfers.

Likelihood of Sustainability

Likely Uncertain

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Community Development Fund

Abyei Start-up/Emergency Project (ASEP)

Technical Resilience

Several infrastructure (schools, health centres, community centers, water points, solar energy) has been provided under the CDF. In general the quality of these facilities has been reasonable with about 80 to 85% of the facilities deemed structurally sound. Cracks in a few of the buildings and observed leakages seem to have been addressed. There are however several schools and health centers do not have any water or electricity reducing their functionality.

Poor procurement performance and problems with PCU members not conversant with or unwilling to apply, Bank procedures have considerably affected implementation progress of the project. The quality and durability of completed infrastructure and its ease of maintenance would be uncertain

Financial Resilience

Communities manage and maintain the water points. They also contribute to the running of the schools sometimes using resources from the water points. While the States and Localities recognize their responsibilities for the O&M especially of the schools and health facilities, the localities especially rely on the communities, but poverty at the community levels constitute a direct risk to the sustainability of the interventions.

The Abyei Area Administration (AAA) has not shown much inclination about providing any financial resources to support the operation at its completion. Similarly there are no arrangements for ensuring the continuous operation of the agriculture component. Community support for the programs does not look strong

Economic Resilience

There have been substantial perceived economic benefits, especially for women, from the interventions in terms of reduction in time for water collection, reduced physical burden, enhanced education for girls, and improvement in health conditions and reduction in maternal deaths

The agriculture component inputs are free to households; tractors are to be managed by the Ministry of Agriculture. There are no arrangements for households to acquire new inputs on their own for subsequent years or for amortizing the tractors

Social impact The general community involvement in priority selection, project design, and implementation has

The project does not seem to have resulted in strong community organizations or brought the two main tribal groups closer together

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enhanced community empowerment. The Community Centres equipped with Televisions and Satellite Dishes constructed under the MDTF Program, have also helped in strengthening social relationships at community level

Environmental Resilience

Use of latrines have been severely impacted by shortage of water supplies in schools and health units, water points, especially haffirs are largely susceptible to contamination because of the shared use by humans and animals, and shelter belts to protect the buildings, doors and windows are absent. These issues need to be addressed.

Environmental action plans have been prepared for the various planned activities including buildings, grain storage, Abyei Hospital, water yards, hand pumps, and Hafir but these are yet to be implemented.

Government Ownership

The engagement of government institutions, from the federal level to local level in the CDF process is very evident and they have shown a strong willingness to cover staff salaries. However, capacities of the Localities administration (the Mahalliyas) remain a major problem.

There has been very little demonstration of ownership of the Abyei project by the Federal, State or the AAA which seems to have its own ideas as to what the grant should be used for and hence has been interfering in procurement. Even a program to rehabilitate the area hospital has been mired in difficulties with procurement.

Other Stakeholder Ownership

Community ownership of the interventions, especially schools, health facilities, water points and community development centers is very high and has been significantly internalized. Communities have participated actively in decision making, made contributions, and have shown clear readiness to participate in the O&M of the facilities.

Community ownership, participation and management ot water points seem to be strong but otherwise general stakeholder participation is not very strong.

Institutional Support

State institutions are especially supportive of the CDD approach. and the adopted principle that no school or health center

Management effectiveness and integration with the National and Stage agencies appears very low.

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will be constructed unless it is signed off by the State Ministry concerned means that state institutions follow closely new interventions in education and health.

Exogenous shocks

Status of Abyei following the referendum and independence of South Sudan will impact very stronly on whether this project will achieve any lasting results.

Likelihood of Sustainability

Likely Unlikely

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South Kordofan Emergency Start-Up

Project Blue Nile State Emergency Start-Up Project

Technical Resilience Most components already completed and facilities including VTC, schools have been rehabilitated and operational. Roads demined and in use. Project physically and technially in good shape.

Rehabilitated schools and water points are in general in good physical condition and are functional except for a few schools where access to water remains an issue. The CDC was well constructed but there was no provision for an incinerator. The state has also proposed a second level but has no resources to complete this. The CDC also needs a stand-by generator

Financial Resilience State Government already funding Director and staff of the VTC and used Unity Fund to run the center so far. Students at center pay fees plus State has made provision for operating costs of the center. Rehabilitated schools have teachers and have been provided with benches and supplies. Communities charging for water. Looks financially sustainable

Water points are financially sustainable since water is sold by the community and there are arrangements with water Authority to put resources aside to cover maintenance and operating expenses. Staff have been seconded to the CDC but no clear arrangements are in place as to how O&M will be covered though the CDC will charge for its services. A Fisheries Service Center is to be built for the Fisheries Association that will cover its O&M costs.

Economic Resilience Rural Livelihoods component seems to be working well through a revolving fund system run by Village Development Committees (VDC). All the VDCs are operational and the revolving fund system working well.

Rural Livelihoods component has provided animal traction equipment and hand tools to farmers and is operating on a revolving fund basis through VDCs. The Fisheries Center (yet to be completed) will provide economic benefits to members of the Fisheries Association.

Social impact The VDC system is nurturing community organization and social mobilization. Community management of water supply also fosters community organization.

Community management of water points and the VDCs have brought the communities together.

Environmental Resilience

No major environmental issues in the project Water for all schools and incinerator for the Center for Disease Control in Damazin remain an issue to be resolved

Government Ownership

State Government has been fully involved with the project, the components of which were taken from the state and locality development plans. It has already staffed the VTC and schools and it appears that state government is scaling up interventions from their own budget

State Government involvement in project implementation has been relatively good. Equipment for the CDC, not included in the MDTF-N was provided through the Unity Fund and the State Ministry of Health has provided staff for the center. Similarly schools are being provided with teachers and seats/furniture through UNICEF.

Other Stakeholder Ownership

Strong community organization involvement in the rural livelihoods program as well as in the management of the rural water points.

Community organizations have been very much involved in the Water Supply and Rural Livelihood components. The Fisheries Association is also involved in the design and will manage the fisheries component being built under Additional Financing.

Institutional Support Good support from the state and localities Good support from the state and localities

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Exogenous shocks Anything that affects the level of state financing may affect resources available for supporting schools and the VTC.

Anything that affects the level of state financing may affect resources available for supporting schools and the VTC.

Likelihood of Sustainability

Likely Uncertain

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Summary Review of Sustainability Indicators

Improving Livestock Production and

Marketing Project Gum Arabic Revitalization Project

Technical Resilience

The project has rehabilitated 24 boreholes, completed 1 livestock market and is in the process of completing 3 more to apparent good technical standards. While availability of locality counterpart funds depends on the Locality concerned, it is expected that all the markets will be finished and equipped to good standards

No physical infrastructure involved in the project. Mostly sector reform measures, training and capacity building efforts to implementing units and beneficiary Gum Arabic Producers Associations (GAPAs)

Financial Resilience

The Livestock markets should in general be self-supporting with State Government services providing their normal Government services of obligatory immunization and veterinary support. The water points are operating very well under community management and in partnership with the State Water Authorities. In principle therefore the program should be financially sustainable baring any political interference from the Locality Administrations.

The reforms aim at improving the incomes of farmers by reducing taxes and improving marketing mechanisms that would improve the bargaining power of gum producers. There is also a microfinance component that allows GAPAs to market their produce. Financial returns are therefore good for producers who should be able to maintain the programs in the GAPAs

Economic Resilience

The project is improving livestock productivity and marketing opportunities and is seeking to reduce conflict between herders and farmers by creating Livestock routes. The project's economic impact on local economies should be positive.

Generally positive economic returns from the policy reforms, reduction of gum taxes, improved marketing of gum, and the microfinance program run through the GAPAs. The price received by the producer has reportedly increased from15% of FOB price to about 50% as a result of the reforms

Social impact The water points and the creation of livestock routes are improving relationships between herders and non-herders in the localities concerned. The Resettlement Framework is under implementation.

The project has strengthened the GAPAs but there is a possible marginalization of women in the programs aimed at improving gum productivity. The microfinance scheme is group based and is strengthening the GAPAs

Environmental Resilience

The Environment management and medical waste plan are reportedly being implemented satisfactorily

There is no direct negative environmental impact. The productivity program would improve gum production in the 5 states involved.

Government Ownership

Government officials from the State and Locality levels have been involved and have shown significant interest in the activities of the project. There is an issue with the Locality Administration of Damazin in Blue Nile State that has so far been reluctant to provide its counterpart funds for completing the livestock market but aside from that Government ownership seems strong.

Government ownership of the reforms appears very strong even though vested interests especially those losing fees and taxes at the federal, state or locality levels may try to reverse them or reintroduce other fees and taxes. Two ministerial committees have been created to ensure that the 2009 liberalization decree be put into practice but these committees need to be given the required power.

Other Stakeholder Ownership

Community ownership of the program is strong especially around the water points and the livestock routes. The program also seeks to promote private veterinary services which is already being piloted in North Kordofan

The private sector appears happy with the reforms especially in terms of the auction system introduced. The GAPAs are also fully on board with the reforms and the microfinance revolving credit system.

