REPUBLIQUE OF SUDAN CAPACITY BUILDING FOR POVERTY ... · Box 2: Main Constraints in preparing the draft North I-PESP 5 Box 3:MDTF-S Financed Capacity Building related projects/programs

SCCD: G. G.

AFRICAN DEVELOPMENT FUND Language: English Original: English imited

REPUBLIQUE OF SUDAN

CAPACITY BUILDING FOR POVERTY REDUCTION AND GOOD GOVERNANCE

APPRAISAL REPORT

OSGE GOVERNANCE, ECONOMIC AND FINANCIAL MANAGEMENT DEPARTMENT NOVEMBER 2006

TABLE OF CONTENTS PROJECT INFORMATION SHEET, BASIC DATA SHEET, LIST OF ABBREVIATIONS, FISCAL YEARS & CURRENCY EQUIVALENTS, EXECUTIVE SUMMARY i-ix I. PROJECT ORIGIN AND BACKGROUND 1 II. POVERTY AND GROWTH IN SUDAN 1 2.1 Overview of the administrative organization and political situation in Sudan 1 2.2 Macroeconomic and Structural Reforms 2 2.3 Poverty Profile in Sudan 3 2.4 The Poverty Eradication Strategy Paper Preparation Process 5 2.5 Donor Support 6 2.6 ADF Initiatives 7 III. THE INSTITUTIONAL CAPACITY IN SUDAN 8 3.1 The Ministry of Finace & National Economy in the North 8 3.2 The Social Sector Line Ministries in the North 9 3.3 The State Governments & Institutions in the North 9 3.4 Public Institutions in Southern Sudan 9 3.5 The Multi-Donor Trust Fund 11 3.6 Other Social Protection Institutions 12 3.7 Main Constraints to Capacity Building in Sudan 12 IV THE PROJECT 13 4.1 Project Rationale and Design 13 4.2 Project Beneficiaries 14 4.3 Strategic Context 14 4.4 Project Objectives 15 4.5 Project Description 15 4.6 Detailed Description of the Project 16 4.7 Environmental Impact 22 4.8 Project Costs 23 4.9 Sources of Financing and Expenditure Schedule 24 V. PROJECT IMPLEMENTATION 25 5.1 Executing Agency 25 5.2 Institutional Arrangements 26 5.3 Implementation and Supervision Schedule 27 5.4 Procurement of Works, Goods and Services 27 5.5 Disbursements 31 5.6 Monitoring and Evaluation 31 5.7 Financial Reporting and Auditing 31 5.8 Aid Co-ordination 31 VI. SUSTAINABILITY AND RISKS 32 6.1 Recurrent Expenditure and Costs 32 6.2 Sustainability of Project Impact 32 6.3 Major Risks & Mitigating Measures 32 VII. PROJECT BENEFITS AND SOCIAL IMPACT 33 VIII. CONCLUSIONS AND RECOMMENDATIONS 34 8.1 Conclusions 34 8.2 Recommendations 34

LIST OF TABLES

Pages Table/Box Box 1: Poverty Data of Southern Sudan 3 Box 2: Main Constraints in preparing the draft North I-PESP 5 Box 3:MDTF-S Financed Capacity Building related projects/programs as October 2006 6 Box 4: Anti-Corruption Measure during Project Implementation 33 4.1 Project Outputs per Component 15 4.2 Summary of Project Cost by Component 23 4.3 Summary of Project Cost by Category of Expenditure 24 4.4 Project Cost by Source of Finance 24 4.5 Financing Plan by Category of Expenditure 24 4.6 Financing Plan by Region 24 4.7 Expenditure Schedule by Component 25 4.8 Expenditure Schedule by Category and Source of Finance 25 4.9. Expenditure Schedule by Category of Expenditure 25 5.1 Procurement Arrangement of Goods and Services 28 5.2 Other Modes of Procurement 29

LIST OF ANNEXES Number of pages

1. Map of Project Areas 1 2. Project Organisational Charts (North and South) 2 3. Project Implementation Schedule 1 4. List of activities funded by the MDTF in North and South 1 5. Main areas of donors' intervention 1 6. List of the main donors of the MDTF 1 7. List of Goods and Services 1 8. Costs Summary 2 9. Project Processing Schedule 1 10. List of Bank Group Operations 1 This report was prepared by Mr A. Nzapayeke, Socio-Economist, OSGE.1, Mr. S. N'Guessan, Procurement Specialist, OSGE.1 and a consultant architect, following an Appraisal mission to Sudan in July 2006 and a Dialogue mission in November 2006. Inquiries should be addressed to Mr G. Negatu, Ag. Manager, OSGE.1 (Extension 3044) or Mr. I. L. Ndoumbe, Ag. Director, OSGE (Extension 2163)

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Year Sudan AfricaDevelo-

pingCountries

Develo-ped

CountriesBasic Indicators Area ( '000 Km²) 2 506 30 307 80 976 54 658Total Population (millions) 2006 37.0 924.3 5 253.5 1 211.3Urban Population (% of Total) 2006 39.0 38.4 43.1 78.0Population Density (per Km²) 2006 14.8 30.5 60.6 22.9GNI per Capita (US $) 2005 640 955 1 154 26 214Labor Force Participation - Total (%) 2005 39.2 42.3 45.6 54.6Labor Force Participation - Female (%) 2005 30.7 41.1 39.7 44.9Gender -Related Development Index Value 2004 0.492 0.475 0.694 0.911Human Develop. Index (Rank among 174 countries) 2004 141 n.a. n.a. n.a.Human Poverty Index (HPI-1-Value) 2004 31.3 45.0 32.0 20.0

Demographic IndicatorsPopulation Growth Rate - Total (%) 2006 2.1 2.1 1.4 0.3Population Growth Rate - Urban (%) 2006 4.6 3.5 2.6 0.5Population < 15 years (%) 2006 38.9 41.3 32.4 18.0Population >= 65 years (%) 2006 3.7 3.4 5.5 15.3Dependency Ratio (%) 2006 74.2 80.8 57.8 47.8Sex Ratio (per 100 female) 2006 101.4 99.9 102.7 94.2Female Population 15-49 years (% of total population) 2006 27.6 26.8 27.1 25.0Life Expectancy at Birth - Total (years) 2006 56.8 51.4 64.1 76.0Life Expectancy at Birth - Female (years) 2006 58.1 52.2 65.9 79.7Crude Birth Rate (per 1,000) 2006 31.1 36.5 22.8 11.0Crude Death Rate (per 1,000) 2006 11.0 14.9 8.7 10.4Infant Mortality Rate (per 1,000) 2006 66.4 82.5 59.4 7.5Child Mortality Rate (per 1,000) 2006 109.4 137.7 89.3 9.4Total Fertility Rate (per woman) 2006 4.0 4.7 2.8 1.6Maternal Mortality Rate (per 100,000) 2000 509.0 0.0 440 13Women Using Contraception (%) 2000 21.0 26.6 59.0 74.0

Health & Nutrition IndicatorsPhysicians (per 100,000 people) 2005 22.1 38.2 78.0 287.0Nurses (per 100,000 people) 2005 49.5 110.7 98.0 782.0Births attended by Trained Health Personnel (%) 2004 57.0 0.0 56.0 99.0Access to Safe Water (% of Population) 2004 70.0 62.3 78.0 100.0Access to Health Services (% of Population)* 2000 70.0 61.7 80.0 100.0Access to Sanitation (% of Population) 2002 34.0 44.2 52.0 100.0Percent. of Adults (aged 15-49) Living with HIV/AIDS 2005 1.5 4.5 1.3 0.3Incidence of Tuberculosis (per 100,000) 2004 220.0 310.2 144.0 11.0Child Immunization Against Tuberculosis (%) 2005 57.0 78.1 82.0 93.0Child Immunization Against Measles (%) 2005 60.0 68.0 73.0 90.0Underweight Children (% of children under 5 years) 2003 27.0 39.0 31.0 …Daily Calorie Supply per Capita 2004 2 311 2 435 2 675 3 285Public Expenditure on Health (as % of GDP) 2003 1.3 5.6 1.8 6.3

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2004/05 60.0 96.7 91.0 102.3 Primary School - Female 2004/05 56.0 90.4 105.0 102.0 Secondary School - Total 2004/05 33.0 43.1 88.0 99.5 Secondary School - Female 2004/05 32.0 36.5 45.8 100.8Primary School Female Teaching Staff (% of Total) 2003/04 66.1 47.5 51.0 82.0Adult Illiteracy Rate - Total (%) 2006 39.1 43.3 26.6 1.2Adult Illiteracy Rate - Male (%) 2006 28.9 34.5 19.0 0.8Adult Illiteracy Rate - Female (%) 2006 48.2 52.4 34.2 1.6Percentage of GDP Spent on Education 2005 1.7 4.7 3.9 5.9

Environmental IndicatorsLand Use (Arable Land as % of Total Land Area) 2005 7.0 6.0 9.9 11.6Annual Rate of Deforestation (%) 2000 1.4 0.7 0.40 -0.20Annual Rate of Reforestation (%) 2000 6.0 10.9 … …Per Capita CO2 Emissions (metric tons) 2005 0.2 1.0 1.9 12.3

Source : ADB Statistics Division Databases; World Bank Live Database; UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports

Note : n.a. : Not Applicable ; … : Data Not Available; * : latest data available within 1995-2000

COMPARATIVE SOCIO-ECONOMIC INDICATORSSudan

January 2007

Infant Mortality Rate ( Per 1000 )

0102030405060708090

100

2001

2002

2003

2004

2005

2006

Sudan Africa

GNI per capita US $

0200400600800

10001200

2000

2001

2002

2003

2004

2005

Sudan Africa

Population Growth Rate (%)

1.6

1.7

1.8

1.9

2.0

2.1

2.2

2.3

2001

2002

2003

2004

2005

2006

Sudan Africa

Life Expectancy at Birth (years)

111213141516171

2001

2002

2003

2004

2005

2006

Sudan Africa

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AFRICAN DEVELOPMENT FUND

01 BP 1387, ABIDJAN 01 Temporary Relocation Agency, Tunis, Tunisia Tel: +225 20 20 44 44 Tel: +216 71 33 35 11 Fax: +225 20 21 77 53 Fax: + 216 71 35 19 33

PROJECT INFORMATION SHEET

Date: January 2006

The information given hereunder is intended to provide some guidance to prospective suppliers, contractors, and all persons interested in the procurement of goods and services for projects approved by the Boards of Directors of the Bank Group. More detailed information and guidance should be obtained from the two Executing Agencies of the Beneficiary. 1. COUNTRY Republic of Sudan 2. NAME OF PROJECT Capacity Building for Poverty Reduction and Good Governance Project 3. BENEFICIARY Government of Sudan 4. LOCATION The whole country 5. EXECUTING AGENCIES Ministry of Finance and National Economy

(Khartoum: Lead Agency)/Ministry of Labour, Public Service and Human Resource Development (Juba)

6. DESCRIPTION OF THE PROJECT The grant will be used to support a capacity building project, which will include the following three components:

• I. Support to the preparation of the Poverty Eradication Strategy Paper (PESP) • II. Strengthening of the human and institutional capacity of GoSS

• III. Project Management

7.. TOTAL COST UA 10.69 million 8. SOURCE OF GRANT ADF 9. AMOUNT OF GRANT UA 9.62 million 10. OTHER SOURCES OF FINANCE Government of Sudan: UA 1.07 million

(GoNU: UA 0.35 million; GoSS: UA 0.72 million) 11. APPROVAL DATE February 2007 12. ESTIMATED STARTING DATE & DURATION April 07, duration 3 years

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13. PROCUREMENT Procurement of goods and services will be undertaken in accordance with the following Bank rules of procedure: National Competitive Bidding (NCB): Construction of a training center in Juba and rehabilitation of office facilities for the PESP task force in the South, and the two PMUs in the North and South. Office and training equipment, vehicles and furniture for the Undersecretaries, the Commissions, the States and the training facility of MoLPSHRD in the South. National Shopping (NS): Office and training equipment, vehicles and furniture for the two PESP units and PMUs in North and South;. Short list (SL): technical assistance, short term consultancy services for design and supervision of construction/ rehabilitation; audit, external evaluation, elaboration of the Operations Manual, preparation of the 2 regional I-PESPs, support to the PESP units and PMUs, and annual in-country training programs. Direct Negotiation: (i) base-line household survey in North and South (CBS and SSCCSE), and (ii) UNDP support to ten(10) states in Southern Sudan.