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Institutional Support

The project is piloting an approach of a decentralized versus centralized structure for the delivery of technical and community-managed packages which if successful should help the decentralization policy of Government. So far the state governments are well involved in the project.

Strong institutional support through the reforms that have abolished 13 of the 18 taxes on gum Arabic production and marketing. Other reform measures are facilitating the liberalization of the gum arabic trade.

Exogenous shocks

Possible conflicts in the project zones would affect sustainability

Possible shocks from the weather that would affect production

Overall Likelihood of Sustainability

Uncertain Uncertain

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Annex 4: Annul Revenue, Federal transfers, Expenditure by Northern States, 2000-2009(SDG million) Source: Northern States Final Accounts Reports

Annex Table 4. 1 Northern States Aggregate Actual Revenue, 2000-2009 (in million SDG)

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 AggregateRevenue 724.1 941.8 1,223.50 1,574.40 2,426.50 3,120.40 4,136.00 4,678.90 5,197.70 5,316.60

Red Sea 43.2 59.2 61.2 97.1 103.2 142.9 169.9 267 285.6 0

Kassala 31.3 34.3 42.1 49.4 70.6 102.9 245.7 194.9 294.8 300.7

Gadaref 37.5 47 55 77.3 105 128.7 167.6 187.6 183.8 271.9

Northern 22.7 31.3 35.5 44.6 88.9 123.9 152.3 181.2 202.3 201.6

River Nile 43.1 49.1 82.6 74.1 163.3 199.9 295.3 386.7 295.4 335.3

Blue Nile 0 23.4 26.2 33.1 53.3 64.9 146.6 132.5 233.3 362.3

White Nile 34.6 44.5 48.3 67.5 97 152.8 223.1 311.1 277.5 260.4

Sinar Nile 28.7 35 38.9 40.5 71.6 101.6 175.9 179.6 183.3 207.4

North Kordofan 36.8 39.4 44.8 62.2 81.7 157.1 222.8 242.7 252.7 264.4

South Kordofan 22.9 29.1 30.6 38.2 56.9 95 175.2 208.3 272.5 541.9

West Kordofan 22.1 25.6 28.8 33.8 55.7 0 0 0 0 0

North Darfur 24.6 33.3 56.1 58 82.2 119 159.4 157.4 185.6 190.9

South Durfur 37.6 43.4 51.8 63.7 81.6 116.6 139.5 215.9 242.3 200.7

West Darfur 16.9 21.7 24.5 28.9 75.9 62.4 79.4 108.7 161.6 0

Gezira 86.7 108 154.3 177.9 323.1 410.1 523.9 553.9 562.7 614.2

Khartoum 235.5 317.2 442.9 628.1 916.4 1,142.60 1,259.40 1,351.40 1,564.30 1,565.00

75

Annex Table 4.2 Northern States Actual Own Revenue, 2000-2009 (in million SDG)

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Own Revenue 553.0 619.3 743.1 810.0 1192.7 1443.7 1540.9 1813.0 2009.4 2007.8

Red Sea 41.2 50.8 43 75.1 74.6 103.9 151 243 140.7 0

Kassala 19.4 16.9 15.7 18.9 23.2 23.9 28.3 45 137.5 148.2

Gadaref 34.8 33.3 23.8 37.7 43.1 42.6 58.3 57.8 60.6 90.4

Northern 13.9 10.9 14.4 15.4 33.4 45.7 48.9 56.7 43.4 57.6

River Nile 29.8 23.6 42 24.6 82.1 90.2 51.1 66.9 32.7 58.5

Blue Nile 0 6.4 4 6.6 10.2 10.1 12.3 15.9 20.2 21.5

White Nile 33.4 20.3 24 34.9 33.4 62.8 52.4 80.4 96.5 101.8

Sinar Nile 17.4 20.6 14.1 12 19.9 32.8 29 36.4 27.7 39.9

North Kordofan 22.9 18.3 19.1 23.7 30.7 38.9 51.4 72.5 75.9 80.1

South Kordofan 6.8 8.6 7.4 18.3 14.9 15.9 22.6 76.8 32.1 23.3

West Kordofan 12.9 10.6 9.9 9.6 27 0 0 0 0 0

North Darfur 16.6 12.6 15 13.8 14.1 12.9 16 18.6 21.3 27.9

South Durfur 27.3 28.9 27.5 30.4 36.7 46.2 37 46.4 44.8 68.9

West Darfur 9.1 10.1 6.5 4.5 46.8 10.4 11.4 13 17.2 0

Gezira 32.1 30.2 35.2 45.7 87.5 118.6 99.1 100.1 121.2 148.4

Khartoum 235.5 317.2 441.7 438.7 615.1 788.8 872 883.6 1,137.70 1,141.30

76

Annex Table 4.3

Northern States Actual Federal Transfers (current plus block), 2000-2009 (in million SDG)

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Transfers 171.1 322.5 480.3 764.5 1,233.80 1,676.70 2,595.00 2,865.90 3,188.30 3,308.80

Red Sea 2 8.4 18.1 22 28.6 39 18.9 24 144.8 0

Kassala 11.9 17.5 26.4 30.5 47.4 79 217.4 149.9 157.3 152.5

Gadaref 2.7 13.8 31.2 39.6 61.8 86.1 109.3 129.8 123.2 181.5

Northern 8.8 20.3 21.1 29.2 55.5 78.3 103.4 124.5 158.9 144

River Nile 13.3 25.5 40.6 49.5 81.2 109.7 244.1 319.8 262.7 276.8

Blue Nile 0 17.1 22.1 26.5 43.1 54.7 134.3 116.6 213.1 340.8

White Nile 1.2 24.2 24.3 32.6 63.7 90 170.7 230.7 181 158.6

Sinar Nile 11.3 14.4 24.9 28.5 51.7 68.8 146.9 143.2 155.7 167.5

North Kordofan 14 21.1 25.7 38.6 51.1 118.2 171.4 170.1 176.8 184.3

South Kordofan 16.1 20.5 23.2 19.8 42 79.1 152.6 131.5 240.5 518.6

West Kordofan 9.2 15 18.9 24.2 28.7 0 0 0 0 0

North Darfur 8 20.7 41.1 44.2 68 106.1 143.4 138.9 164.3 163

South Durfur 10.3 14.5 24.3 33.4 45 70.4 102.5 169.5 197.5 131.8

West Darfur 7.8 11.6 18 24.4 29.1 52 67.9 95.7 144.4 0

Gezira 54.5 77.9 119.2 132.2 235.6 291.6 424.8 453.8 441.5 465.8

Khartoum 0 0 1.2 189.4 301.3 353.7 387.4 467.7 426.6 423.7

77

Annex Table 4.4

Northern States Aggregate Actual Expenditure, 2000-2009 (in million SDG) Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Expenditure 734.4 948.0 1246.0 1524.9 2492.9 3146.5 4225.1 4701.7 5235.5 5871.1 Red Sea 34.2 41.5 49 56.6 110.8 129.2 182.5 248.3 247.5 0 Kassala 32.5 37.2 41.6 48.5 74.5 109.4 247 203.6 294 313.7 Gadaref 40.9 50.2 56.8 81.4 105.2 139.4 168 188.1 200.5 250.4 Northern 23.2 32 34.7 46 93.5 128.7 159.4 183.1 230.8 219.6 River Nile 43.7 53.1 82.8 67.1 159.1 208.9 300.1 386.9 299.3 344.2 Blue Nile 0 22.4 26.2 33.5 50.7 69.9 119.8 123.5 220.2 462 White Nile 34.2 50.3 52.4 67.3 99.4 160.8 227.1 306.8 283.5 261.6 Sinar Nile 34.4 39 40.1 44.3 75.9 106.4 202.6 182.9 202.3 205.4 North Kordofan 33.1 39.4 47.9 54.5 92.7 152.3 218.1 263.7 262.7 601.8 South Kordofan 21.1 31.3 32.4 36.4 57.5 93 176.1 218.3 265.3 563.2 West Kordofan 21.9 25.5 29.7 34.3 56.9 0 0 0 0 0 North Darfur 29 33.6 43.2 55 89.4 129.7 163.3 154.5 191.4 190.9 South Durfur 38.9 41.3 55.9 55.7 103.5 126 155.4 207.7 234.9 223.6 West Darfur 15.8 20.8 25.4 27.4 74.7 63.8 82.7 108.9 164.5 0 Gezira 96.2 114.3 151.5 196.3 313.7 403.7 551.4 541 591 653.9 Khartoum 235.3 316.1 476.4 620.6 935.2 1,125.10 1,271.70 1,384.30 1,547.60 1,581.00

78

Annex Table 4.5

Northern States Actual Wages and Salaries, 2000-2009 (in million SDG)