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CURRENCY EQUIVALENTS (November 2006)

UA 1 = SDD 321.837 UA 1 = USD 1.48386 UA 1 = EUR 1.16226

FISCAL YEAR

1 January - 31 December

MEASURES Metric systems

LIST OF ABBREVIATIONS AND ACRONYMS ADB ADF BOS BWIs CBOs CBS CBTF CCG CNS D-JAM DPA DSDS EU GDP GoNU GoS GoSS HC HDR HIPC IDP IGAD ILO IMF I-PESP I-PRSP JAM MICS MOE MOH MOHA MOFNE MOFEP MOLPSHRD

African Development Bank African Development Fund Bank of Sudan Bretton Woods Institutions Community Based Organisations Central Bureau of Statistics Capacity Building Trust Fund Co-Coordination Group Comprehensive National Strategy Darfur Joint Assessment Mission Darfur Peace Agreement Directorate of Social and Demographic Surveys The European Union Gross Domestic Product Government of National Unity Government of Sudan Government of Southern Sudan Higher Council Human Development Report Heavily Indebted Poor Countries (Initiative) Internally Displaced Persons Intergovernmental Authority on Development The International Labour Organisation The International Monetary Fund Interim Poverty Eradication Strategy Paper Interim Poverty Reduction Strategy Paper Joint Assessment Mission Multiple Indicators Cluster Survey Ministry of Education Ministry of Health Ministry of Humanitarian Affairs Ministry of Finance and National Economy Ministry of Finance and Economic Planning Ministry of Labour, Public Service and Human Resources Development

MOWSD MOU N-JAM NSCSE NGOs NFSS OCHA OLS PESP PID PIS PIU PMU PRSP SC SDD SDF SHDP SLM/A SMES SP SPLM/A SSCCSE UNDP UNFPA UNICEF USAID UNIFEM UNHRC WB WFP WHO

Ministry of Welfare and Social Development Memorandum of Understanding National Joint Assessment Mission New Sudan Centre for Statistics and Evaluation Non-Governmental Organisations National Fund for States Support Humanitarian Coordination Unit Operation Life Line Sudan Poverty Eradication Strategy Paper Project Implementation Document Procurement Information System Poverty Implementation Unit Project Management Unit Poverty Reduction Strategy Paper Steering Committee Sudanese Dinar Social Development Foundation Sustainable Human Development Project Sudanese Liberation Movement/Army Small and Medium Sized Enterprises Sudanese Pound The Sudan People's Liberation Movement/Army Southern Sudan Center for Census, Statistics and Evaluation United Nations Development Program United Nations Fund for Population Activities United Nations Children's Fund United States Agency for International Development United Nations Development Fund for Women UN High Commission for Refugees World Bank World Food Programme World Health Organisation

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EXECUTIVE SUMMARY 1. Project Background 1.1. Geographically, Sudan is the largest country in Africa, with a total land area of 2.5 million km², and a population estimated, in 2001, at 32.9 million inhabitants. For more than two decades, Sudan was engulfed in a civil war. In January 2005, a Comprehensive Peace Agreement (CPA) was signed between the Government of Sudan (GoS) and the Sudan People's Liberation Movement (SPLM), resulting in a Government of National Unity (GoNU). Consequently, extended Autonomy has been granted to Southern Sudan under the authority of the Government of Southern Sudan (GoSS). 1.2. Since signature of the CPA, the country has been going through a transition from civil war to peace and reconstruction. The National Joint Assessment Mission (N-JAM) set up following the CPA with the support of the donor community provided a framework for reconstruction. However, the weak capacity of government institutions in the North and the South, the negative effects of the prolonged civil war on the economy, and the brain drain of qualified professionals, have reduced the ability to formulate and implement macro-economic reforms and poverty eradication policies and deliver services effectively and efficiently to the population. Sudan is classified as a medium-income and a medium human development country, ranking 141 out of 177 countries in the Human Development Index, 2005. However, the poverty rate is estimated at above 60%, with considerable variations between and within states (90% in South). The main constraint to poverty analysis is the fact that data on poverty in Sudan are generally non-existent, outdated or partial. Indeed, because many regions were not accessible for surveys as a consequence of the war, official government data cover only the North and the main towns in the South. 1.3. In recognition of the weakness of its human and institutional capacities, the former GoS submitted a request for the assessment of the present project in 2004. The Bank followed this up with preparation and appraisal missions in June and August 2004, respectively. However, the project was not submitted for Board approval, owing to the prominence of the Darfur crisis and the lack of any peace resolutions at the time. Significantly, following signature of the CPA in 2005, and the Darfur Peace Agreement (DPA) in May 2006, between GoNU and the Sudan Liberation Movement (SLM) of Darfur, the Bank decided to update the Project appraisal report and to submit it to the Board. Therefore, a re-appraisal mission took place in July 2006 to integrate into the report fundamental changes which have taken place in Sudan's institutional environment since 2005. It should be noted that a new peace agreement, the Eastern Sudan Peace Agreement (ESPA) was signed recently in October 2006 between GoNU and the Eastern rebel movements. 1.4. The Bank Group has in the past financed an institutional support project, which targeted the Ministry of Finance and National Economy (MoFNE) and the Bank of Sudan (BoS). The objective of that project, which was completed in 1999, was to strengthen the Government's economic and financial management capabilities. One result of that project was Government's decision to launch the formulation process of a Poverty Reduction Eradication Paper (PESP). This process which is still ongoing will be supported under this project. The main lessons learned from the previous project are the necessity to use, whenever possible, local institutions for the implementation of development programs and to strengthen local capacity through training and technical assistance. These lessons are taken into consideration in the design of the project under consideration. 1.5. The proposed project will strengthen the position of the Bank Group in the ongoing policy dialogue with Sudan on arrears clearance and the country's reconstruction program.

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2. Sector Goal and Project Objectives The sector goal of the project is "to contribute to national efforts to eradicate poverty in Sudan". The project objective is to strengthen the capacity of key national institutions in North and South to implement macro-economic reforms and good governance practices for poverty eradication in Sudan. 3. Brief description of the project components The project's objectives will be achieved through the following three components

• I. Support to the preparation of the Poverty Eradication Strategy Paper (PESP)

• II. Strengthening of the human and institutional capacity of GoSS

• III. Project Management 4. Project Costs The total cost of the project is estimated at UA 10.69 million of which UA 9.09 million is foreign exchange (85.03% of project total cost) and UA 1.60 is in local currency (14.97% of project total cost). 5. Source of Financing The project will be financed by an African Development Fund (ADF) grant and by the government of Sudan, comprising GoNU and GoSS. The total ADF contribution, representing 90% (UA 9.62 million) of total costs, will be used to cover 100% of the foreign exchange costs and 33.13% of local currency. The Government of Sudan's contribution of UA 1.07 million, representing 10% of the total project costs, will cover some local costs of the two PMUs and some operating costs in the North and South as indicated in Tables 4.5, 4.6 and 4.7. 6. Project Implementation The project's duration is estimated at (three years) 36 months after entry into force of the grant agreement. In line with the CPA's "one-country-two-systems" institutional arrangement, two separate units will implement the project: one in the North and the other in the South, under the Executing Agencies - MOFNE in Khartoum and the Ministry of Labour, Public Service and Human Resource Development (MOLPSHRD) in Juba, respectively. MOFNE will be the lead Executing Agency. 7. Conclusions and Recommendations 7.1. The project is in conformity with the Bank's strategy as reflected in the Country Dialogue Paper approved by the Board in July 2006, which makes institutional support and capacity building key objectives of the Bank's support for Sudan in the coming years. It is also in compliance with the Bank approach for assistance to fragile states, underlining the necessity to take the context of a country as the starting point, and the focus on state-building, particularly responsiveness and accountability of state institutions to the population at large. The Project conforms to the Bank's Vision, which focuses among others on macro-economic reforms, good governance, and poverty eradication. Sudan's improved economic performance in recent years due to the increase of oil revenue has not yet had a positive effect on the living condition of the population. Among the main

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constraints impeding poverty reduction efforts by GoNU and GoSS, is the lack of capacity to make a clear diagnosis of the poverty situation in the country and to elaborate and implement a comprehensive strategy for poverty reduction with coherent action plans. This is particularly true for Southern Sudan, given the newness of its institutions. Through training, technical assistance and supply of equipment, the project will focus on building the capacity of institutions involved in macro-economic reforms, good governance and poverty reduction. It will thus contribute to increasing the country’s capacity to effectively mainstream poverty in the development strategy within a coherent macro-economic framework. 7.2. It is recommended that an ADF grant not exceeding UA 9.62 million be made available to the Government of Sudan, as outlined in this report, to strengthen the capacity of institutions involved in poverty reduction, macro-economic reforms and good governance.

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SUDAN CAPACITY BUILDING PROJECT

PROJECT MATRIX

HIERARCHY OF OBJECTIVES

EXPECTED RESULTS TARGET POPULATION

OBJECTIVELY VERIFIABLE INDICATORS

INDICATORS AND TIME-FRAME ASSUMPTIONS/ RISKS

SECTOR GOAL To contribute to national effort to eradicate poverty in Sudan

LONGER-TERM OUTCOMES Socio-economic status of the Sudanese population improved

Population of Sudan (33 million)

1) Proportion of people living below the poverty line) Sources : UNDP/UNICEF/WHO surveys ) National health and demographic statistics SSCCSE Project’s progress reports

1) Proportion of people living below the poverty line reduced by 15% by April 2010 (from 60% to 45%) 2) Proportion of people in Southern Sudan living below the poverty line reduced by 15% by April 2010 (from 90% to 75%)

PROJECT OBJECTIVE MEDIUM-TERM OUTCOMES

To strengthen the capacity of key national institutions in North and South to implement macro-economic reforms and good governance practices for poverty eradication in Sudan.

Delivery of peace dividends (access of the population to basic social services) and national productivity improved in North and South

Population of Sudan in North and South (33 million)

1) % of the training activities and study tours scheduled implemented 2)Level of resources allocated to macro-economic reforms and to the social sector 3) Level of absorption of resources allocated to macro-economic reforms and to the social sector Sources : Ministry of Labour, SSCCSE Project Progress Reports

1) 60% of the training activities and study tours scheduled implemented by Dec 2008 and 100% by Dec 2009 2) Resources allocated to macro-economic reforms and to the social sector for the period 2007-2010 increased by 10% in North and South by April 2010 3) 80% of the resources allocated to macro-economic reforms and to the social sector for the period 2007-2010 is absorbed by April 2009 and 100% by April 2010 by GoNU and GoSS.

- Peace is sustained - Increasing GoNU and GoSS’s support to human and institutional capacity building - Government's contribution from GoNU and GoSS is regularly paid. - Government committed to Arrears payment

ACTIVITIES / INPUTS SHORT-TERM OUTPUTS

1) Support to the national PESP process

I-PESPs ( South and North) merged into one consolidated national PESP

GoNU, GoSS/population of Sudan

1.1) Availability of updated Household data 1.2) Availability of I-PESPs for North and for South 1.3) Availability of a consolidated national PESP Sources : MoFEP/SSCCSE/Progress Reports

1.1) Reports of the quick household surveys in North and South are available by Dec 2007 2) The I-PESP Reports for North and South are available and validated by Dec 2008 3) The consolidated national PESP is validated and approved by Dec 2009.

- Government and donors commitment to support the PESP process is sustained

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2) Strengthening the capacity of the GoSS

2) Conceptual and operational capacity of ministries, states and Independent Commissions and Chambers to identify, prioritize, plan, implement, coordinate, monitor and evaluate national, sector and local development or business and strategic plans and activities improved.

GoNU and GoSS institutions, population of Sudan

2.1.) Number of staff trained 2.2.) % of the training activities implemented 2.3.) Number of undersecretaries trained still serving the GoSS 2.4) 2) % of female participants in training activities and study tours 2.5) % of ministries, states and Independent Commissions and Chambers which have completed their operational strategic and business plans. Sources : Ministry of Labour and Public Service Ministry of Finance/National Budget CBS/SSCCSE Project Progress Reports

2.1.) 23 undersecretaries, 20 staff of capacity building directorates and 18 staff of Independent Commissions and Chambers trained by Dec 2009 2.2.) 100% of the training activities scheduled are implemented by Dec 2009 2.3.) 90% of the staff trained by the project is still operational in the respective services by Dec 2009. 2.4) At least 30% of the participants in the training activities and study tours are women 2.5.) 100% of the ministries, states and Independent Commissions and Chambers which benefited from support from the project has developed business and strategic plans

- Government to meet all recurrent cost requirements - Capacity building and commitment for macro-economic reforms and good governance remain government's priority -National Counterparts are appointment and retained

3) Support to Project management. SOURCES OF FINANCE ADF Grant : UA 9.62 million Government : UA 1.07 million Total : UA 10.69 million

Fast track disbursement for the project/Efficiency of the implementation of project's activities

GoNU and GoSS institutions

3.1.) The TA recruited and operational

3.2.) Allocated budget and expenditure schedules

3.1) 100% TA recruited and operational by Dec 2007 3.2.) 34.9% of total budget expended in PY1; 46.7% in PY2 and 18.5% in PY3.