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Own Revenue 338.8 454.4 534.8 667.6 1126.8 1463.9 1845.2 2149.1 2377.4 2462.5

Red Sea 13.2 17 19.4 23.5 46.4 60.5 74.4 74.4 85.4 0

Kassala 16.2 22.3 24.3 29.1 51.9 71.1 82.4 100.3 107.6 128.6

Gadaref 14.9 19.8 26.6 33.7 66.2 67.9 81.3 95.3 108.9 128.7

Northern 14 19.3 21.5 30.6 54.2 73.4 85.9 108.6 121.4 135.6

River Nile 20.1 28.7 32.7 38.5 66.2 91 109.4 131.1 159.3 164.7

Blue Nile 0 9.6 10.9 17.4 26.6 38.2 54.3 68.6 94.8 109.1

White Nile 19.9 29.4 35.4 41.1 58.8 97.6 115.1 133.2 152 180.9

Sinar Nile 15 22.8 22.8 29.7 47.7 64.7 84.8 107.4 118.5 127.9

North Kordofan 16.8 21.7 29.5 32.1 60.1 104.7 144.1 170.9 166.7 182.9

South Kordofan 9.8 14.1 16.3 19.2 37.9 63.4 96.7 118.8 143.3 166.2

West Kordofan 10.5 14.5 16.1 19.3 32.6 0 0 0 0 0

North Darfur 12.7 15.6 26.3 28.8 63.2 75.2 93.3 107.1 121.8 139.1

South Durfur 17.9 21.9 26.9 31.7 57.8 66.6 104.6 129.8 143.4 151.9

West Darfur 15.8 20.8 10.8 14.1 26.2 36 44.4 68 81.5 0

Gezira 69.9 78.5 93.8 120.7 191.5 242.8 315.7 344.8 359.3 392.9

Khartoum 235.5 317.2 441.7 438.7 615.1 788.8 872 883.6 1,137.70 1,141.30

79

Annex Table 4. 6

Northern States Actual Goods and Services, 2000-2009 (in million SDG) Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate 307.4 355.4 439.4 458.5 642.9 753.7 959.5 1028.6 1102.5 1084.3

Red Sea 19.4 17 19.4 18.6 35.8 17 42.2 46.8 43.4 0

Kassala 16.2 13.8 15.7 16.7 19.7 29.7 33.6 39.4 43.9 138.6

Gadaref 18.9 25.2 25.2 24.9 19.9 34.2 53.7 60.5 62.6 36.7

Northern 8.2 12.3 12 13.9 23.8 30.9 38.5 54.8 56.6 54.1

River Nile 10.5 17.9 19.1 16.3 30.9 33.5 45.7 51.6 41.2 46.4

Blue Nile 0 10.3 11.7 11.9 18.3 23.9 31.7 37.8 33.6 37.5

White Nile 9.5 11.2 13.4 12.3 23 37.5 41.9 43.1 50.5 41.7

Sinar Nile 17.5 14.4 13.2 10.5 20.5 24 30 38.6 42.1 31.9

North Kordofan 14.5 14.6 17.6 20.9 25.9 33.3 40.3 53.7 53.5 56.4

South Kordofan 9.9 15.4 13.4 14 16.5 21.1 45 54.2 60.8 61.3

West Kordofan 9.4 9.2 10.6 12.8 21.4 0 0 0 0 0

North Darfur 15.9 16.4 15.6 18.4 17.7 38.6 41.2 43.1 49.9 44.7

South Durfur 18.8 16.7 27 21.2 15.5 35.2 39 56.9 56.9 51.2

West Darfur 0 0 13.5 11.9 47.2 23.1 34.5 35.9 40 0

Gezira 24.8 32.4 47.6 60.2 79.7 105.2 143.3 105.7 142.8 132.7

Khartoum 114 128.5 164.5 174 226.9 266.6 298.9 306.4 324.7 350.9

80

Annex Table 4.7 Northern States Actual Capital Services and Contribution, 2000-2009 (in million SDG) Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate 22.4 38 32.1 25.2 73.7 80.2 63.6 24.4 23.8 48.8

Red Sea 0 0 0 1.8 0.4 24.5 3 3.7 0

Kassala 0 0 0 0 0 0 0 0 0

Gadaref 1.3 0.6 1 3 0.8 7.3 8 4.8 5.1 12.6

Northern

River Nile

Blue Nile

White Nile 1.3 0 0 0 7.9 2.1 0 0 0

Sinar Nile 0.1 0 0 0 1.3 0.3 0.3 0.1 0

North Kordofan 0.8 3 0.8 0.6 0.6 1.4 2.5 0 0

South Kordofan 1.4 0.8 0.3 0.2 1.9 0.8 7.1 2.8 3.1

West Kordofan 0.4 0.1 0.2 0.5 0.6 0 0 0 0

North Darfur 0.2 1.4 0.5 0.1 1.1 0.7 0.7 1.3 1

South Durfur 0.7 0.5 0.4 0.1 15.2 12.2 11.5 0.3 0.4

West Darfur 0 0 0.5 0.3 0 0.2 0.8 0.8 5.6

Gezira 0 0 0 0.5 1.3 1.9 3.5 0.7 0

Khartoum 16.2 31.7 28.3 18.1 42.7 28.8 26.3 10 8.5 36.2

81

Annex Table 4.8

Northern States Actual Development Expenditure, 2000-2009 (in million SDG) Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Transfers 65.7 100.1 239.7 373.6 649.5 848.7 1356.9 1499.6 1731.8 2275.5

Red Sea 1.6 7.5 10.2 12.7 28.2 27.2 62.9 123.4 118.7 0

Kassala 0.1 1 1.6 2.6 2.9 8.6 131 63.9 142.5 46.5

Gadaref 5.8 4.7 4.1 19.9 18.3 30 25 27.5 24 72.3

Northern 1 0.3 1.2 1.5 15.5 24.4 35.1 19.8 52.8 29.9

River Nile 13.1 6.6 31 12.3 62 84.4 145 204.2 98.8 133.1

Blue Nile 0 2.5 3.6 4.2 5.7 7.9 33.9 17 91.9 315.4

White Nile 3.5 9.7 3.6 14 9.7 23.5 70.1 130.5 81 39

Sinar Nile 1.8 1.8 4.1 4.1 6.4 17.4 87.5 36.8 41.7 45.5

North Kordofan 0.9 0.1 0 0.8 6 12.9 31.1 39.1 42.5 362.5

South Kordofan 0 1 2.3 3 1.2 7.6 27.3 42.6 58 335.7

West Kordofan 1.7 1.8 2.8 1.7 2.2 0 0 0 0 0

North Darfur 0.1 0.2 0.8 7.7 7.4 15.3 28.1 3 18.7 7

South Durfur 1.5 2.2 1.6 2.6 15.1 12 0.3 20.7 34.1 20.5

West Darfur 0 0 0.6 1.1 1.3 4.5 2.9 4.3 37.4 0

Gezira 1.5 3.3 10.1 14.9 41.3 53.9 88.9 89.7 88.9 128.3

Khartoum 33.1 57.4 162.1 270.5 426.2 518.8 587.7 677.3 800.9 739.9

82

Annex Table 4.9: Total Northern States Revenues, Expenditures and MDTF-N Resources, 2005-2009 (million SDG)

Total Revenue

o/w Federal Transfers

Total Expenditure

o/w Develop. Expenditures

MDTF-N Resources

Aggregate 22,450 13,635 23,180 7,713 718 Red Sea 865 227 808 332 80 Kassala 1,139 756 1,168 393 63 Gadaref 940 630 946 179 0 Northern 861 609 922 162 0 River Nile 1,513 1,213 1,539 666 0 Blue Nile 940 860 995 466 213 White Nile 1,225 831 1,240 344 5 Sinar Nile 848 682 900 229 8 North Kordofan 1,140 821 1,499 488 60 South Kordofan 1,293 1,122 1,316 471 261 West Kordofan 0 0 0 0 0 North Darfur 812 716 830 72 0 South Durfur 915 672 948 88 18 West Darfur 412 360 420 49 0 Gezira 2,665 2,078 2,741 450 13 Khartoum 6,883 2,059 6,910 3,325 0

Source: World Bank Staff estimates.

83

Annex Table 4.10: Northern States Aggregate Expenditure on Health (in Thousands SDG), 2000 – 2009

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total 58,635.1 89,769.1 121,944.1 163,645.7 227,353.0 349,526.9 396,631.3 433,435.5 484,615.8 583,831.9 Read Sea 4,178.5 5,849.2 6,600.5 7,947.1 13,308.7 17,454.9 29,590.8 20,886.0 22,204.2 Kassala 4,369.1 6,873.0 7,281.9 8,064.6 11,784.6 18,335.3 20,501.0 22,492.6 21,833.4 25,710.8 Gadarif 4,195.7 5,199.4 6,173.3 6,953.2 11,598.5 16,199.1 17,500.6 20,387.8 22,282.8 24,586.5 Northern 1,758.2 3,016.8 3,088.8 4,094.0 7,296.0 13,297.5 11,149.7 14,902.2 18,109.6 20,107.4 River Nile 3,163.8 4,258.7 5,196.7 8,967.5 12,435.2 19,368.3 19,910.2 24,477.4 28,866.0 27,291.0 Blue Nile 0.0 1,944.0 2,000.0 2,424.7 4,331.1 6,722.0 9,933.5 11,819.0 31,070.9 33,829.4 White Nile 3,035.9 5,954.5 7,208.3 7,587.7 10,514.8 16,025.0 18,604.9 21,818.1 25,031.5 25,075.8 Sinar Nile 3,087.3 4,272.0 5,360.7 7,154.7 8,229.9 12,369.1 18,541.9 21,843.8 25,858.8 33,375.1 North Kurdufan 3,107.7 4,124.0 4,784.7 6,397.1 9,134.1 16,271.0 18,268.0 27,949.0 24,663.2 118,477.1 South Kurdufan 731.5 1,643.0 2,146.0 2,614.4 4,050.4 5,175.3 11,458.9 13,727.6 16,374.8 17,822.9 West Kurdufan 1,307.6 1,951.6 2,118.7 2,349.9 2,297.5 North Darfur 959.3 899.5 7,408.0 3,435.2 5,939.0 9,517.9 11,505.3 13,198.1 15,059.9 17,890.1 South Durfur 2,260.1 3,221.9 4,211.2 5,097.8 8,927.1 9,691.2 11,984.4 14,788.4 21,462.8 22,897.2 West Darfur 1,586.0 1,967.0 1,953.9 2,157.5 3,256.4 4,409.7 6,546.2 10,259.3 11,890.5 Gezira 6,598.6 15,071.0 22,504.5 28,251.0 35,363.6 52,598.7 49,710.9 44,690.2 45,816.5 43,067.5 Khartoum 18,295.8 23,523.4 33,906.7 60,149.3 78,886.0 132,092.0 141,425.0 150,196.0 154,091.0 173,701.0

84

Annex Table 4.11: Northern States wages and salaries (in Thousands SDG), 2000 – 2009

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate

33,101.4 57,588.1 76,276.4 89,298.0 129,190.7 184,949.0 223,607.4 254,547.4 276,674.5 285,825.0

Read Sea 1,948.7 3,362.5 3,855.0 4,646.7 7,175.7 10,600.4 12,919.5 11,730.5 13,451.7 0.0 Kassala 3,132.5 5,141.2 5,513.6 6,280.3 9,773.0 15,561.6 17,082.5 18,377.4 17,135.2 20,182.8 Gadarif 1,855.2 2,643.4 4,182.6 5,219.1 6,972.8 10,183.8 11,254.8 14,337.6 15,721.3 16,994.3 Northern 1,148.3 2,469.7 2,736.0 3,174.7 4,968.6 7,508.9 9,457.0 11,584.3 12,540.3 14,141.6 River Nile 1,584.9 3,037.8 3,705.8 4,319.5 6,508.1 10,009.1 13,778.0 16,070.3 18,899.4 19,717.0 Blue Nile 0.0 1,205.6 1,315.1 1,731.3 3,149.5 4,980.6 7,053.3 8,939.9 10,656.9 12,240.8 White Nile 1,806.4 4,665.9 5,117.6 5,224.3 6,939.0 12,041.0 14,125.0 16,828.0 19,736.1 21,066.3 Sinar Nile 1,603.8 2,711.3 3,184.9 4,124.9 5,138.2 9,100.8 11,723.2 13,783.3 15,980.0 18,163.6 North Kurdufan 2,172.0 3,134.0 3,643.0 4,979.5 6,985.9 12,213.0 13,720.2 18,227.4 17,775.7 21,072.3 South Kurdufan 696.5 1,213.3 1,748.9 1,972.4 3,344.8 4,274.2 9,727.4 11,475.4 13,847.6 16,552.9 West Kurdufan 874.1 1,394.1 1,409.5 1,411.5 183.6 0.0 0.0 0.0 0.0 0.0 North Darfur 609.9 404.4 6,982.5 3,037.5 5,179.6 7,700.2 9,664.0 10,811.1 12,296.4 14,827.3 South Durfur 1,413.6 2,276.8 2,894.6 3,501.1 7,030.5 7,485.1 8,506.7 10,778.2 13,447.3 18,389.8 West Darfur 1,586.0 1,967.0 1,375.5 1,654.7 2,854.7 3,507.9 4,966.2 7,590.7 8,037.7 0.0 Gezira 6,001.2 8,139.2 11,761.8 14,506.9 15,908.8 22,252.5 25,929.6 28,363.3 26,916.0 27,897.2 Khartoum 6,668.4 13,821.9 16,850.0 23,513.6 37,078.0 47,530.0 53,700.0 55,650.0 60,233.0 64,579.0

85

Annex Table 4.12: Northern States goods and services (in Thousands SDG), 2000 – 2009

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate 23,362.9 29,294.6 40,216.1 65,288.4 83,867.0 102,748.0 115,107.7 130,091.6 134,911.7 122,511.5 Read Sea 2,009.9 1,641.4 1,927.6 2,562.6 3,885.1 4,264.6 4,778.5 1,683.8 1,561.9 0.0 Kassala 1,235.3 1,730.3 1,751.2 1,772.2 1,959.7 2,773.6 3,418.6 4,115.2 4,698.2 3,579.0 Gadarif 2,088.0 1,684.0 1,763.3 1,648.2 2,865.6 3,686.3 5,844.5 5,962.5 6,307.3 6,435.0 Northern 609.9 522.1 161.7 919.3 1,030.3 1,089.7 1,287.8 1,793.4 1,813.0 1,852.4 River Nile 891.2 1,204.9 1,443.0 2,456.3 4,297.9 4,306.7 3,814.0 6,023.6 4,727.8 6,641.0 Blue Nile 0.0 736.4 500.7 693.5 1,100.8 1,357.8 2,230.2 2,408.3 2,591.3 2,221.4 White Nile 1,201.7 1,147.1 1,933.1 2,363.4 3,177.9 3,473.0 4,110.0 4,092.4 4,647.1 3,749.5 Sinar Nile 1,366.2 1,523.6 1,242.9 1,635.2 2,845.2 3,150.8 4,768.2 6,005.4 6,501.6 5,770.9 North Kurdufan 935.6 990.0 1,141.7 1,417.6 1,931.4 3,427.7 4,018.5 5,827.4 6,556.5 4,196.8 South Kurdufan 35.0 429.7 397.1 490.2 670.0 849.4 1,654.3 2,192.6 2,459.6 1,270.0 West Kurdufan 433.5 557.5 698.2 927.1 1,277.6 0.0 0.0 0.0 0.0 0.0 North Darfur 349.5 495.1 425.5 397.6 382.9 1,817.7 1,841.3 2,387.0 2,763.5 2,338.5 South Durfur 781.0 945.1 1,316.6 1,596.7 1,859.3 2,075.5 3,461.2 4,010.2 4,410.6 2,775.9 West Darfur 0.0 0.0 569.7 481.3 401.7 901.8 1,515.2 2,328.7 3,167.9 0.0 Gezira 339.3 6,471.3 9,009.7 11,159.2 15,487.5 22,202.5 21,872.5 16,326.9 18,900.5 15,170.3 Khartoum 11,086.7 9,216.1 15,934.0 34,768.1 40,694.0 47,371.0 50,493.0 64,934.0 63,805.0 66,511.0

86

Annex Table 4.13:Northern States capital services (in Thousands SDG), 2000 – 2009

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Capital Services Expenditure on Health

570.4 498.7 120.7 953.9 1,356.7 2,483.4 2,414.5 1,378.3 1,434.7 2,877.2

Read Sea 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Kassala 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Gadarif 29.7 13.2 45.1 66.8 87.0 161.6 401.3 87.7 254.1 1,157.2 Northern River Nile Blue Nile White Nile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Sinar Nile 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 North Kurdufan 0.0 0.0 0.0 0.0 120.2 239.1 376.3 0.0 0.0 0.0 South Kurdufan 0.0 0.0 0.0 0.0 35.6 51.7 61.3 59.6 67.6 0.0 West Kurdufan 0.0 0.0 11.0 11.2 0.0 0.0 0.0 0.0 0.0 0.0 North Darfur 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 South Durfur 0.0 0.0 0.0 0.0 0.0 0.0 16.5 0.0 0.0 0.0 West Darfur 0.0 0.0 8.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Gezira 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Khartoum 540.7 485.5 56.0 875.9 1,114.0 2,031.0 1,559.0 1,231.0 1,113.0 1,720.0

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Annex Table 4.14: Northern States development (in Thousands SDG), 2000 – 2009

Items 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aggregate Development Expenditure on Health

1,600.4 2,387.7 5,330.8 8,105.4 12,938.6 59,346.4 55,501.7 47,418.2 71,594.9 172,618.2