- PMUs staff recruited without delay - Government committed to Arrears payment

I. PROJECT ORIGIN AND BACKGROUND

1.1. In February 2004, the Government of Sudan (GoS) submitted a request to the Bank for support to strengthen the capacity of its public services. The request was motivated by the necessity to support peace efforts and lay the basis for post-conflict reconstruction. Progress were made in the peace negotiation with the Sudanese People's Liberation Movement (SPLM) and the Joint Assessment Mission led by the World Bank and the United Nations. The Bank then fielded a preparation mission to Sudan in June 2004, followed by an appraisal mission in August, in recognition of the signing of six significant peace protocols. However, due to the unrest in Darfur, which came under international attention, the project was not submitted to the Board. Since 2004, three different peace agreements have been signed and realization of the peace dividend in the transition period of six years (2005 - 2011) is paramount: the 2005 Comprehensive Peace Agreement (CPA) between the former GoS and the SPLM, and the 2006 Darfur Peace Agreement (DPA) between the Government of National Unity (GoNU) and the Sudanese Liberation Movement (SLM). Recently, on 14 October 2006, the Eastern Sudan Peace Agreement, was also signed between GoNU and the Eastern Movements. 1.2. The present project follows the Bank's first institutional support project completed in 1999 and which aimed at strengthening the capacity of the Ministry of Finance and National Economy (MOFNE) and of the Bank of Sudan (BoS). It will be implemented in a context where the need to consolidate and demonstrate peace, power and wealth sharing is high. Covering the entire country, the project intends mainly to provide support the process of finalising the national Poverty Eradication Strategy Paper (PESP), which has been declared a priority in the Poverty Eradication Concept Paper agreed upon in September 2004 by GoS and SPLM. It will also address needs in the areas of good governance and macro-economic reforms, with a focus on the strengthening of the government's human and institutional capacity to deliver peace dividends to the population. 1.3. As stipulated in the CPA, the GoNU in Khartoum and the Government of Southern Sudan (GoSS) in Juba were formally established under the "one-country-two-systems" arrangement following the signing of this agreement in January 2005. The project will be implemented in accordance with these new legal and institutional arrangements governing the country. This project's implementation approach complies with the Bank's approach for assistance to fragile states, which underlines the importance of the country's context as the starting point in project's design and implemention, and the focus on state-building, particularly to ensure responsiveness and accountability of state institutions to the population at large. 1.4. The Country Allocation for Sudan amounts to UA 48,1 million. However, in accordance with the ADF X Policy and the Bank's Country Dialogue Paper approved by the Board in July 2006, despite the country being under sanction, 20% of the total allocation can be used to support capacity building or institutional support projects. The ADF grant financing of the project (UA 9,62 million) is in compliance with this Bank policy and also in conformity with the Bank's Country Strategy, which singles out institutional support and capacity building as key objectives of the Bank's support for Sudan in the coming years. The project will help the country implement macro-economic reforms and serve as a tool to strengthen the dialogue on arrears, particularly through regular supervision missions and coordination with other development partners. It will also strengthen the position of the Bank Group in the ongoing policy dialogue with Sudan on arrears clearance and the country's reconstruction program. The project is in conformity with the OECD key principles for donor engagement in fragile states (see § 4.1.7.). II. POVERTY AND GROWTH IN SUDAN

2.1. Overview of Sudan's adminsitrative organization and political situation

2.1.1. With approximately 2,5 million square kilmometers, Sudan is the largest country in Africa, with a population estimated at 32.9 million in 2001. It borders nine countries and reflects the

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religious, ethnic and cultural diversity of the region. Arabic, the official language, is spoken by about 60% of the population. Sudan became a Federal State in 1992, when a three-tier system of government was created, structured in the National Government, 26 State Governments and 137 Localities. Administratively, sixteen states constitute the North, which includes the three Darfur states. The other 10 states constitute the South. Since 1955, a civil war has raged almost continually between the North and the South, with the exception of the period 1972 to 1983 when the Addis Ababa Peace Accord brought peace for 11 years. The civil war came to an end following the signing on 9 January 2005 in Kenya of the CPA between GoS and the SPLM1. The CPA granted extended autonomy to the South, under the leadership of the Government of Southern Sudan (GoSS), based in Juba. The GoSS currently administers the South with a five-tier government system, comprising in ascending order the following levels: (i) boma (village); (ii) payam (cluster of villages); (iii) county; (iv) states; and (v) the Government of Southern Sudan (GoSS). Transitional Institutional Arrangements in Sudan

2.1.2 Since signature of the CPA, an interim period of six years (2005-2011) has been agreed upon and a transitional constitution has been approved for the entire country. The former GoS is replaced by the Government of National Unity (GoNU) based in Khartoum and which includes representatives of the SPLM. Southern Sudan, which remains part of Sudan during the interim period, is governed by the autonomous GoSS. The President of Southern Sudan is also first Vice-President of the Republic of Sudan, and GoSS is entitled to a 50% share of the oil revenue. It is worth noting that GoSS can deal directly with international donors and financial institutions. After the interim period, a referendum on southern independence will be conducted in 2011 on whether the South remains part of a Federal Sudanese nation, or becomes fully independent. The CPA also gives a special status to Abyei, Southern Kordofan/Nuba Mountains and Southern Blue Nile, also called "The Three Areas". For these areas, special power and wealth sharing arrangements have been agreed upon, including the establishment of State Land Commissions, provisions on education and security, the right to solicit external resources, and popular consultation rights for the local population. Abyei has a unique administrative status with provision for a referendum on its final status within the North or the South. 2.1.3 After the CPA, the Darfur Peace Agreement (DPA) was also signed on 5 May 2006 in Abuja, between GoNU and the largest movement in Darfur, the SLM . Under the DPA, the three Darfur states remain part of the North, but will be administered by the Transitional Darfur Regional Authority (TDRA) until a referendum in 2010 which will decide whether to establish Darfur as a unitary region with a single regional government or remain as it is. Apart from the TRDA, other key institutions to be set up under the DPA are the Darfur Reconstruction and Development Fund (DRDF) and the Darfur-Darfur Dialogue and Consultation (DDDC), an advisory and facilitation mechanism through which representatives of all Darfurian stakeholders can meet to discuss challenges of restoring peace. A fragile peace holds in Darfur and the active support of the international community remains essential to ensure that the DPA is implemented2. 2.2 Macroeconomic Performance

The Country Dialogue Paper (CDP) indicates that despite the long lasting civil war, Sudan began implementing an economic reform program in the mid-1990s. The reforms focused on macroeconomic stabilization, economic liberalization, structural changes, and the strengthening of economic policy institutions. These reforms were carried out largely without international financial assistance. Sudan’s growth performance has been strong in recent years with real GDP growth at

1The peace talks leading to this agreement were sponsored by the international community under the auspices of the Inter-Governmental Authority on Development (IGAD) and the Government of Kenya. 2 In the eastern regions, the recent signing on October 14, 2006 of the Eastern Sudan Peace Agreement (ESPA) between GoNU and the Eastern Movements, represented by the Eastern Front (EF) is likely to be followed by special institutional arrangements.

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5.2% in 2004 and is estimated to reach 13.4 percent in 2006 mainly due to growth in the oil sector which has helped the trade balance and foreign investment of the country. The oil and petroleum products accounted for over 80% of the exports and 40% of public revenues in 2004. The production rose from around 315,000 bpd to 500,000 bpd in 2005. With exploration continuing at existing and new oil fields, the government hopes to raise production to around one million bpd by 2009. Assuming a consolidation of peace with the South and resolution of problems in Darfur, Sudan’s growth is likely to continue to be in the range of 7-8 percent per year in the medium term (2005-2008). On the structural reform front, substantial progress has been achieved with economic liberalization. Price controls were lifted, all economic activities were opened to the private sector, a liberal investment regime was established, and an ambitious privatization and public sector restructuring program is being pursued. Despite this favourable situation, the growth has not so far materially contributed to poverty eradication in Sudan. 2.3 Poverty Profile in Sudan

2.3.1 The price of conflict has been heavy, especially on civilians (about 2 million deaths, 4 million internally displaced persons, and 500,000 refugees). Data on the economy, poverty and development in Sudan are in general outdated, weak or partial. Improving the information and statistics base is one of the priorities of the country. 2.3.2 Due to the fact that many regions in Sudan were not accessible for surveys as a consequence of war, most of the official data cover only the North and the main towns in the South. According to UNDP, in 2005, Sudan ranked 141st out of 177 in the Human Development Index (HDI). The population of Sudan is young. Indeed, 38.9% is under the age of 15 and only 3.7% is over 60. The population density is 12 persons per square kilometer, and the average household size is 5.6. There is no reliable estimate of poverty in Sudan because no national household survey has been conducted since 1978. However, sub-national poverty surveys suggest that the poverty rate remains high. It exceeds 60% nationally, with tremendous regional disparities (90% for the South). 2.3.3 The urban population is estimated at 39%. Urban poverty is growing in parts of Khartoum and other provincial capitals since conflicts and climatic shocks have impoverished people and pushed rural internal displaced (IDPs) into urban areas. There is widespread belief that income distribution has worsened over the decades. According to the World Bank, the top 10 percent of the population acquired 51.6% of all earnings in 1990, and 64.3% in 1996. At the same time, the lowest-income group's share decreased from 28.3% to 21.9% in the same period, and this, despite the growth in the oil sector. 2.3.4 In the area of education, in 2005, only 1.6% of the GDP (equivalent to 5.16% of the total government expenditure) was allocated to education. Average enrolment rates in basic education was estimated in Sudan at 60% (female: 56%, male: 62.9%), with considerable variations among States with Northern States having the highest primary education enrolment rates (average 80%) while Southern Sudan States registered less than 20%, which is the lowest in the world. Only one out of every five children of school age is in class in Southern Sudan. The gender gap is high (there are three times more boys than girls in class), but there is evidence that in the North, it has been reversed in higher education. UNICEF and the Southern Sudan Center for Census, Statistics and Evaluation (SSCCSE) data also show that primary school completion rate in Southern Sudan is only

Box 1: Poverty data of Southern Sudan Southern Sudan covers an area of about 640,000 square kilometres with a population estimated at 7.5 million in 2003. This population is expected to grow by 4.5 million in the next six years as a result of returnees coming back (both refugees and internally displaced people) and the natural population growth (almost 3% a year). The population is among the youngest in the world, 21% are under fives. Southern Sudan has a high fertility rate (6.7) and a high crude birth rate (50.5 per 1,000 people). However, the proportion of adults in the population is low as a result of the civil war and famine. Southern Sudan has one of the least developed economies in the world. The proportion of the population earning less than one dollar a day is around 90% and the Gross National Income per capita is estimated to be less than USD 90 per year. Income is about four times lower than the level for the rest of Sudan. A household income survey limited to Yambio County in West Equatoria, shows that 93% of residents of Yambio survive on less than USD 1 per day.

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2% (female: 0.8% and male: 3%). This suggests that only one out of every 50 children finishes primary school in the South (Only 500 girls finish primary school each year while 2,000 boys finish). The adult literacy rate in Sudan was 48% for women compared to over 71% for men. The literacy rate is very low in Southern Sudan, which is second only to Niger in terms of adult literacy rate (24%), with an adult female illiteracy rate of 88% and a youth literacy rate estimated at 31%). The lack of improvement in basic schools enrolment in Sudan has been caused by the long lasting civil conflicts, high dropout rates, absorption by labour for boys, and early marriage for girls3. This situation is worsened in Southern Sudan by the quasi lack of school facilities. Only 1,600 schools exist for the 1.6 million children of school age, only 10% of the classrooms are in permanent buildings, 80% of the children have no bench to sit on and only one third of the schools have access to latrines and half have access to safe clean water. 2.3.5 In the area of health, only 1.3% of the GDP was allocated to the sector in 2003. Average under-five years mortality rate (125 per 1,000 live birth) remains high compared to an average rate of 116 in Sub-Saharan African countries, with considerable disparities between Northern and Southern Sudan States. The Southern Sudanese states are characterised by a high infant mortality rate of 150 per 1000 live births, under five mortality rate of 250 per 1000, and a high rate of under five deaths as a percentage of total deaths (57%). This would mean that one out of every four newborns will die before reaching the age of five. The maternal mortality rate (865 per every 100,000 births) and the risk of dying in pregnancy or childbirth in Southern Sudan are respectively almost three times and four times higher than that of the rest of Sudan. Major causes of mortality in Sudan are malaria, tuberculosis, meningitis, typhoid, and waterborne diseases. In spite of the deterioration of basic services in the country, available figures show that in the North, 70% of the population have access to health services (Africa average 61.7%) and 62% to sanitation. In Southern Sudan, the number of physicians per 100,000 people is estimated at 22, and less than 1. The percentage of pregnant women immunized against tetanus (16%) is the lowest in the world. The proportion of births attended by skilled health staff is estimated at 57%, and only 5% in the South4. The levels of access to an improved water source (27%) and sanitation facilities in Southern Sudan (16%) are respectively more than three and four times lower than the level of access in the rest of Sudan (70%). Domestic water supplies and sanitation are in a perilous situation, leading to a heightened risk of disease. Finally, HIV/AIDS prevalence estimated in Sudan at 1.6% in 2001 (Africa average 5.7%) is about 2.6% in Southern Sudan. It is believed that the infection will continue to spread as the large scale movements of population begin with IDPs returning home after the signing of the CPA and DPA. 2.3.6 With regard to gender, due to historical developments women in Sudan are far more impoverished than men. As in most war-affected areas women’s poverty in Southern Sudan is one of the worst in the world. Other problems arise from the fact that South Sudanese women outnumber men by two thirds, due to the war: women are in charge of the household economy, yet as elsewhere in Sudan, they face serious legal impediments, and inequalities of basic rights and social services as well as adequate representation in decision making. With war, women are severely handicapped by the break-down of social norms and law enforcement, which add to the problems all Sudanese women face.

3 The Education For All policy was embodied in an act entitled Comprehensive National Strategy for Education Sector (1992) which gave priority to the improvement of the enrollment rate. This policy was followed in 2001 by the General Education Planning and Organization Act which emphasizes on the rights of Sudanese children to education. According to the World Bank, the results of these policies have not been up to expectations. 4 A health policy for Southern Sudan came into effect in 1998 which focuses on decentralization of the health system, community mobilization and human resources development. However, the main constraints to health service delivery remain the lack of human and institutional capacity, of road infrastructure and the prevailing insecurity.