Read Sea 220.0 845.2 817.9 737.8 2,248.0 2,589.9 11,892.8 7,471.8 7,190.7 Kassala 1.2 1.5 17.1 12.1 52.0 1,949.0 Gadarif 222.8 858.8 182.4 19.1 1,673.1 2,167.5 Northern 25.0 191.1 1,297.2 4,698.9 404.9 1,524.5 3,756.3 4,113.4 River Nile 687.8 16.0 48.0 2,191.7 1,629.2 5,052.5 2,318.2 2,383.4 5,238.8 933.1 Blue Nile 0.0 2.1 184.2 80.7 383.6 650.0 470.8 17,822.8 19,367.2 White Nile 27.8 141.6 157.6 397.8 511.0 369.9 897.7 648.3 260.0 Sinar 117.3 37.1 932.9 1,394.7 246.6 117.6 2,050.5 2,055.1 3,377.2 9,440.7 North Kurdufan 96.6 391.1 152.9 3,894.1 331.0 93,208.0 South Kurdufan 151.8 15.9 West Kurdufan 836.3 North Darfur 376.6 724.3 South Durfur 65.5 37.3 130.6 3,604.9 1,731.5 West Darfur 21.4 64.8 339.9 684.9 Gezira 258.1 460.5 1,733.0 2,585.0 3,967.3 8,143.7 1,908.9 Khartoum 1,066.7 991.8 35,160.0 35,673.0 28,381.0 28,940.0 40,891.0

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Annex Table 4.15: Composition of Health Spending across Northern States, Average (Million SDG), 2000 – 2009

Items Current Development

Khartoum 72.2 24.4

North Kurdufan 19.4 16.3

Gezira 31.6 2.7

River Nile 13.3 2.0

Kassala 14.4 0.3

Read Sea 10.4 3.8

White Nile 13.7 0.4

Sinar 12.0 2.0

Gadarif 12.7 0.9

South Durfur 9.3 1.1

Blue Nile 6.1 4.3

Northern 7.7 2.0

North Darfur 8.0 0.6

South Kurdufan 7.5 0.1

West Darfur 4.6 0.3

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Annex 5: MDTF-N Sustainability Mission –Notes from Mission Discussions

Abyei Start-up/Emergency Project (ASEP)

Project rated as problem project for many reasons

o Very low capacity in the region o Management problems with PCU members not conversant with, or refusing to apply,

Bank procedures o Problem of procurement with PCU coordinator and the AAA (Abyei Area

Administration) always seeking to bypass procurement rules o PCU coordinator refused to renew mandate of procurement specialist in September 2010

(however international consultant who joined the PCU in September 2010, in principle to assist the procurement specialist, has taken over the procurement responsibilities and doing a credible job - only drawback is that no training or transfer of competence is taking place)

o Since the bulk of project activities consist in procuring goods, works, and services, the poor procurement performance has considerably affected disbursement and implementation progress.

Project became effective in October 2009 but only 24% of the grant of $6 million has been disbursed so far

Project supposed to close in June 2011 but mid-term review of November 2010 (due to late effectiveness) that several contracts are still pending or under evaluation. The PCU promised the mid-term review mission that contracts would be signed by end January 2011. This however has not occurred yet. One major contract for hospital rehabilitation has just been advertised.

The mid-term review mission agreed on a tight monitoring framework with the AAA involving regular review by various Administration officials from AAA

The Bank and AAA are to conduct a special review mission in March 2011 to follow up on progress and may consider restructuring the project if there is no significant progress.

Obviously a closing date extension will have to be considered and the end March 2011 mission will review the request for extension.

Issues that may affect sustainability (ASEP)

Very little demonstration of ownership of the Abyei project by the Ministry of Finance and

Economic Planning team in Khartoum. Also AAA seems to have its own ideas as to what the grant should be used for and hence has been interfering in procurement

The status of Abyei following the referendum in the South with the two main tribal groups with opposing preferences

When the project was designed there was peace and stability in the area, and the idea was to finance activities reflecting priorities in the area to support this stability. These priorities included water points, hafirs, and productive (agricultural) support for the communities and locality offices and vehicles for the Local Administrations. Currently the conflict level seems to be rising and hence may affect the ability of communities and the administration to properly follow up on these.

The Agriculture program consists of distribution of seeds, fertilizer, hand tools, and tractors. All these inputs are distributed free to individual households except for the tractors that are supposed to be managed by the Ministry of Agriculture of the AAA. There doesn’t appear to be any

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arrangements for ensuring that households will be able to acquire new inputs on their own for subsequent years. Even though FAO will oversee distribution it is not clear what they are doing in terms of follow up except for ideas to create cooperatives. Experience elsewhere with just creating cooperatives is not necessarily very successful.

Community management of water points seems to be progressing successfully While more returnees are coming back after the referendum, not much is being done to integrate

them into the system. One possibility being reviewed by the project is to use the $1 million unallocated funds to support agriculture activities for the returnees.

The project would rehabilitate a hospital for the AAA. It is expected that the Ministry of Health would be responsible for the management of the hospital. This however needs to be formalized by an MOU to ensure that after rehabilitation, the necessary operation and maintenance budget will be included in the AAA budget.

South Kordofan State Start-up Emergency Project (SKSSEP)

The project is closing with most components completed and fully disbursed except for the

capacity building component which is still active The other components included:

o Rehabilitation of a Vocational Training center – this involves improving of the building plus worker’s housing??

o Education sector support – included rehabilitation of existing schools, provision of benches and school supplies

o Agriculture sector (Rural Livelihoods) support – involved provision of hand tools, cattle and equipment for animal traction; and

o Rehabilitation of water points Government Counterpart funds financed

o Demining and rural roads o Health component – this component included bed nets; ambulances; x-ray machines;

fogging machines; and o 50 % of the capacity building component and PCU costs with the remaining 50%

financed by MDTF funds Under the Vocational Training Center (VTC), the project has been funding its operation so far by

funding some vocational training through the center - The center in principle covers training of auto-mechanics, plumbers, electricians, steel workers, and carpenters,

Issues that May Affect Sustainability (SKSSEP)

Project interventions were taken from the state and locality development plans and it appears that

state government is scaling up interventions from their own budget Students pay fees to be trained at the VTC but the amounts not enough to maintain or operate the

center The Unity Fund has been used so far for the maintenance of the VTC but this is running out State has seconded a full time director and a few staff and the Governor has promised to pay for

the running of the center after the project but there is nothing in writing Community management of water points is effective and o&m of these water points working

effectively Under the rural livelihoods component, this was done by creating Village Development

Committees (VDCs) that were trained. Each village community involved has a VDC that set up

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a revolving fund and each household who received tools plus animal traction set would pay a fee towards the purchase of new hand tools and animal traction set to go to others who have not yet received a set. It appears all the VDCs are operational but not clear how fast the scheme is expanding or whether there is provision for replacement for those who have already received their equipment.

Blue Nile State Start-up Emergency Project (BNSSEP)

Almost a mirror image of the SKSSEP. MDTF-N funded components include

o Rehabilitation of 200 water points o Rehabilitation of 30 existing schools which are being provided with improved sanitation

and water points o A rural livelihoods component – covering hand tools and animal traction equipment o Construction of a Center for Disease Control (CDC) o Capacity building (cofinanced with Government)

Government counterpart funds financed o Demining and rural roads o 50% of capacity building and PCU

Additional Financing has been approved to support a new Livelihoods component for Sudan Fisheries Association? – A Fisheries Service Center will be constructed for the Association; Members to be provided with Nets, boats, and fishing gear, training (including travel abroad) for fishermen. There will also be a scaling up of the initial rural livelihoods component with supply of improved seeds, hand tools, beekeeping for additional communities.

Issues that May Affect Sustainability (BNSSEP)

There is the need to clarify the ownership of the Fisheries Service Center. Currently it is supposed to be run by the Fisheries Association but supervised by the state Ministry of Agriculture. Similar clarification needed on equipment and fishing gear. Expectation is that these will be given as a grant to the Association who will have to operate, maintain, and sustain them.

Provision in the project for the CDC (construction just finished) was only for the construction with no equipment. The issue was raised with the state Government which has agreed to use the Unity Fund to purchase the necessary equipment. The state has also made commitment to provide for the running and maintenance of the Center. This has to be followed up.

All the necessary laboratory equipment has been delivered by the Unity Fund, but the CDC was constructed without provision for an incinerator; The Center does not have a stand-by generator either. Also the State Ministry of Health has envisaged a second floor for the Center but has no resources to complete the second floor.

It is not clear yet how the center will be managed. So far staff will be seconded from the Ministry of Health with their salaries covered as Ministry staff. Receipts from the center will most likely be reverted to the State Ministry of Finance and operating resources would come from the budget of the State Ministry of Health. While staff of the center are favorable to operating as a financially autonomous institution, the issue has not been discussed yet.