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2.4 Poverty Eradication Strategy Paper Preparation Process

2.4.1 To address poverty in Sudan, Government (GoS) decided to prepare a PESP which will provide the framework for poverty eradication. The preparation of this strategy started in the North in 1999 with the establishment of a Poverty Unit (PU) in the MoFNE in Khartoum. In 2000, a High Council (HC) chaired by the President of the Republic was established to supervise the preparation and implementation of a comprehensive program for poverty eradication. In 2002, a Supervisory Committee (SC) was set up under the chairmanship of the Minister of Finance to coordinate and supervise social development programmes. The SC comprises representatives of poverty related sector Ministries, NGOs, civil society and Trade Unions, etc. which constitutes with the PESP Unit the PESP Network. Despite the lack of updated data and resources, some activities have been carried out, including conceptualization and studies to establish the extent of poverty, its magnitude, and policies to reduce it. The process included a number of seminars, symposia, workshops and group discussions organized with participation of various stakeholders. States Technical Committees were invited to take an active role in the process. In 2004, a draft I-PESP covering partially the 16 Northern states had been completed. Darfur and the Three Areas were not properly covered in the paper, due to the continuous insecurity in these regions. 2.4.2. In September 2004, as part of the peace negotiation, GoS and SPLM agreed upon a Poverty Eradication Concept Note as a strategic framework for a common approach against poverty. Separate I-PESPs were envisaged for the North and the South, after which both documents would be merged into a national document. In December 2005 in the Framework of the new environment created by the CPA, the PESP Unit of the MoFNE in Khartoum elaborated a new plan to finalise the North I-PESP and to start the national PESP process covering the North and South. Both documents are expected to be merged into one national document by the end of 2008. 2.4.3 The current draft North I-PESP being partial will be updated and extended to cover all Northern States . In Southern Sudan, the I-PESP process has not yet started due to lack of capacity and to the embryonic character of the public administration. This delay in conceiving the Southern I-PESP is a major constraint for the finalisation of the national paper. GoSS is however committed to speeding up the process. It will build on the work (formulation of sector policies and strategies) currently being done by the ten Budget Sector Working Groups under the leadership of the MoFEP. 2.4.4 With regard to the weak capacity of the Sudanese national institutions and the lessons learned from the delays in the preparation of the Northern I-PESP, the finalisation of the PESP process requires the involvement of qualified experts both national and international, and resource persons from different specializations including data analysis and gender mainstreaming, to assist in the development and finalization of these documents. An intensive process of consultation and participation with all stakeholders needs to be developed and implemented to assist in reaching a national consensus on the PESP. To help the Authorities in North and South overcome the constraints, a core group of donors was formed in Khartoum in July 2006, including the ADB, DFID, UNDP, and World Bank, coordinated by UNDP. The aim of the group is to arrive at a cohesive donor support approach to the PESP process, particularly adopting an MDG-based PESP strategy and rapid finalization of the I-PESPs. GoNU is committed to move quickly to a national PESP. The finalisation of the full PESP is an essential element of the peace consolidation process.

Box 2: Main constraints in preparing the draft North I-PESP

An assessment of the constraints and progress made in the eight years process of preparing the North draft I-PESP was carried out by MoFNE in 2002. The main constraints identified were the following:

(1) Limited national coverage: the PESP consultation process was concentrated in the Northern States.

(2) The lack of adequate data and weak human and institutional capacities to enable carrying out an in-depth analysis of poverty that is required for the formulation of sound pro-poor policies. Update of data on poverty will be a priority and a key condition to move ahead with the PESP process. The last household budget survey was carried out in 1978.

(3) Various stakeholders (in Darfur and in the Three Areas) were not represented in the different consultations processes.

(4) Lack of technical and financial support from the international community.

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2.4.5 In the absence of a national PESP the "Framework for Sustained Peace, Development and Poverty Eradication" output of The National Joint Assessment Mission (N-JAM)5 serves as the transitional development strategy for Sudan in the interim period of six years and the framework for all donor interventions in the country. It did not provide assessment of the situation in Darfur6, but it placed focus on the poorest and most disavantaged parts of the country, in particular Southern Sudan and the Three Areas as priority for donor interventions. The N-JAM underlines the enormous differences between the challenges in the North and the South. While there is a need for major reform of existing systems and institutions in the North, in the South, institutions, key infrastructure and the architecture of a public service need to be entirely created. 2.5. Donor Support 2.5.1. According to the Country Dialogue Paper 2006, in the 1970s and early 1980s, Sudan was a major beneficiary of development assistance, which reached about USD 1.9 billion in 1985. Since the early 1990s when the country started accumulating arrears, many donors suspended their financial assistance. With donor assistance falling to about USD 50 million by the late 1990s, the international community radically shifted its support toward humanitarian objectives. In September 2001, the UN lifted the sanctions imposed on Sudan following the ratification by the country of relevant anti-terrorism conventions. At the same time intensification of diplomatic activity in the peace process was spearheaded by Norway, the US, and the United Kingdom. A preparatory donor process was carried out with the three countries, the Netherlands, the IFIs, the EU and other international actors to prepare for quick impact programs in support of the peace process and preparing the grounds for long term sustainable recovery, and post-conflict reconstruction. Through several international meetings, donor coordination and assistance was discussed and prepared. At the Sudan Donor's Conference in Oslo in April 2005, the international community pledged support in the order of 4,6 billion USD for 2005 -2007 on the basis of the framework defined by the JAM.

2.5.2. Based on the recommendations of the National JAM and following the donor conference in Oslo in April 2006, the Multi-Donor Trust Fund (MDTF) covering Northern and Southern Sudan was established. It is the most important post-conflict financial mechanism used by bilaterals, World Bank, Arab League and the European Commission to support the reconstruction efforts of Sudan. Nine donors (Netherlands, Norway, United Kingdom, EU, Sweden, Denmark, Finland, Iceland and Greece) joined later by Canada, Saudi Arabia, France, Egypt, the Arab League to enable key programs to be launched through pooled trust funds. GoNU and GoSS requested that the World Bank be the Fund Administrator. Therefore, the MDTF has two secretariats managed by the World Bank: one in North (MDTF-N) and the other in South (MDTF-S).Donor commitments have increased rapidly through 5 One of the immediate measures taken to support the implementation of the CPA is the Joint Assessment Mission (JAM). After the signing of the CPA, the challenges of recovery and reconstruction called for an unprecedented response by the international community, both in terms of funding and in terms of coordination of the recovery and reconstruction effort. In 2004, a National Joint Assessment Mission (N-JAM to distinguish it from the Darfur or D-JAM) co-led by the World Bank and the UN was launched to assess the needs of Sudan over the six-year Interim Period and develop with Government Authorities a framework for reconstruction.

6 A JAM for Darfur was launched after the signing of the Darfur Peace Agreement in May 2006 and is still ongoing. It is co-led by the ADB, the World Bank and the UN. The Core Coordination Group (CCG) of the D-JAM is chaired by the Netherlands. Like the N-JAM, the Darfur JAM aims at providing the framework for the post-conflict reconstruction of Darfur.

Box 3: MDTF-S Financed Capacity Building related projects/programs in Southern Sudan as of October

2006 In the South, MDTF supports the following projects related to capacity building: Projects/Programs US$

Million (i) Southern Sudan Health Umbrella

Program (ii) Multi-donor Education and rehabilitation

Project (iii) Core Fiduciary Systems Support

Project (iv) Capacity Building to Livestock and

Fisheries Sectors Project (v) Capacity Building Institutional

Development and Human Resources Development in Southern Sudan

(vi) Capacity for State Governments (vii) Rule of Law Project (viii) Strengthening Sector Capacity to

deliver Sustainable Water and sanitation Services

20 20 9 10 8.3 8 13 15

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the MDTF since the signing of the CPA in 2005. 2.5.3 In addition to the MDTF, Operation Lifeline Sudan (OLS)/OCHA, a consortium of six UN agencies and 45 other organisations co-ordinated by UNICEF, was the main mechanism used by most donors to channel funds for humanitarian and emergency activities in Southern Sudan. UNICEF has also established in January 2004 under its regulations, rules and procedures, the Capacity Building Trust Fund (CBTF) managed by the consultaing firm KPMG for the receipt and administration of funds received from donors intending to support capacity building activities in Southern Sudan. Due to weak performance and lack of resources, the mandate of the fund will not be renewed. The United States Government has been the largest donor for humanitarian assistance in Sudan over the last two decades, providing USD 1.4 billion in humanitarian and development assistance since 1990. Currently, over 100 projects are ongoing in Southern Sudan, financed by 21 different donors. The total value of the projects is estimated at US$ 1.068 billion. The highest level of donor funding is to the infrastructure sector, which has the largest MDTF and USAID projects. The next three major sectors in terms of donor funding are health, national resources and education. Sectors with the least donor funding are security and economic functions. The MDTF is the largest donor (US$ 465 million), followed by the USAID (US$ 284 million) and the EU (114 million). 2.6. ADF Initiatives

2.6.1 The Bank Group started its lending operations in Sudan in 1971, and has, to date, approved 31 operations, amounting to a total commitment of UA 281.9 million. The ADF intervened in the area of poverty reduction through the financing of three emergency programs and an institutional support project to the Ministry of Finance and National Economy (MoFNE) and Bank of Sudan (BoS). The first two emergency programs were a Bank's response to the floods of 1988 and 1998 that devasted Sudan. In 1988 the Bank contributed to the Flood Reconstruction Programme with an ADF loan of UA 25.6 million and a TAF grant of UA 0.516 million to assist the GoS rapidly restore the productive capacity of 10 devastated States. The programme was co-financed with the European Union, the Islamic Development Bank and the World Bank. Then, as a consequence of the 1998 floods, the Bank allocated a grant of US$ 0,5 million for the Humanitarian Emergency Relief Support to the Victims in Kassala state to provide emergency aid in the sector of health. The third emergency program is a multinational intervention in the Horn of Africa approved by the Board in 2000, through which Sudan benefited from US$ 0,5 million in the framework of the Bank's emergency operation aimed at fighting famine in nine countries of that region. The institutional support project amounted to UA 2.72 million which targeted the Ministry of Finance and National Economy (MoFNE) and Bank of Sudan (BoS) and approved in 1991 had an objective to strengthen the Government's economic and financial management capabilities as a pre-requisite for sustainable poverty reduction. This project was completed in September 1999. 2.6.2 The Bank suspended its lending operations in Sudan since 1993 due to arrears. However, the CDP adopted in 2006 indicates that it is committed to re-engage constructively and creatively in Sudan to support the peace and reconstruction process. The most recent Bank initiatives are the Emergency Assistance to fight the Avian Flu approved in October 2006, and in the area of capacity building, the technical assistance funded through the Nordic Governance Trust Fund and approved in September 2006. This last initiative aims at providing technical assistance to GoSS (specifically to the Ministry of Finance and Economic Planning and to the Southern Sudan Center for Census, Statistics and Evaluation) in the areas of (i) Public Financial Management, Macro-Economic Reforms, and (ii) macro-economic data base and data analysis in the period of October 2006 to September 2007. Two experts (one macro-economist and one statistician) will provide this assistance which is ongoing since October 2006. The Bank is also fully involved in the Darfur JAM as co-lead of the Core team with the World Bank and the UN. Six experts assessed in the period July to November 2006 the reconstruction needs of Darfur as part of a joint assessment mission comprising the World Bank and the UN. In the division of responsibilities with other partners, the ADB is lead Agency in the areas of capacity building, gender mainstreaming, water and sanitation

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and infrastructure. The resources for this activity originate from the Norwegian Ad Hoc Fund, the Africa Water Facility and France (which funded a water and sanitation expert). The D-JAM reports will provide the strategic framework for the reconstruction of post-conflict Darfur, and particularly, updated and engendered data for the finalisation of the national PESP of Sudan.

2.6.3 Lessons learned7 from the performance of Bank Group funded projects in Sudan indicate that they have been generally hindered by several institutional constraints. Most of the projects experienced loan effectiveness delays averaging 18 months due to delays in fulfilling loan conditions. The opening in the near future of a Country Office in Sudan is expected to contribute to improving the processing and implementation of the Bank funded activities in the country, in addition to improving policy dialogue. III INSTITUTIONAL CAPACITY IN SUDAN

It is estimated that the public service personnel in Sudan has grown by 45 times since independence, particularly, as a result of the creation of the Federal system. In the same period, government revenue efforts to support the expansion stagnated, despite tremendous public revenue increase due to rapid growth in the oil sector. It is widely acknowledged that Sudan had an effective public administration, until the early 1970s, with well-qualified and effective civil servants, enjoying realistic pay scales. Shortcomings of the Sudanese public services result from the negative impact of war, the under-funding of basic services and brain drain of skilled technicians and professionals moving mainly to the Gulf countries. This chapter will present government's institutions that play a key role in the implementation of poverty eradication strategies, good governance and capacity building programs, mainly the MoFNE and the PESP network in the North, and in the South: the Ministry of Labour, Public Services and Human resources Development (MOLPSHRD), the MoFEP, the Independent Commissions and Chambers, the SSCCSE and the States' government. The MDTF is presented as an institution, as it is a central international funding instrument of GoSS in all key areas. 3.1 Ministry of Finance and National Economy in North

3.1.1 The MOFNE is the main entry point for Bank Group operations in Sudan. The unit within the ministry dealing with poverty eradication policy is the PESP Unit established in 1999 as part of the macro-economic department. The PESP Unit relies on the following key national institutions to provide it with relevant data, and other information related to their respective sector:

• The macro-economic department of the MOFNE; • The Central Bureau of Statistics (CBS); • The line Ministries of Education, Welfare & Social Development, Health, Labor and

Administrative Reform, Information and Communication, Agriculture and Animal Resources;

• State ministries and localities; • Other national institutions such as the National Water Corporation, civil society

organisations, universities and research institutions. 3.1.2 The PESP Unit comprises five professionals. GoNU has expressed the will to strengthen the capacity of the PESP Unit by five additional staff to handle the preparation of the national PESP. Focal points have been appointed in the relevant line ministries, national institutions and in the 16 Northern States to facilitate PESP related activities. Most of the staff need additional training to

7 The Project Completion Report of the 1988 Floods Reconstruction Programme, approved by the Bank indicates that the program encountered many problems and its results are mitigated as only 30% of its objectives were achieved with an implementation delay of seven years.

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perform satisfactorily. The Unit is poorly equipped, particularly in terms of software and vehicles for outreach activities. 3.1.3 The Central Bureau of Statistics (CBS) which is part of the MoFNE, is a key institution for the PESP process, particularly in the areas of data collection, analysis and dissemination. CBS has built valuable experiences in conducting national surveys such as the Safe Motherhood Survey for UNFPA in 1999, the Multi-Indicator Cluster Surveys for UNICEF in 2000 and the National Industrial Survey for the Federal Ministry of Industry in 2003. CBS was also one of the main sources of data for the N-JAM in 2004 and for the D-JAM in 2006. It is poorly equipped, but comprises qualified and experienced staff at central level and in each of the 16 Northern states. 3.2 Social Sector Line Ministries in the North

The social sector line ministries at federal and state levels play a key role in policy formulation in the area of poverty eradication. These are the ministries of education, health, social welfare and development, manpower, agriculture, animal resources, water resources and humanitarian affairs. The Ministry of Welfare and Social Development, plays a key role in the co-ordination of the poverty reduction strategy of the GoNU. It coordinates and monitors poverty reduction programmes, including gender policy and NGO activities. It also regulates and supervises the activities of social funds supported by the government, such as Zakat Fund, the National Health Insurance, the Pension Fund and the Social Insurance Fund. The ministry is composed of the General Directorate of Women and Family, the Centre for Social Development and Culture, the Poverty Reduction Studies & Project Coordination Centre, and the Networks of NGOs working in the field of poverty reduction. In terms of capacity to deliver appropriate services to the population, most of the ministries are weak because of an ineffective structure, poorly trained staff, and inadequate funding for the tasks to be accomplished. 3.3 State Governments and Institutions in the North

Under the GoS's decentralization strategy (1992), the delivery of key service such as education, health, sanitation, local roads and agriculture is delegated to the states and local communities. But the majority of the local governments has neither the resources nor the administrative capacity for these tasks and to address challenges such as the rehabilitation of basic infrastructures and resettlement of IDPs and returnees. Their management capacity is in general weak due to factors such as the negative impact of civil wars, isolation from the international community, and government failure to upgrade the quality of institutional and human resource capacities. States such as Khartoum and Gezira are considered to be better off with better infrastructures, institutional and human resources, both in public and private sectors. A National Fund for States Support (NFSS) was established since 1995, entrusted with the responsibilities to: (i) assist the poorest States, which depend on Federal support to be self-reliant, (ii) eliminate discrepancies and ensure development equity between the states, (iii) ensure national unity through formulation of a social integration programme for the states. Due to the war, only a few Northern states have benefited from this fund. In general, states and local communities will require increased resources and improved financial and human capacity in order to deliver on their responsabilities for providing quality social services. 3.4 Public Institutions in Southern Sudan

3.4.1 In Southern Sudan, the war situation of the past 22 years has meant that public institutions at all levels and domestic capacity for service delivery are, at best, rudimentary. The administration and its infrastructure are very weak. The large majority of public servants have not had any training for over twenty years. As indicated in the N-JAM report, the institutional situation is characterised by overall low level of services provided mainly through NGOs, UN and church organisations. With respect to financial management capacity, all policies, systems, institutional arrangements and staffing need to be built almost from scratch. Since the signing of the CPA, an embryonic administration is emerging. In December 2005, a Government of Southern Sudan (GoSS) comprising 22 ministries and about 15 Independent Commissions and Chambers including the Anti-

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corruption Commission and the Audit Chamber and 10 states governments has been established (see GoSS's Organisation Chart under Annex 3). The GoSS's Cabinet meets regularly, formal appointments to the public service are being made and senior level posts have been filled. A comprehensive budget for 2006 and 2007 was passed, state and local governments have also begun to function. 3.4.2 Most appointments to public service are based on interim procedures. The process of recruiting and appointing civil servants is progressing with the appointment of Ministers, Undersecretaries, directors of capacity building and some directors of planning. An estimated number of 8150 public civil servants8 will be appointed in the short and medium term. Other key operation structures for strategic planning and capacity building are also in place since mid-2006. Among others, the Directorate of Planning in MoFEP, particularly, its Department of Sectoral Planning, the Budget Sector Working Groups which are in charge of sector plicies and strategies, and the Under-Secretaries's Forum led by the Secretariat General of the GoSS which coordinates support to the Undersecretaries as well as their activities. 3.4.3 The MoFEP coordinates all macro-economic reforms programs and the MOLPSHRD plays a key role in the area of building the capacity of the public administration to deliver services to the population. The Independent Commissions and Chambers oversee good governance pratices and ensure participation in decision making procedures. One key institution for poverty eradication is the Southern Sudan Center for Census, Statistics and Evaluation (SSCCSE). The centre was created in 2003 to provide basic data to facilitate decision-making. The centre acts as the central repository for all statistical information on Southern Sudan. In that context, the SSCCSE, which is technically supported by UNICEF, UNDP and since October 2006 by the Bank, serves as an information system for planning, policy formulation, and decision-making. Public administration at all levels lacks the basic human, financial and logistical means to be efficient. Indeed, weak systems, inadequate regulatory experience and capacity, an under-trained workforce, poor infrastructure and almost lack of internal communications capability, severely limit the capacity of the GoSS to deliver the expected public services. 3.4.4. The N-JAM has also assessed a complete lack of procurement capacity in the GoSS. Nevertheless, the GoSS can be commended for having approved in June 2006 an Interim Public Procurement and Disposal Regulations, which are consistent with international procurement standards. These regulations developed with the support of the World Bank, set up a public procurement framework based on the Southern Sudan decentralized government's system where the role and responsibilities of the Procurement Unit of the MoFEP (central to the procurement system) and the Procuring Entities (Ministries, Departments, Government Agencies and States), as well as the control and monitoring mechanism are well-defined. However, for this system to effectively function and be efficient, qualified procurement human resources will have to be developed9. Considering the large territory of Southern Sudan, the difficulties of communication between states and GoSS's decentralised administration, a well performing and transparent Procurement system will require a specific Information System. In this current phase of establishing from scratch a new public administration in the South, an efficient Procurement system managed by competent staff and using appropriate modern logistic support will be crucial in the GoSS quest to institutionalize a good governance environment. The good governance practice and full use of international procurement standards by GoSS Public Administration will certainly facilitate the implementation of future ADF's interventions in Southern Sudan.

8 The number of civil servants is constituted of 1500 members of Senior Civil Service, 3950 personnel in professional grades and 2700 staffs in the sub professional and technical grades. The current core of public service is an aggregation of the inherited CCSS and SPLM/CANS employees characterized by gender and other inequities. 9 All GoSS’s procurement activities are currently centralized in the Procurement Unit of the MoFEP, where two procurement specialists/advisors and a Procurement Agent have been recruited to assist the GoSS in managing all procurements.

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3.4.5. In the South, an entire public service is being built from scratch, providing huge challenges, as well as opportunities to learn from experience elsewhere and introduce a culture of delivery and service10. The overall conclusion is that institutional and human resource capacities at government, state, localities, civil society, and private sectors levels need technical assistance to deliver basic services to the population. These institutional and human capacity weaknesses were identified in the National JAM under a set of core cross-cutting capacity building needs of GoSS to be urgently and efficiently adressed: i) Public Service; ii) Local Government and Service Delivery; iii) Decentralization Framework; iv) Public Finanacial Management; v) Procurement; and vi) Independent Commissions. Therefore, this project will deal with aspects of these weaknesses, which have impact on good governance, taking into account complementarity with other donors. 3.5. The Multi-Donor Trust Fund

3.5.1. The national strategy for the MDTF is guided by the N-JAM Framework and is focused on two central goals: (i) the consolidation of peace through programs such as Demobilisation, Disarmament, and Reintegration (DDR) and support to the establishment of various Commissions envisaged under the CPA, (ii) pro-poor growth by reversing the pro-elite and pro-urban-centered patterns of development of the past. More specifically, MDTF will give priority to (i) national investments to consolidate peace (DDR, Census, Emergency national Infrastructure, etc.), (ii) rural development, (iii) decentralisation and (iv) good governance. Regional dimensions in terms of differences between North and South, were recognised in developing this approach. The strategic objectives of the MDTFs are aimed at ensuring government ownership, transparency and accountability. Due to the fact that the GoSS has signficant revenues of its own, state governments have considerable autonomy and the expectations of the public are consequently large, MDTF-S gives priority in the South to enabling GoSS to prioritise amongst a vast array of recovery and development needs, supporting better management and use of domestic public financial resources and to supporting the development of core capacities of GoSS, particularly, in the area of good governance. 3.5.2 One of the key areas supported by the MDTFs is the decentralisation that characterizes Sudan. The N-JAM report underlines the fact that the role of local government in the post-conflict situation is of particular importance. Most citizens interact with the government at that level in the expectation of enjoying the "peace dividend". Top-down and overly-centralised power has been one of the root causes of the conflict. Local government in the South can play a key role in sustainable peace and reduce Southern Sudan's vulnerability to conflict and disasters. The Local Government Framework elaborated with the assistance of UNDP, sets out a Vision, Objectives and Principles for local government in Southern Sudan. It should be noted that UNDP has been involved with local government in Southern Sudan since 2003 through providing technical assistance to the Local Government Secretariat of the SPLM. UNDP and GoSS have developed a USD 46.9 million three year "Local Government Recovery Program" (LGRP), which will form the basis to build a strong local government sector as a key to more responsive governance, including recovery and planning. It targets the strengthening of the capacity of 30 counties to play a leadership role in democratic governance and service delivery. The program is supported by the European Commission, DFID and the Netherlands, among others. UNDP is currently finalising with the MDTF a new capacity building project targetting the 10 southern states. In the framework of this project, ten experts covering different areas (public financial management, taxation, regional planning, etc.), will be seconded to the ten states for a minimum period of one year. 3.6 Other social protection institutions

Besides government's and donor's efforts, there are many national social protection initiatives and funds in Sudan that play key roles in addressing poverty. Traditionally, social solidarity systems are 10 The institutional capacity situations in the North and South demand different approaches: more technical assistance in the South to support the emergence of public services and policy formulation is mostly required, while more skills upgrading to implement macro-economic reforms in the North is needed.

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deeply rooted in Sudan. An example of such system is the "Nafir" which is widely practised in different parts of the country. The "Nafir" aims at assisting poor farmers during the harvest season, contributing to the building of houses for the poorest and establishing social and religious institutions such as schools, health centres or mosques. With regard to social funds, the most important one is the Zakat Fund set up in 1980. It generates and collects funds according to Islamic law, which regards "alms giving" (known as "Zakat") as obligatory for people considered as well-off. The fund is managed by the Chamber of Zakat. Though it enjoys strong government support, it represents the highest percentage of funding for poverty reduction outside official government control. In 2003, the total funds collected by the Zakat Fund were equivalent to US$ 37 million and the budget for 2004 is estimated at US$ 93 million. 61% of that amount is allocated to the poor to address their needs in areas such as education (bursaries) and health (provision of health insurance and medecines and supply of equipment to health centres). An estimated 1.248.000 families, 31.000 students and 38.000 orphans benefited from support by Zakat in 2003. 48.000 families benefited from health insurance and medical care. Other social protection institutions in addition to the Zakat fund are the Social Insurance Fund, the Pension Fund and the National Health Insurance Fund. Due to the conflict situation in Sudan, the extend of these social protection institutions is mainly limited to Northern Sudan. 3.7 Main Constraints to Capacity Development in Sudan

3.7.1 Analysis of the social and political situation in Sudan indicates that conflicts emanate from weak and unaccountable governance. The main divisive issues are categorized along the following lines: (i) political reforms that safeguard basic rights, (ii) sharing of power, including the structure of the state and self-determination for war-affected areas, (iii) sharing of national resources (land, water, etc.), (iv) controversy surrounding the Three Areas (Abyei, Southern Kordofan/Nuba Mountains, Southern Blue Nile), and (v) land ownership (abolishment of customary rights of access to land). The civil war in Sudan entailed a massive brain drain, which deprived the country of qualified human resources affecting the formulation of public policies and the effectiveness of the public administration. The war also diverted the Government’s attention away from focusing on growth, development, capacity building and absorbed substantial amounts of the fiscal revenues. 3.7.2 The long lasting war in Sudan has led to considerable deterioration in human resources, infrastructure and environment, and resulted in weakening the capacity of institutions and institutional networks in the country and isolation from the international community. The North is mainly characterized by the weakness of its public administration, while in the South, public services are embryonic. All basic institutions in the South need technical and financial support to be operational. For North and South, the main institutional problems to be tackled can be summarised as follows:

• Persistence of insecurity and inappropriate work environment with negative consequences on staff retention in the states, re-settlement of IDPs and implementation of a participatory approach;

• Lack of consensual vision and clear strategy on capacity building; • Lack of long term technical support to strengthen or build national institutions; • Lack of updated and disaggregated data to serve as a basis for government strategies and

policies and Lack of skills training facilities; • Weak strategic co-ordination between key national institutions and lack of ownership.