There is a provision to set up a Consultative Council to oversee the running of the Center but this has not yet been constituted

The livelihoods component is using the same formula of VDCs as in South Kordofan

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Issues associated with the Fisheries Center (which has not yet been built) will need clarification before the end of the project.

Microfinance Project (MP)

There has been considerable progress in terms of results over the last several months The microfinance sector regulatory framework, including a monitoring and evaluation tool, has

been completed and approved by the Board of the Central Bank (CBoS) in October 2010. The regulatory framework provides the basis for the supervision of the MFIs by the Microfinance Unit (MFU) of the CBoS. The framework is supposed to support a regulatory environment conducive to the creation of new microfinance institutions, and enhance access to microfinance in Sudan.

Microfinance Policy Document prepared for discussion in December covering: requirement for commercial banks to put 6% each of their portfolio for micro businesses and microfinance; increases in murabaha profit margins to encourage commercial banks to invest in MFIs

Contract with Frankfurt school extended by one year, through Additional Financing, to provide advisory services to the Sudan Microfinance Development Facility (SMDF) with the national staff of the latter responsible for management

SMDF staffing efforts have progressed and most Sudanese staff on board by end November 2010 though there has been staff turnover during the initial phase of the project

As of end February 2011, nine (9) MFIs have obtained their licenses from CBoS with 8 more in the pipeline. These eight are all expected to be registered as MFIs by the end of this year at the latest. The required capital for being registered as an MFI depends on whether it is to operate in the city (Khartoum), at state level or in a rural area.

According to the MFI regulation there are two types of MFIs – Deposit Taking (considered as banking institutions) and Non-Deposit Taking (considered as non-banking institutions). Requirements for registration are different between the two types of institutions

All the 9 MFIs registered so far are non-deposit taking. Though they are non-deposit taking they can accept savings (to a limited extent) from their members especially for lending.

In addition to the registered MFIs, there are about 33 commercial banks required to provide 6% of their portfolio to support microfinance

The MFU was set up in 2007 by the CBoS to regulate MFIs. However given that there was no source of funding for the MFIs, the CBoS provided a budget to MFU to provide funding for MFIs

At this point the main source of funding for MFIs (for on-lending) are the MFU and SMDF, the latter using part of the $20 million from the Microfinance project ($10 million MDTF and $10 million GONU counterpart funds)

Both MFU/SMDF do “wholesale banking” by providing funds on a 2 - 3 year basis to the MFIs. To be Sharia compliant they use the partnership approach (mainly Musharaka)

As of end October 2010, SMDF had approved loans of US$3.22 million and equity investments of US$820,000 with commitment of US$2.63 million for TA to the MFIs.

MFU outreach and program activities currently overlap with SMDF lending functions and will need to be redefined to be complementary with MFU focusing more on regulating the sector and helping SMDF in resource mobilization

The MFU’s program was based on a 5-year strategy ending in 2012, and its mandate is expected to be reviewed taking into account the role of SMDF

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Issues that may affect Sustainability (MP)

A financial sustainability plan for the SMDF was supposed to be developed by the FS taking into account SMDF allocation of its resources between TA and Loans on a 30%-70% ratio but this has apparently not proposed a viable solution to SMDF sustainability

Additional investment and capital necessary to support the growth of the MFI industry and where this will come from

Key challenge of financial sustainability is how to finance the operating expenses of SMDF – currently SMDF relies wholly on donor funding to finance operating costs as well as its three other activities of Loans, TA, and Equity

None of the MFIs is deposit-taking and hence their source of funding is mainly MFU/SMDF or the Governments – This means that unless they are able to generate sufficient profits from their lending activities they will be for the most part dependent on small savings from their members, financing from commercial banks (quite unlikely) or official sources (MFU/SMDF/Government advances?)

Initial salary scale and benefits proposed for SMDF staff was reduced by the SMDF Board and benefits eliminated. Impact of this on ability to attract and retain qualified staff

Under Islamic banking interest is prohibited and hence the MFIs and their financiers, to be Shariah compliant, have to use a number of options most of which is based on trust including

o Murabaha – where the financing agent acts as an intermediary to buy a property or good and sells this to the beneficiary at a higher price which depends on the value of the good and the time the beneficiary would take to pay.

o Musharaka – a form of active partnership between the financier and the borrower where losses are shared on the basis of how much capital has been contributed by each partner and profits are shared in any way the partners decide.

o Mudaraba – another form of partnership where normally the financial institution provides the funds and the borrower provides labor but both parties agree in advance the percentage profit to be received by the bank.

It is not clear how well the new nascent MFIs would understand and be able to apply these different elements of Islamic banking. Also given the relatively high cost of microfinance and risk of default, profits may not be high enough to share in the Musharaka and Mudaraba systems.

Given the current situation, where SMDF has no source of revenue of its own, it is certain that it cannot be sustainable on its own without Government or external financing for some time, until it starts getting back loans it has given out.

Improving Livestock Production and Marketing Project (ILPMP)

This pilot project targets pastoral communities in three states in the Eastern Sector (Blue Nile, Sinnar and White Nile States), each of the three states, having one targeted locality, namely Damazin, Abu Hujar and Al-Jabalain localities and one state The Western Sector is composed of three targeted localities, namely En Nuhood, Abu Zabad and Gebaish that are located in North Kordofan State.

The project is piloting an approach of a decentralized versus centralized structure for the delivery of technical and community-managed packages for access to water, animal production, veterinary services and promoting livestock marketing models.

The main development objective is to improve livestock production and marketing in the targeted localities, by providing access to reliable water sources, increasing market access and

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trade-related activities, strengthening and sustaining pastoral livelihoods, and introducing appropriate technologies to improve livestock productivity

The project has so far rehabilitated 24 water points (mainly boreholes) in livestock-dependent pastoral communities

Four livestock markets are either completed (N Kordofan) or nearing completion (Sinnar, Blue Nile and White Nile?)

24 Village Development Committees (VDCs) have been created and have been provided with training and capacity building packages for pastoral communities and private veterinarians to enable them access financial resources. The VDCs have been managing the water points successfully

At least 30% of the 72,000 beneficiaries so far have been women An additional financing of USD 2.51 million was approved on 30 August 2010 for scaling up

rehabilitation activities in the water points, and livestock markets and operations.

Issues that may affect Sustainability (ILPMP) institutional difficulties that affect coordination between different stakeholders, such as the

states, localities and targeted communities, and their understanding of their roles and what each has to contribute

State Government (Livestock Ministry) and locality understanding (or lack thereof) of the role of the private sector in livestock production and marketing

Water sub-projects appear to have gotten off to a good start with strong partnership between the VDCs and the State water corporation and therefore with a strong likelihood of sustainability. Though some women are represented on the committees, a stronger role for women in the management of the water points may further increase the likelihood of sustainability.

Environmental issues with Haffirs that serve as dinking ponds for animals and people and that may be a potential serious source of disease

Non -water projects such as restocking and fattening sub-projects, leather and hides, production of supplementary feeds and concentrates, etc. appear to be left to the initiative of the communities without much technical support

Microfinance component (set up through grants to VDCs), set up to finance non-water projects, that doesn’t appear to be well explained or understood at the field level. The component seems so far to be working on its own at the VDC level making its sustainability highly uncertain but linkages are being set up with some credit providers, as reflected in a memorandum of understanding with the Agricultural Bank of Sudan

For a number of the livestock markets, some localities have been reluctant to provide their counterpart (water points, fences), for the completion of the markets

There is no clear framework (financial, regulatory, or operational) for the functioning of the markets even though a market board, comprising representatives of locality, traders and livestock producers and the State, is supposed to be constituted for each state.

Role of private veterinarians vis-à-vis veterinarians from the Livestock Ministry in the livestock markets and how the services of private veterinarians will be reimbursed would need to be clarified.

The legal status and ownership of the rehabilitated markets have to be agreed to in consultation with the Federal Ministry, the States, the Localities and the Herders Association

An attempt should be made to make the Livestock markets self-sustaining as opposed to using them as a source of revenue for localities who may be unwilling to contribute to the O&M of the markets

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Demarcation of livestock routes with its resettlement action plan and implementation of the plan, including payment of compensation need to be finalized

Assignment of livestock agents from the State Ministries of Livestock to work with the Local Implementation Units to be able to provide follow-up services at least for some of the Water points and Haffirs, the Non-water projects, follow up and help demarcate, rehabilitate and maintain the livestock routes.

Follow up required on the study of factors contributing to conflict among pastoral, agro-pastoral and farming communities in order to find ways to eliminate or reduce such conflicts

Revitalizing the Sudan Gum Arabic Production and Marketing Project

The project aims to increase the production and income of small-scale gum producers and targets

11 localities in 5 selected States (North and South Kordofan, Sinnar, Blue and White Nile) of the gum belt.