IV THE PROJECT 4.1 Project Rationale and Design

4.1.1. The Poverty Eradication Concept Note agreed upon in 2004 by GoNU and GoSS and the commitments made in the JAM orient all levels of government to the following key objectives:

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a. Consolidation of peace through demobilisation, promotion of democratic principles and culture of tolerance;

b. Implementation of a comprehensive capacity building strategy through a decentralised system of governance, transparency, accountability and equitable resource allocation;

c. Provision of basic social services (primary education, primary health care and clean water). 4.1.2. The project was formulated using a participatory approach through extensive discussions and consultations with GoNU and GoSS, a 2006 high level Workshop with GoSS officials which took place in August 2006 in Juba, as well as with development partners in Khartoum and Juba. The identification of the prioject's priorities is based on a mapping exercice of the situation of GoSS's main institutions (ministries and independent commissions and chambers) and donor interventions in the areas of human resources, office equipments and furniture, ongoing and planned training activities and technical assistance, conducted during the appraisal mission. This mapping provided a clear picture of the gaps to be addressed by the project and the areas where coordination is needed. A dialogue mission visited also Khartoum and Juba in November 2006, to seek consensus with the authorities on the final project's concept and activities. GoNU and GoSS's comments were taken into account in the final version. 4.1.3. The project's implementation will help consolidate the transition to peace, a period during which government's capacity to deliver daily services to the population, and to create an appropriate environment for the returning and resettlement of IDPs and refugees, should be strengthened to reduce the risk of future outbreaks of conflict. In the South, the project will help GoSS's embryonic administration strengthen institutional capacity to address poverty issues effectively, through macro-economic stability, good governance practices and support to the capacity of the states. In the North, the project will focus on the finalisation of the national PESP and support to the social protection policy through an assessment of the impact of the existing social funds. The availability of a national PESP covering the entire country, will be an asset for poverty reduction and sustainable peace. 4.1.4. The project will build on other ongoing Bank funded activities in Sudan such as the technical assistance support to the GoSS and the assessment in the areas of capacity building and gender conducted in the framework of the D-JAM. The D-JAM reports will be the main source of data for the integration of the needs of Darfur into the national PESP. In the South, the ongoing technical assistance to improve the statistical database will be very useful for the project. The project will enhance ongoing efforts undertaken by other partners in the framework of the N-JAM, and through the support provided to the national PESP process by the IMF, WB, UNDP and DFID. Coordination with other donors will be a key project priority. This will be facilitated by the N-JAM and the MDTF, the main Framework for donor interventions in Sudan. GoSS has adopted, in November 2006, an Aid Strategy which aims at coordinating development aid within a government-led framework. The project will be implemented within the framework of this strategy. Also in the South, a Donors Reference Group in Capacity Building has been established to ensure coordination of capacity building activities in Southern Sudan. The project managers will join this reference group and actively participate in its activities. With regard to the PESP process, ADB is a member of the donor’s network, which supports the PESP process. Priority will be given to collaborating with UNDP and MDTF, the lead partners in the area of institutional capacity building. 4.1.5. The project's concept takes into account the fact that Sudan is a post-conflict country in which frequent institutional changes will take place in the coming years. Its implementation will be based on the following key OECD Principles for Engagement in Fragile States:

(a) Take context as the starting point (sound political analysis is needed); (b) Focus on state-building as the long-term vision; (c) Align with local priorities where governments demonstrate political will to foster their country's development; (d) Agree on practical coordination mechanisms between international actors; (e) Act fast and with flexibility at short notice when opportunities occur.

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4.2 Project Beneficiaries

4.2.1 The Project coverage is countrywide, with the main thrust on Southern Sudan and the national PESP process. Specifically, in the South, the project aims at strengthening the capacity of GoSS's institutions at central and state levels. In general, it will focus on skills transfer and development in order to make the institutions concerned functional and operational and improve service delivery. The choice of objectives and beneficiaries takes into account what other development partners are already doing or are planning to do in Sudan. 4.2.2 The beneficiaries in the North will be the following government institutions:

• The PESP Unit at MOFNE which coordinates the PESP activities and the line Ministries represented in the PESP Supervision Committee (MoE, MoH, MWSD, MOHA, etc);

• The Central Bureau of Statistics (CBS) which will provide updated data for the PESP; • The Administration of the following states and areas: South Kordofan, North Kordofan, Red

Sea, Blue Nile states, and Abyie area.

4.2.3 In the South, the project's beneficiaries will be the following:

• The Undersecretaries' Forum and the different Undersecretaries of the 22 ministries who are expected to play a key role in the financial and technical management of the ministries;

• The PESP Unit to be set up at the MOFEP to coordinate and execute the preparation of the Southern I-PESP and the ten budget sector working groups which will oversee the PESP process;

• The Southern Sudan Centre for Census, Statistics and Evaluation which will provide updated data for the Southern I-PESP;

• The Directorates for Capacity Building of key socio-economic ministries which are in charge of the capacity building strategy of their respective departments;

• The Independent Commissions and Chambers which have the task of overseeing the implementation of the CPA, macro-economic reforms, good governance practices, and the promotion of a peace culture and respect for human rights; and

• The 10 Southern Sudan States including their Procurement Units. 4.3 Strategic Context

4.3.1 The strategic framework for the design of the project is given by the following policy documents adopted by GoNU and GoSS: the PESP Concept Note, the CPA, the DPA, the N-JAM report, the D-JAM progress reports, the MDTF progress reports, GoSS's Aid Strategy, the Plan for Finalising the National PESP, and the ESPA. 4.3.2 The project objectives are in accordance with the Bank Group Strategy for Sudan as defined in the Country Dialogue Paper approved by the Board of Directors in July 2006. This strategy gives priority to institutional capacity building in Sudan. The project is also in conformity with Bank policies related to good governance and poverty reduction. It is in compliance with the new Bank approach for assistance to fragile states, currently under consideration. In line with the CPA, the project's design is based on a differentiated approach, which takes into account the differences between the North and South. The project will target mainly gaps in the area of capacity building, taking into account UNDP and MDTF's leadership in the area. 4.4 Project Objectives

In line with the above-mentioned context, the sector goal of the project is to contribute to national efforts to eradicate poverty in Sudan. The project objective is to strengthen the capacity of key national institutions in North and South to implement macro-economic reforms and good governance practices for poverty eradication in Sudan.

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4.5 Project Description

The project objectives will be attained through the following three components: i) Support to the preparation of the national Poverty Eradication Strategy Paper (PESP); ii) Strengthening the human and institutional capacity of GoSS; and iii) Project Management. The project will involve four categories of expenditure (Works, Goods, Services and Operating Costs), and three main types of capacity building interventions: i) technical assistance for developing and strengthening government institutions and system in the areas of macro-economic reforms and governance; ii) human capital development through training; and iii) logistic support and rehabilitation/construction of key facilities and offices of government institutions. The project outputs per components are listed below in table 4.1.

Table 4.1: Project Outputs by Component COMPONENTS KEY OUTPUTS KEY INDICATORS

I. Support to the preparation of the national Poverty Eradication Strategy Paper (PESP)

Output 1: Updated household data are produced for Northern and Southern Sudan

Output 2: The capacity of the different stakeholders in Northern and Southern Sudan to contribute to the PESP process is strengthened

Output 3: The I-PESP for Southern Sudan is completed and approved

Output 4: The I-PESP for Northern Sudan is updated, extended to Darfur and The Three Areas, and approved

Output 5: The consolidated national PESP is completed and approved by all stakeholders.

1. Reports of the Updated Household Surveys are available by December 2007 in all line ministries and institutions (PESP network) to be involved in the elaboration of the I-PESPs. 2. PESP process completed on schedule with an effective participation of well-trained stakeholders in Northern and Southern Sudan 3. The I-PESP Reports for Northern and Southern Sudan are validated and available to the general public by December 2008. 4. The consolidated national PESP is validated by all stakeholders and available to the general public by December 2009

II. Strengthening the institutional and human capacity of GoSS

Output 1: Conceptual and operational capacity of GoSS's institutions for effective development management and good governance improved

Output 2: Capacity of the 10 Southern States strengthened in the area of local development planning and policy coordination Output 3: Procurement Information System (PIS) piloted and functional in the 10 Southern Sudan States and well-trained critical mass of procurement professionals are effectively managing the procurement system. Output 3: Training facility available and operational at the Ministry of Labour.

1. By December 2009, 100% of the project financed Training activities fully implemented and 90% of the staff trained remained operational in their respective services by December 2010. 2. 10 States beneficiaries of the project's activities are functional and well-performing their official mandates for local development planning and policy coordination as evidenced through their Annual (Development) Reports submitted to GoSS each year starting December 2008. 3. All equipment and software for the PIS installed and operational and 410 civil servants trained on procurement and the PIS by December 2008. 4. Training facility of the Ministry of Labour is built, equipped and is functional by May 2008.

III. Project Management Output 1: Fast track first disbursement of the project achieved and subsequent project disbursements as per schedule. Output 2: Efficient Project implementation achieved

1. First disbursement of ADF grant made by May 2007, at least 75% of disbursement on schedule by May 2008 and 95% by December 2009. 2. Approved procurement, budgeting and accounting procedures and audit safeguards implemented, with required reports submitted on schedule each project's implementation year. 3. Project Implementation Schedule followed and project's outputs successfully delivered.

4.6. Detailed Description of the Project

4.6.1. The description of the project's three components and their main activities is provided as follows: Component I: Support to the preparation of the Poverty Eradication Strategy Paper (PESP)

4.6.2. This component will aim at finalising the national PESP. In line with the plan made by the PESP unit in Khartoum, priority will be given to the development of an I-PESP for Southern Sudan,

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and to updating the I-PESP of the North. The second step will be to merge both documents into one National PESP by the end of 200811. To achieve the project's expected results, the activities of the first component are grouped into two main sub-components: i) Updating the I-PESP of Northern Sudan, and ii) Developing the I-PESP of Southern Sudan. The component’s activities will be financed under the categories of expenditure Goods, Services and Operating Costs. 32% of the project’s funds are allocated to the component. Sub-component 1: Updating the I-PESP of Northern Sudan

4.6.3 The process of updating the I-PESP of Northern Sudan using a participatory approach will involve four(4) sets of activities: i) Updating of data and information on poverty situation in Northern Sudan; ii) Strengthening the PESP-N Unit's capacity to efficiently conduct and manage the I-PESP process while also enhancing the technical capacity of relevant personnel of the PESP network; iii) Strengthening the capacity of five (5) states of northern Sudan (South and North Kordofan, Red Sea and Blue Nile states, and Abyei area) to enable them to effectively contribute to the I-PESP updating process; and iv) Validating the I-PESP. Updating of data and information on poverty situation at national level

4.6.4 Sudan lacks an appropriate baseline data which is critical for an effective poverty reduction strategy. The project will finance the implementation of a national baseline household survey (in north and south) to update, disaggregate by region/states, gender and socio-professional categories, data on poverty. Due to the institutional and geographical complexity of Sudan, the Central Bureau for Statistics (CBS) will execute this baseline household survey nationally, in close collaboration with the SSCCSE. Both are government institutions that have good experience in implementing surveys and a network of field personnel for data collection. The CBS will develop a methodology (sampling, questionnaire), facilitate fieldwork (data collection) in North and South, co-ordinate data processing, report writing and publishing, and ensure effective co-ordination with the PESP Units in the North and the South. A lump sum of 1.08 million UA will be made available for this activity. The distribution of the allocated resources above will be determined following the development of a work plan by each region. 4.6.5 A workshop will be organized by the PESP Units in Khartoum and Juba to approve and disseminate the survey's results. About 120 participants comprising representatives of the line ministries (PESP focal points), States governments, civil society organisations and the private sector, will attend the workshops. About 30% of the participants will be women. Strengthening the capacity of the PESP-N Unit and relevant personnel of the PESP network

4.6.6. To tackle capacity weaknesses and avoid any delay in the implementation of the updating of the I-PESP, capacity building interventions will be financed by the project to support the PESP-N Unit and the PESP-network. They will be primarily in the form of technical assistance, training, study tours and logistic support to enhance the ability of the concerned institutions to successfully carry out the major tasks assigned to them. 4.6.7 The project will finance the services of consulting firms with reputable experience in elaborating Poverty Reduction Strategy Papers (PRSP) to provide the following services to the PESP-North Unit:

• i) support and strengthen the day to day management of the PESP-N Unit mainly in the areas of activities' programming/planning, procurement and monitoring (6 person-months);

• ii) analyse gender aspects of the northern I-PESP and feed recommendations into the process so that the updated I-PESP is fully engendered (2 person-months);

11 The project concept is flexible and will integrate in due course any new PESP approach proposed by GoNU and GoSS. The finalization of a national PESP is considered by all stakeholders to be a key element of peace consolidation

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• iii) provide 6 person-months expertise to: a) assess the impact of the following social protection institutions: pension fund, social solidarity fund, health insurance, and b) recommend appropriate measures to the authorities to improve the institutions' efficiency in contributing to the eradication of poverty in Northern Sudan.

• iv) conduct in-country training for the Northern PESP Unit and network, and relevant staff of the 16 Northern states and key ministries in: (a) database management and data analysis, (b) monitoring and evaluation, (c) post-conflict management and wealth sharing, d) pro-poor policy formulation and analysis. The training services provision has been estimated at 12 person-months. Four (4) training seminars/workshops organized in Khartoum for 180 participants (with at least 30% of women attendees) will be implemented over the first two years of the project's life.

4.6.8. To complement the training described above, the project will finance short-term courses abroad and two study tours. Two staffs of the PESP-N Unit will attend short-term courses abroad to strengthen their applied skills in poverty analysis and measurement; rolling budgeting management and pro-poor budgeting (2 person-months). Two staffs from the planning departments of eight ministries, including PESP unit at the MoFNE, will also undertake study tours of African countries that have successfully experienced implementation of a PESP or PRSP process. These activities will be organised jointly with relevant staff from the South 4.6.9. To facilitate the work of the PESP-N Unit the project will finance office equipment, computers and accessories and one all-terrain vehicle for liaison purposes. The GoNU counterpart funding will cover over the life of the project all operating & maintenance costs of all equipment and vehicles procured for the North, as well as associated costs for training, workshops and meetings, and sundry items implemented by GoNU. Strengthening the capacity of five (5) states of northern Sudan

4.6.10. This activity will be carried out by a consulting firm and will be in the form of a secondment of experts for 14 months to each of the identified 5 northern Sudan's most marginalised states (South and North Kordofan, Red Sea and Blue Nile States, and Abyei) in the area of regional socio-economic planning and development (70 person-months). This activity will facilitate the availability of updated data on the 5 states for the finalisation of the national PESP. Validating the I-PESP

4.6.11. At the end of the I-PESP process, the project will finance a five-day validation workshop to be conducted by the PESP-N Unit. An estimated 90 key stakeholders (with at least 30% women participants) will attend the workshop to review and validate the I-PESP. Sub-component 2: Developing the I-PESP of Southern Sudan

4.6.12. The process of developing the I-PESP for the South will involve similar key sets of activities already described for the North, and presented as follows: i) Elaboration of a baseline household survey to provide poverty-related and engendered data and information for the South I-PESP process; ii) Strengthening the capacity of the PESP-S Unit to be established in the Ministry of Finance and Economic Planning (MoFEP), the ten (10) Budget Sector Working Groups and the other key stakeholders (key ministries, the 10 State Governments, the Independent Commissions and Chambers, and the civil society), and iii) Validating the I-PESP. Preparatory activity of a baseline household survey in the South

4.6.13. The project will finance the preparatory activities (recruitment, training, office facilities, etc.) for the implementation of a baseline household survey covering the 10 Southern States. These activities will be executed by the Southern Sudan Centre for Census, Statistics and Evaluation (SSCCSE). Additionally, as part of the preparatory activities, the SSCCSE will develop a work plan for the actual implementation of the household survey in the South. The SSCCSE has the capacity to

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undertake this assignment and has already implemented surveys for different donors in the South. SSCCSE will work in close collaboration with the CBS in Khartoum, as well as with other stakeholders of the I-PESP process in the South, particularly the ten Budget Sector Working Groups. A lump sum of 0.17 million UA will be made available for these activities. Strengthening the capacity of the stakeholders of the South I-PESP process

4.6.14. Due to the newness of government's institutions in Southern Sudan and the necessity of having an efficient body to manage the implementation of the PESP process, the project will finance the establishment of a PESP-S Unit in the MoFEP through the provision of: i) the services of an individual consultant (2 person-months) to assist the MoLPSHRD and MoFEP to prepare the terms of reference (ToR) of the unit and of the staff, as well as a business plan for the preparation of the Southern I-PESP12 ; and ii) logistic support in a form of office automation equipment (fax, computers and accessories, photocopiers, printers, audio-visual equipment), one all-terrain vehicle for liaison purposes, and office furniture. 4.6.15. To address the lack of experience of the PESP-S Unit and strengthen the capacity of the different stakeholders of the South I-PESP process, the project will also finance, as in the North, the services of consulting firms13: to primarily guide and support the work of the institutions related to the elaboration of the I-PESP through the following activities:

• (i) supply of technical assistance in the areas of macro-economic, social development and data analysis and gender mainstreaming (16 person-months).

• (ii) In-country trainings to be conducted in Juba during the first year of project's implementation. The training will target 75 participants (at least 30% women attendees) from the PESP-S Unit, the budget sector working groups, the PMU-S, relevant civil servants in key line ministries, the ten state governments, and the Independent Commissions and Chambers. The training modules to be designed and delivered by the consultant (9 person-months) will mainly cover the same subjects provided to the PESP network in the North: (i) database management and data analysis, (ii) monitoring and evaluation, (iii) post- conflict management and wealth sharing, (iv) pro-poor policy formulation and analysis.

4.6.16. As already mentioned in paragraph 4.6.10, key staff of the PESP-S Unit will attend short-term courses abroad and participate jointly with the staff of the North in the same study tours of African countries that have successfully experienced implementation of a PESP or PRSP process. Validating the I-PESP

4.6.17. The project will finance a five-day regional stakeholders' validation workshop for an estimated 100 key stakeholders (with at least 30% women participants) to review and approve the I-PESP of Southern Sudan. The workshop will also prepare the merging of the South I-PESP with the North-I-PESP into the national PESP report. 4.6.18. The operating costs associated with the training, workshops and meetings, and sundry items for the development of the South I-PESP, as well as the recurrent costs related to the equipment and vehicle of the PESP-S Unit will be financed through the GoSS counterpart funding. This financing principle of the project's Operating Costs expenditure undertaken in Southern Sudan will also apply to the activities implemented under project's components II and III. 12 The PESP-S Unit will mainly: i) plan, manage and coordinate the activities of the elaboration of the I-PESP in the South, and ii) assist the ten Budget Sector Working Groups, which shall play a key role in the development of the I-PESP for Southern Sudan. 13 The ToR of all the capacity building consulting firms involved in the present project will be detailed in the Project Implementation Document (PID) and shall stipulate training and skills transfer of identified counterpart staff to achieve the overall objective of capacity building. If the firms are different in the North and in the South, their ToR should clearly indicate that they would collaborate and harmonize their capacity building approach to effectively obtain the required project outputs.

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Consolidation of the North and South I-PESP into the National PESP

4.6.19. The project will allocate provisional funds to organize validation workshop of the National PESP at the end of the process. It is expected that 30% of the participants will be women. The PMU will ensure that the final National PESP is fully engendered. Component II: Strengthening of the human and institutional capacity of the Government of Southern Sudan

4.6.20. The project will pay special attention to the strengthening of GoSS's capacity to efficiently formulate and implement macro-economic reforms, good governance and poverty eradication strategies. The objective of this component is to contribute to the GoSS's efforts to consolidate the foundation for a transparent functioning and well-performing public administration in the areas above-cited. This will entail implementing the following three (3) sub-components: (i) supporting the newly created 22 ministries, nine (9) of the Independent Commissions and Chambers, to enable them to deliver basic public services to the population; (ii) strengthening the capacity of the 10 states of Southern Sudan in the area of regional socio-economic planning and development to enhance the performance of the GoSS's decentralized system; and (iii) establishing a Procurement Information System (PIS) accompanied with the development of a procurement training system, two activities which are essential for sustaining good procurement practices, a key element of good governance and a sound public finance management. The component’s activities will be financed under the categories of expenditure Goods, Works, Services and Operating Cost. 54% of the project’s funds are allocated to the component. Sub-component 1: Support to the newly created ministries and Independent Commissions and Chambers

4.6.21. The support to these institutions will be mainly in the form of technical assistance, training, and supply of equipments and construction of a highly needed training facility for the Ministry of Labour, Public Service and Human Resources Development (MoLPSHRD). The project will finance two (2) sets of activities under this sub-component: i) strengthening the MoLPSHRD's logistic and training facility capacities to facilitate and better accommodate the training of the GoSS public servants; and ii) strengthening the capacity of Undersecretaries and Independent Commissions and Chambers. Strengthening the MoLPSHRD's logistic and training facility capacities

4.6.22. The Project will support the construction of a basic training facility for the MoLPSHRD (approximately 600m2) that can host up to 120 people. It will comprise one training room for 100 people; two meeting rooms for 20 people each, 2 offices, and ancillary service rooms. The construction of this facility is justified by its cost-effectiveness given the volume of trainings during and beyond the Project and given the fact that there are severely limited suitable training venues in Juba. The Project will finance consultancy services for the architectural design and technical studies and construction's supervision of the training facility. 4.6.23. The Training facility will also be supported with training equipment (including about 50 computers and accessories, 2 heavy duty photocopy machines, some audio-visual tools) and some furniture to accommodate 150 people, and an all-terrain mini-bus to carry-out the daily transportation of the trainees. The lack of public transportation in Southern Sudan justifies the procurement of the all-terrain mini-bus. Undersecretaries and Independent Commissions and Chambers' capacity building

4.6.24. The project will finance the services of consulting firms to provide technical assistance in the areas of strategic planning, monitoring and evaluation to nine of the Independent Commissions

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and Chambers (18 person-months), and to strengthen the capacity of the 22 Undersecretaries and Directors of capacity building departments in the same areas (24 person-months)14. 4.6.25. A consulting firm will also be recruited to develop and conduct annual executive management trainings for the 22 Undersecretaries, the Directors of capacity building departments and the senior finance officers/accountants of the different ministries (18 person-months). Relevant professional staff of the nine Commissions will benefit from training programmes developed and implemented by the same consultant and mainly focusing on Public Service Management, Human Resources Management, good governance, anti-corruption strategy, gender mainstreaming in Public Services (14 person-months). The consultant will conduct an assessment of the training needs of these beneficiary institutions during the first month of its mandate and prepare a three-year training rolling plan (to cover the life of the project) to be approved by the government and the Bank. The plan will be reviewed and revised at the end of each year in light of experience and emerging priorities of the GoSS. It is estimated that about 132 senior civil servants and 350 personnel in the professional grades will be trained. The selection of the trainees will take into consideration an appropriate gender balance. It is expected that 30% of the beneficiaries will be women. 4.6.26. The nine Commissions and Chambers will also be supported with computers and accessories and heavy duty photocopy machines, and some office furniture. Sub-component 2: Strengthening the capacity of the 10 states of Southern Sudan

4.6.27. The ten Southern states will be supported with 120 person-months of secondment of experts to develop their capacity in local development planning, coordination with localities and communication with the central institutions. In consideration of economy (management costs) and implementation efficiency, and the need to harmonize the donors’ capacity building approach in the 10 states, this support will be implemented through UNDP, which is already providing to the satisfaction of the GoSS similar specialized support to 30 counties under the LGRP15. 4.6.28. Commensurate with UNDP and MDTF support to the 10 states of Southern Sudan, the project will provide each state with transportation facilities for coordination of their activities with the localities, as well as computers and accessories and office equipment to facilitate the daily activity of the seconded experts. Sub-component 3: Initiating a Procurement Information System (PIS) and the development of a procurement training system

4.6.29. To ensure the implementation of the GoSS Interim Public Procurement and Disposal Regulations, by qualified civil servants, which will contribute to the development of a good governance environment in Southern Sudan, the project will support: i) establishing a Procurement Information System, which will address the lack of internal communications between the states Procurement Units and the central Procurement Unit in MoFNE and ensure transparency and efficiency of the procurement system at local level; ii) the development of a procurement training system that should provide the GoSS with a well-trained critical mass of procurement professionals capable of managing the procurement system. Establishing a decentralized Procurement Information System

4.6.30. Establishing a decentralized Procurement Information System (PIS) in each of the 10 states will involve developing simple and effective IT processes that will make it possible for the states as Procuring Entities to: i) submit electronically (through Emails, internal website, etc.) to the MoFEP

14 The Under-Secretaries’ Forum led by the Secretariat General will play a key role in the coordination and channeling of the support to the Undersecretaries and to the directorates for capacity building of the different ministries. 15 The MDTF will support the same project by providing experts in the areas of public financial management and taxation. UNDP is also proving to the states expertise in public infrastructure development.

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Procurement Unit or/and other legally established Procurement Committee16 all required procurement documents for approval; ii) publicise procurement information of the state to the general public; iii) increase their procurement archiving capacity (through electronic record management); and iv) perform in the medium term advanced features such as e-procurement that will enable suppliers to submit bids electronically. The PIS will also enhance the capability of the MoFEP Procurement Unit to store information and data on procurement activities from each of the 10 states, including information on markets, procurement advertisements, number contracts awarded, complaint, appeals, etc17. 4.6.31. The project will finance the services of a consulting firm to develop and install the PIS, and train the staffs of the different Procurement Units of the states and the MoFEP to effectively use the PIS (8 person-months). The project will also support the 10 states Procurement Units, where needed, with computers and accessories and maintenance services. Support to the development of a procurement training system

4.6.32. The project support to the development of a procurement training system will include: i) the elaboration of training modules and case studies on the GoSS Interim Public Procurement and Disposal Regulations, 2006 and the ADB's Procurement Rules (to be used for the training of GoSS staffs involved in the project's implementation); and ii) the design and implementation of training workshops and toolkit. The consulting firm to be recruited (10 person-months) for this set of activities will field a team of procurement experts with pedagogical expertise in developing modules, which can be used for short-term and long-term training, which will also have the training responsibility of the GoSS civil servants over the life of the project. It is envisaged to train 410 senior and professional civil servants (with at least 25% of women) representing the 10 states, the 9 Independent Commissions and Chambers, the 22 under-secretariats and the different Project Management Units. Component III: Project Management

4.6.33. In conformity with the “One-Country-Two Systems” institutional arrangement of the CPA, the project will be managed by two separate Project Management Units (PMUs). In Northern Sudan, the PMU will be within the MoFNE in Khartoum. The PMU in Juba will be part of the Directorate for Capacity Building of the MOLPSHRD. Both PMUs will have overall responsibility for managing and coordinating all activities and provide leadership to support the project's implementation. 4.6.34. Each PMU will operate with a core team of three (3) professional civil servants (a Project Manager, a Procurement Specialist, and a Finance and Accounting Specialist) assigned to the project respectively by the GoNU and GoSS, and assisted by support staff (secretary, messenger, driver). The PMUs' core team staffs’ qualifications and experience will be reviewed and approved by the Bank prior to their appointment. The ADF grant resources will finance performance-related increments for these civil servants, which amounts will be based on each government's civil servant salary regulations. Their performance's evaluation will be approved by the Bank prior to the renewal of their contract/agreement under the project. 4.6.35. To mitigate the risk of delays in project implementation as a result of limited project management capacity and lessons learnt from project's implementation in the past, the project will finance backstopping services from consultants for both PMUs in the areas of project management, financial management, procurement and monitoring and evaluation (16 person-months). The project will also support training of project staffs in the same areas. The service of two (2) individual 16 The approvals are subject to the thresholds described in the GoSS Interim Public Procurement and Disposal Regulations, 2006. 17 This project's intervention will complement the support being provided through other projects, such as the MDTF-financed Capacity Building project that has a component on strengthening the GoSS communications and information services, and the Bank-financed COMESA Procurement Reform Project that also covers Sudan.