Project, cofinanced by MDTF-N and IFAD, was designed to cover 2 phases. o Phase 1 from August 2009 to June 2011 would focus on analytical studies to bridge gaps

in sector knowledge in order to identify and facilitate implementation of sector reform measures. It would also provide training and capacity building efforts to implementing units and beneficiary Gum Arabic Producers Associations (GAPAs), set up an M&E system, including a baseline survey and establishment of Market Information System. During this first period the project will also initiate a saving and revolving credit scheme to GAPAs in target localities.

o Under Phase II (from July 2011 to June 2013), the project will monitor the sector reform process and support implementation of the sector studies recommendations to further deepen the sector rehabilitation efforts. It will also strengthen and expand the technical and financial support to GAPAs in all the eleven targeted Localities.

Policy reform measures implemented by the government through presidential directives issued in 2009 and 2010 are facilitating the liberalization of the gum Arabic trade. The directives have led to

o abolishing about 13 of the 18 taxes and fees that had been imposed on gum Arabic production and marketing,

o removal of the concession entrusted to Gum Arabic Council to have a monopoly on the trading and export of raw gum

o removal of the floor price policy on gum Arabic, o setting up an auction marketing system for gum

The reform measures are positively contributing to the revitalization of the gum Arabic sector leading to a noticeable improvement in the production and marketing of gum Arabic.

Average price received by the producer has reportedly increased from15% of FOB price to about 50% as a result of the reforms

The Saving and Revolving Credit scheme has started off well benefitting more than 8,600 producers organized in 110 GAPAs, of which women beneficiaries constitute between 19 -25%. The approach under this microfinance activity is group-based lending with full ownership and management of the funds at the GAPAs level. The program relied heavily on SMDF microfinance specialists to provide microfinance training and capacity building program.

The project has provided matching grants to different institutions for work on gum processing and utilization including. Ahfad University for Women, Forest Research Center, Sudan University of Science and technology, and Federal Union of Producers of Natural Gums.

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Issues that may affect Sustainability (Gum Arabic Project)

Ownership of the sweeping reforms in the gum Arabic sector. Vested interests especially those losing fees and taxes at the federal, state or locality levels may try to reverse them or reintroduce other fees and taxes.

There appears to be a lack of a single authority piloting the reforms. The PCU certainly lacks the authority to enforce the Government directives. The challenge for the project would therefore be to ensure that these policy reforms are fully understood and effectively implemented by the States. Currently two ministerial committees have been created to ensure that the 2009 liberalization decree be put into practice and to follow up on any barriers which may hinder the implementation of the liberalization policy

It is not clear what commitment there is at the State level to enforce the Presidential Directives especially on the removal of certain taxes and charges. Their non-enforcement and any further delays in their removal could have the potential to erode the implementation momentum and seriously compromise the success of the project

Possible conflicts of attribution between Federal and State Forestry Officials leading to poor support and advice for GAPAs

Marginalization of women from the revolving fund and other programs being introduced under the project in terms of improving productivity of trees and gum tapping.

Weak saving and revolving credit scheme that needs to be strengthened and in all cases possible linked with the emerging microfinance activities.

GAPA members and executives not very conversant with banking principles and hence likelihood that they may strictly apply Sharia principles (not necessarily concordant with Sharia banking guidelines) in giving out credit and thereby losing the initial capital provided by the credit. There should be intensified training of GAPAs on Islamic banking practices involving the in-kind payment and profit sharing that are high enough to make the program financially sustainable;

Project staff are currently discouraging the use of the revolving credit for activities that are not gum related. It would help if members are encouraged to use at least part of the revolving credit for other livelihood improvement activities (especially off season use)

Possible misunderstanding of project staff and Locality authorities of the use of the component on matching grants targeting GAPAs supposed to be used for GAPAs investments that would support the production and marketing of gum Arabic.

The rules and regulations as well as guidelines for putting in place a sustainable auction system are yet to be discussed and adopted

Community Development Fund (CDF) Project

The program started in 2006 with fast track rehabilitation first phase with activities covering 10

Localities. Currently the CDF covers the targeted 28 localities and 616 communities in four States (Blue Nile, Kassala, North and South Kordofan)

The program has initiated a number of partnerships such as the Ground Recovery Project for solar energy, the National Health Insurance for health centers, national/state Water Corporation for developing water points, etc.

CDF projects are normally in the most vulnerable communities Sub-projects supported by the CDF are normally part of the priorities of communities included in

their Community Action Plan. The CDF allocates around $100000 per community and can therefore cover only a few of their priorities.

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The basic principle appears to be more one of equity in post conflict situations and hence the CDF tries to cover more communities rather than meet all the demands presented by each community. This raises an issue of functionality of finished interventions.

The general principle is for communities to contribute in kind or in cash. The percentage contribution is fixed at 10% but in general average contribution is less.

The main activities developed under the program are schools (rehabilitated or new), basic health centers, community centers, solar energy, and water points

The schools varied in design from additional classrooms (typically 2) to eight classrooms with some of the schools supplied with toilet facilities, water and/or electricity.

Issues that May Affect Sustainability (CDF)

The fact that facilities are based on community priorities and involve community participation in

the construction, creates a strong ownership and commitment for such facilities that bodes well for continued attention and care of the community

Community involvement in all stages including identification of priorities, selection of sites, cash or in kind contribution, contracting, etc.

Substantial perceived economic benefits, especially for women, from the interventions in terms of reduction in time for water collection, reduced physical burden, enhanced education for girls, and improvement in health conditions and reduction in maternal deaths (also from DHSDP)

The training provided by the CDF staff on pre-steps and post-steps towards sustainability is very elaborate and explains very well the role of the communities in different activities including, planning, development of community action plans, project preparation and management, community contracting, sustainability of facilities, etc.

Whilst the State and Localities agree that it is their responsibility to provide staff, supplies (such as text books and medical supplies), and furniture for the facilities, and also to provide running costs for them, they often rely on communities to assume the running costs and provide incentives for teachers and health personnel. For communities that do not have a revenue-generating communal activity the level of resources available to provide for O&M of the rehabilitated facilities tends to be smaller than what they need.

The CDF program, since its second phase, has adopted the principle that no school or health center will be constructed unless it is signed off by the State Minister concerned. This is a good system that would assure that the schools be budgeted for by the State Ministries in terms of staff and supplies.

About 15 to 16 percent of the school and health center constructions have been reported by communities to have structural defects (roof leakages, cracks in walls, etc.) and need repairs

For schools constructed/rehabilitated there is considerable shortage of teachers required for the full functioning of the schools approaching 25% on average

Some of the Health Units and Medical Facilities suffer from general shortage of medical and paramedical personnel especially laboratory technicians

Functionality of some facilities such as schools, health facilities, and community centers may be affected by the monetary limits put on resources available under the CDF for each community. Thus sometimes schools are constructed without water or latrines or electricity, or health facilities built according to basic standard that may not fit the complete needs of a particular community.

Water supply to the constructed/rehabilitated schools is a major problem with about 62% of schools and 45% of health facilities lacking water. Similarly about 58% of schools and 41% of

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health facilities lack electrical connections. This lack of water and electricity has affected the functionality of some of these facilities.

Efforts involving construction of latrines in schools and health units have been defeated by the lack of water rendering them unusable

Some of the water storage tanks for some water points are constructed of corrosive material and may pose a health hazard for humans and animals. Also in some water points and Haffirs the same storage tanks and/or basins are used by humans and cattle, creating potential health hazard

A survey conducted in the three states of Blue Nile, South Kordofan, and Kassala in January 2011 estimated that 57% of schools, 45% of health units, 48% of water points and 63% of solar panels are already in need of maintenance. The survey also indicated that there is some confusion over roles and responsibilities for maintenance

An issue needing discussion (under any replication scenario) is the issue of equity in post-conflict situation versus functionality and future sustainability? This involves limiting resources available for an intervention versus ensuring that the facility may become fully functional (e.g. Basic Health Unit where doctors will not operate versus a more expanded facility in certain locations where doctors can intervene e.g. health center in village near Damazin where partnership with Health Insurance), or

Fostering and strengthening of partnership with UNICEF and NGOs that are active in many Northern states to complete CDF type interventions and make them fully operational

Community centers constructed and equipped with TV and satellite dishes have helped in strengthening social relationships at community level

Linking provision of social infrastructure and services to livelihood or income generating activities would have been essential in helping ensure maintenance and sustainability of the services.

Basic Education Project (BEP) The BEP aims at increasing access to improved basic education in four states (Blue Nile, Red

Sea, North and South Kordofan) The BEP would construct 30 schools across the four states. It would rehabilitate two Teacher

Training Institutes (TTIs) and build two new ones so that each of the four states would have a TTI to improve teacher training.

The schools constructed under the BEP are typically much larger than the CDF constructed schools. The physical upgrading of the facilities plus construction and upgrading teacher housing facilities are expected to impact positively on retention rates in the medium and long term.

A large number of the new schools are constructed using criteria to select areas that will enhance girls’ education

The schools are driven by the Ministries of Education and in some cases are constructed on sites where there were no schools

Each school typically includes classrooms, toilets, fences, offices, and dormitories for teachers. A number of them however do not have water or electricity

Progress towards project outputs and outcomes in terms of school enrollment for boys and girls appear satisfactory especially in terms of girls (over 6% above baseline). As of the project mid-term, the project had achieved over 62% of the target number of teachers to be trained in Arabic, English, Mathematics and the core program.

The project has used the Community Development Fund (CDF) on procurement and contract supervision issues related to civil works contracts under the BEP in the Blue Nile, North and

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South Kordofan. This led to some delays in the construction of three of the four teacher training institutes (TTIs) because of the inability of the CDF and an independent consultant to provide good quality schematic designs for the TTIs

Issues that May Affect Sustainability (BEP) The quality of school construction and experience of CDF site supervisors and locality engineers

who have supervised school construction in the three states of Blue Nile, North and South Kordofan have been a concern. In some of the schools there have been deviations from the technical specifications contained in the bidding documents; poor quality of bricks; and a general lack of site supervision

The general understanding (though not written) has been that MDTF would put up the buildings (classrooms, offices, dormitories, toilet facilities) and State Governments and Localities would provide the rest (furniture, teachers, textbooks, water?, electricity, etc.). In most cases also communities have been expected to clear the debris after the contractor. All these have turned out to be a problem.

The project team proposes to look at these issues on a school by school basis, and would recommend using savings from the project restructuring to fill some of the gaps.

In some States, the Ministry of Education would request UNICEF to provide the chairs and tables for the classrooms and also in some cases funds from UNICEF would provide water plus possible solar panels for electricity.

There is a general issue of availability of trained teachers that does not allow the state governments to fulfill their commitment toward the provision of staff

While some states have provided teachers with a cash allowance as an incentive to work in remote areas, some MDTF-N projects have built teacher dormitories to attract teachers to remote areas; the general issue of incentives for teachers need to be assessed whether these are for schools under the BEP, CDF or in general.

The Project did not formally include counterpart funds from Government but Governors of the four states verbally committed to support the PIUs. While some of these commitments have been met, a few issues remain.

Running costs (maintenance, incentives for teachers, utilities, etc) for schools are expected to be covered by localities but in the majority of cases these are passed on to communities, who invariably are unable to cover all the costs involved.

There are no commitments in writing from any of the four States or from the Federal Ministry of Education to provide resources for the Operating and Maintenance of the TTIs when finished. The existing ones have in the past faced funding difficulties.

Decentralized Health System Development Project (DHSDP)

The project’s first objective was to improve access to basic health services for conflict-affected and underserved populations in the four target states through the following interventions:

o support for village midwives in selected localities o support for health facilities in these localities, including Basic Health Units (BHU) and

health centers (HC) providing primary health care services o support for Rural Hospitals (RH) providing emergency and other obstetrical care o support for the state-wide expansion of maternal death reviews (MDR)

The second objective was to establish the basis for reform, sustainable financing, and development of the decentralized health system

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The project covers about 21 selected localities in the four target states of South Kordofan (10), Blue Nile (3), Kassala (5), and Red Sea (3)

In terms of outcome indicators, localities continue to show wide variations in their performance with all three of Blue Nile's localities in the top 10, South Kordofan and Kassala having the greatest variation among localities, and Red Sea with two of the three worst performing localities.

The main outcome indicators being used to measure performance are: o the number of outpatient consultations per person per year; o the percentage of pregnant women attending at least one antenatal visit; o % of total births assisted by skilled health staff; o % of households who possess at least one insecticide treated mosquito net;

the distribution of 180,000 ITN was completed during the initial financing All construction/rehabilitation of health facilities under the initial financing has been completed

and handed over. Contracts for civil works under the additional financing have been signed, and works have

commenced for three of the four midwifery schools and for the rehabilitation of surgical units and maternity wards in six rural hospitals. Contracts for procuring emergency obstetric medical equipment for seven rural hospitals have been signed and initial payments made, and delivery is expected by 31 May 2011

Issues that May Affect Sustainability (DHSDP) Performance-based contracts have been put in place financed by the project with no provision

that these would continue at the end of MDTF financing As of December 2010, 482 village midwives have signed contracts and received payments but

there are still differing interpretations of the performance agreement among the states making it unlikely that these would continue later and if they do whether the contracts would operate in the same way in the different states.

Apparently 9 rural hospitals have also signed contracts and payments made to them in all states, but based on the results recorded and the amounts paid, the payment schedule established in the performance agreement is not attractive enough for the hospitals, and their participation is only partial.

Difficulties in managing performance agreements with PHCs (Health Centers and Basic Health Units) have led to these agreements being abandoned.

Running costs of the State training academies and midwifery schools; drugs & consumables; supervision costs are being funded by the project and their operations may be seriously affected at project end if efforts are not made immediately to transfer these costs to the Federal or State Ministries of Health

Most facilities are understaffed with limited equipment Government counterpart funding suppressed under additional financing because Government

was not paying. This does not augur well for post project.

Public Sector Reform, Decentralization, and Capacity Building Project (PSCAP) 11

11 The notes here were based on the Aide-Memoire of the last implementation support mission (March 5-12, 2011) and the Project Paper for the Restructuring of the Project prepared as part of the above mission.

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The project’s objective is to improve the capacity at the federal, state, and local levels to deliver decentralized services to the citizens of Sudan through the following interventions

Support for restructuring and realigning ministries and upgrading of human resource management processes

Support for the effective implementation of fiscal decentralization and improvement of fiduciary systems

Building the capacity of national public sector and economic management training institutions Implementation progress had been slow from the start of the project until recently when activities

seem to have picked up As of mid-March under component 1: (a) a new HR policy has been drafted; (b) HR procedures,

methods and tools have been developed; and (c) about 30% of the targeted HR records have been computerized

Under Component 2: (a) new fiscal formula has been developed and a new fiscal transfer formula adopted; (b) procurement procedures, methods and tools have been developed and procurement legislation adopted; (c) a draft financial management manual on procedures, methods has been finalized; (d) 50% of the senior staff of Fiscal and Financial Allocation and Monitoring Commission (FFAMC) were trained in intergovernmental fiscal relations, fiscal formulae and monitoring and evaluation; (g) 40% of senior procurement department staff at the MoFNE have been trained in procurement management, the new regulation and M&E; and (h) 40% of senior staff at MoFNE were trained in financial management

Under Component 3: (a) two (2) of three (3) targeted training plans have been established; (b) 65% of annual training plans are delivered by relevant training institutes (Management Development Center, MDC and Sudan Academy of Administrative Sciences, SAAS); and (c) 50% of state and local government officials and technical managerial staff in targeted Ministries, Departments and Agencies (MDAs) were trained according to capacity building strategy

Project was restructured to: revise and re-prioritize activities; re-allocate grant proceeds across components based on the re-prioritization; revise the results framework and monitoring indicators;

The latest mission agreed with the Government on the need for an extension of the closing date from June 30, 2011 to June 30, 2012

Issues that May Affect Sustainability (PSCAP) The revised allocation of project funding (as included in Table 1 of Project Restructuring Paper)

reduces the allocation of Component 3 which is supposed to build the capacity of national public sector and economic management training institutions from $1.38 million to $0.4 million, more than 70% and doubles the allocation of project management from $0.82 million to $1.59 million. This would definitely affect the number of officials that can benefit from the capacity building

Looks like the majority of the activities of component 1 are not really meant for supporting restructuring and realigning ministries but rather for upgrading human resource management. While the latter is a worthwhile objective, the component would not necessarily do all it says it is doing under the initial project objectives. It is not clear how the current activities will achieve the objective of the component which is: to build capacity of the public sector at the federal and state levels, and to realign the mission and role of central government ministries and states to the context of decentralization.

A number of indicators have been dropped in the process of restructuring. While this simplifies the Logical Framework of the project, the new indicators appear to be more process oriented and will not guarantee implementation of procedures and policies being prepared under the project.

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As an example an Indicator on Percentage of budget actually transferred to sub-national level is dropped in favor of New Fiscal Formula developed.

For the activities to be sustainable, including implementation of new HR policies and Fiscal formulae, there needs to be provisions for follow up. As of now, it is not clear what arrangements (financially or administratively) are there for follow up except that the project proposes to commission a study during the final stages of implementation, to see what lessons can be learned from the PIU, and how these might be drawn upon to set up focal points for reform in MoL (and possibly MoHRD).

o While the project includes upgrading human resource management in the Ministry of Labor, strengthening the national Civil Service Council, computerization of civil service records in five targeted states and capacity building programs delivered by the Ministry of Human Resource Development in the five states, it is not clear what impact the project would have realigning the mission and role of these different states to the context of decentralization. The original project development objectives and component descriptions are probably too ambitious and probably should have been modified as part of the restructuring since these give the impression that the project is doing more than it can reasonably do.