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consultants will be procured for assistance in preparing the project's Operations Manual for the activities in the North (2 person-months) and in the South (2 person-months). ADF funds will also be used to finance the recruitment of external audit firms to undertake the annual audit exercise separately in the North and in the South. Consultants will be funded by the project also to prepare the midterm review and the PCR of the project activities both in the North and South. 4.6.36. Each of the two PMUs shall be supported with computers and accessories, and general office equipment (fax machine, heavy duty printer and photocopy, audio-visual equipment), a generator and an all terrain vehicle. Office facilities will be rehabilitated in Khartoum to accommodate the PMU-North. The rehabilitation of office facilities in the South will be part of MDTF's global rehabilitation plan. 4.7. Environmental Impact

The project is not expected to have any adverse impact on the environment. It is classified as category III under the Bank’s classification of projects. The Civil Works for the erection of the conference and training facility do not require deforestation or heavy earthmoving, and rehabilitation of government offices to accommodate the PMUs and the PESP-S task force only involves minor works. However, any negative aspects of de-vegetation, soil erosion, and formation of gullies, dust and noise will be mitigated by re-vegetation after completion of the works and construction of appropriate drainage systems. During construction, contractors will observe mitigating measures to preserve natural elements on the site and minimize dust and noise disturbances by fencing off work areas. All measures for protection and preservation of the environment will be included in the construction tender documents and supervised during Project implementation. The Project is not expected to be detrimental to the lives of poor and vulnerable groups. 4.8 Project Costs

The total cost of the project, net of taxes and duties, is estimated at UA 10.69 million of which UA 9.09 million is foreign exchange (FE) and UA 1.60 million is in local currency (LC). The foreign exchange component represents about 85.03% of total project cost. For the purpose of costing, all items have been priced in USD and converted into Units of Account at the exchange rate applicable at the Bank for the month of August 2006. The USD has been used as the common currency between North and Southern Sudan because the two regions use different currencies. Unit costs were determined in line with those of the MDTF, S-JAM, UNJLC, experience from other donors, and Government sources. It is important to note that unit costs for Sudan are high and those for Southern Sudan, exceptionally so. Due to the volatility of a post-conflict emerging economy, costs for Southern Sudan are additionally subject to high levels of fluctuation. Physical contingencies are set at 10% for works and 5% for all other categories of expenditure. A 3.6% price escalation in local currency and in foreign exchange calculated based on an annual inflation rate of 3% internationally and 5% locally during project implementation, has been factored into the project cost. Tables 4.2 and 4.3 present the cost estimates by component and by category of expenditure, respectively. Costs for Project Management reflect the dual nature of project implementation under the “one country-two systems” approach, and the capacity building aspects of management itself, as well as the vast geographic coverage and diversity of the ninth largest country in the world.

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Table 4.2: Estimated Project Costs by Component

(US$ Million)

(UA Million)

COMPONENTS L. C. F. E. Total L. C. F. E. Total % F. E.

% Total Costs

I. Support to the preparation of the national PESP 0.32 4.41 4.74 0.22 2.97 3.19 93% 29.9% II. Strengthening Human & Institutional Capacity of GoSS 0.78 6.87 7.65 0.53 4.63 5.16 90% 48.2% III. Project Management 1.00 1.04 2.04 0.67 0.70 1.38 51% 12.9% Total BASE COSTS 2.11 12.32 14.43 1.42 8.30 9.72 85% 91.0% Physical Contingencies 0.11 0.76 0.87 0.07 0.51 0.58 87% 5.5% Price Contingencies 0.16 0.41 0.56 0.11 0.27 0.38 72% 3.6% TOTAL PROJECT COSTS 2.37 13.49 15.86 1.60 9.09 10.69 85% 100.0%

Table 4.3: Estimated Project Costs by Category of Expenditure

(US$ Million)

(UA Million)

CATEGORIES OF EXPENDITURE L. C F. E. Total L. C. F. E. Total % F. E.

% Total Costs

A. Works 0.05 0.37 0.42 0.03 0.25 0.28 88% 2.6% B. Goods 0.05 2.44 2.50 0.04 1.65 1.68 98% 15.7% C. Services 0.06 9.51 9.57 0.04 6.41 6.45 99% 60.3% D. Operating Costs 1.94 - 1.94 1.31 - 1.31 - 12.3% Total BASE COSTS 2.11 12.32 14.43 1.42 8.30 9.72 85% 91.0% Physical Contingencies 0.11 0.76 0.87 0.07 0.51 0.58 87% 5.5% Price Contingencies 0.16 0.41 0.56 0.11 0.27 0.38 72% 3.6% TOTAL PROJECT COSTS 2.37 13.49 15.86 1.60 9.09 10.69 85% 100.0%

4.9 Sources of Financing and Expenditure Schedule

4.9.1 As indicated in Table 4.4, the ADF grant of UA 9.62 million will cover 90% of the total project cost. ADF grant financing of foreign exchange costs and local currency respectively represents 85.03% and 4.96% of the total cost of the project. The overall Government’s Counterpart funding amounting to UA 1.07 million (10% of project’s costs) is composed of the Government of National Unity (GoNU) and the Government of Southern Sudan (GoSS) financial contributions. The GoNU will contribute UA 0.35 million, representing 3.3% of the overall project cost and 32.71% of the overall Government’s Counterpart funding. The GoSS will finance UA 0.72 million that covers 6.7% of the project total cost and 67.29% of the overall Government’s Counterpart funding. The GoNU and GoSS’s financing represent respectively 10% of the cost of the project’s activities undertaken in Northern Sudan and Southern Sudan and cover entirely the Government Counterpart funding in these regions. While the ADF grant contribution will cover all foreign exchange costs and part of local costs GoNU and GoSS’s contributions will cover local costs as indicated in Table 4.4, 4.5, 4.6 and 4.7 below.

Table 4.4: Estimated Project Costs by Sources of Finance (UA Million.) SOURCE OF FINANCING F. E. L. C. Total % Total The GoSS - 0.72 0.72 6.7% The GoNU - 0.35 0.35 3.3% ADF 9.09 0.53 9.62 90.0% TOTAL PROJECT COSTS 9.09 1.60 10.69 100.0% Percentage of Total Costs 85.03% 14.97% 100.00%

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Table 4.5: Estimated Project Costs by Source of Finance and by Category of Expenditure (UA Million.)

GoSS GoNU ADF TOTAL CATEGORIES OF EXPENDITURE L. C. L. C. F. E. L. C. Total F.E. L.C. Total %TC. A. Works - - 0.28 0.04 0.32 0.28 0.04 0.32 3.0 B. Goods - - 1.86 0.04 1.90 1.86 0.04 1.90 17.8 C. Services - - 6.95 0.04 6.99 6.95 0.04 6.99 65.4 D. Operating Costs 0.72 0.35 - 0.41 0.41 - 1.48 1.48 13.8 TOTAL PROJECT COSTS 0.72 0.35 9.09 0.53 9.62 9.09 1.60 10.69 100.0 Percentage of Total Costs 6.70% 3.30% 85.0% 5.0% 90.0% 85.0% 15.0% 100.0%

Table 4.6: Estimated Project Costs by Source of Finance and by Components (UA Million) GoSS GoNU ADF Total

COMPONENTS L. C. L. C. F. E. L.C. Total F. E. L. C. Total %TC. I. Support to the preparation of the national PESP 0.08 0.12 3.23 0.04 3.27 3.23 0.24 3.47 32.5% II. Strengthening Human & Institutional Capacity of GoSS 0.53 - 5.09 0.06 5.15 5.09 0.60 5.69 53.2% II. Project Management 0.11 0.23 0.77 0.42 1.19 0.77 0.76 1.53 14.3% TOTAL PROJECT COSTS 0.72 0.35 9.09 0.53 9.62 9.09 1.60 10.69 100.0% Percentage of Total Costs 6.7% 3.3% 85.0% 5.0% 90.0% 85.0% 15.0% 100.0%

Table 4.7: .Financing Plan by Region (UA Million)

REGIONS ADF GoNU GoSS Total/Region % TOTAL SOUTH 6.48 - 0.72 7.20 67.4% NORTH 3.14 0.35 - 3.49 32.6% TOTAL PROJECT COSTS 9.62 0.35 0.72 10.69 100.0% Percentage of Total Costs 90.0% 3.3% 6.7% 100.0%

4.9.2. The ADF resources will be used to finance all the categories of expenditure, with 72.66% of the funds to be used to pay for the services of seconded specialists in regional planning and development in Southern Sudan and in the five identified states of Northern Sudan. In support of the project’s capacity building activities 19.75% of ADF funds will also finance the acquisition of indispensable goods (equipment, computers, vehicles, furniture etc.) for the strengthening and refurbishing of the governments’ beneficiary institutions. As shown in table 4.7, 67.57% of the grant resources will be spent in the South and 32.43% in the North. 4.9.3 The GoNU and GoSS’s contribution will be entirely used to finance part of the project’s Operating Costs category of expenditure. The GoNU will finance 23.65% of the project’s overall operating costs, which represents 64.81% of the project’s operating costs in Northern Sudan. The GoSS’s contribution will finance 48.65% of the project’s overall operating costs, representing 76.60% of the project’s operating costs in Southern Sudan. The operating costs to be covered by both governments are mainly operating costs of the PMUs in the South and in the North, costs related to training seminars’ organization, transportation cost of trainees, and all the recurrent costs associated with the logistical support provided under the project and the training facility and government offices rehabilitated/constructed by the project. 4.9.4 The project will be implemented over 3 years and will be in accordance with the schedule of expenditure for each category of expenditure and component as shown in tables 4.8 and 4.9) below. 48% of the project costs will be spent in year I; 45% in year II, and 8% in year III. This programming takes into account launching and completion constraints.

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Table 4.8. Expenditure Schedule by Source of Finance (UA Million.)

SOURCE OF FINANCE 2007 2008 2009 Total % T.Costs The GoSS 0.23 0.28 0.21 0.72 6.7% The GoNU 0.12 0.17 0.06 0.35 3.3% ADF 4.79 4.28 0.55 9.63 90.1% TOTAL PROJECT COSTS 5.14 4.74 0.81 10.69 100.0% Percentage of Total Costs 48.1% 44.3% 7.6% 100.0%

Table 4.9: .Expenditure Schedule by Category of Expenditure (UA Million.) CATEGORIES OF EXPENDITURE 2007 2008 2009 Total % T. Costs A. Works 0.26 0.06 - 0.32 3.0% B. Goods 1.03 0.88 - 1.90 17.8% C. Services 3.37 3.21 0.41 6.99 65.4% D. Operating Costs 0.48 0.59 0.41 1.48 13.8% TOTAL PROJECT COSTS 5.14 4.74 0.81 10.69 100.0% Percentage of Total Costs 48.1% 44.3% 7.6% 100.0%

V PROJECT IMPLEMENTATION 5.1 Executing Agency

5.1.1. The MOFNE in Khartoum will be the global Executing Agency of the project and will serve as the Bank’s main contact institution during the implementation of the project. The institutional capacity of Sudan is in general weak, particularly in Southern Sudan. In such a context, a PMU is necessary to ensure the efficiency of the project activities. In conformity with the “One-Country-Two Systems” institutional arrangement of the CPA, two Project Management Units (PMUs) will be established for the daily management of the project activities: one in Khartoum within the MoFNE and the other in Juba within MOLPSHRD. Resources will be made available to facilitate collaboration, networking and exchange of experience between the two PMUs. The PMUs will not be stand-alone structures, but will be part of government's structures and will operate within government's policy and strategic framework. In the North, the PMU will be part of the Department of macro-economic reform of the MoFNE. The PMU South will be fully integrated to the Directorate for Capacity Building of the Ministry of Labour and Public Services. 5.1.2. Each PMUs will comprise the following full time staff appointed by GoNU and GoSS respectively: a Project Manager, an Accountant, a Procurement Officer, a Secretary, a Messenger, a Driver and a Technical Assistant. The project manager will report to the Steering Committee in the North and to the Task Force in the South. S/he will be responsible for the following activities:

• Co-ordination of the project' activities at technical and administrative levels: s/he will be in contact with all institutions involved in the implementation of the project, as beneficiaries or as service providers;

• Procurement and disbursement activities as well as all contacts with the Bank; • Submission of progress reports; • Organisation of internal and external auditing and evaluation as well as workshops.

5.1.3. The project Accountant will maintain the project’s accounts and submit to the ADF, a quarterly report on the use of the project resources. The Procurement Specialist will be in charge of recruitment procedures, tenders and all procurement activities. S/he will ensure that Bank rules and regulations are respected. The technical assistant will provide backstopping services to the PMU. The support staff (Secretary, Messenger, and driver) will provide day-to-day assistance to the management of the project. In the period precedent to the recruitment of the project manager and accountant, the Co-ordinator of the PESP Unit at the MoFNE will handle the selection process of the project staff in North, as well as all contacts with the Bank. In the South, the Undersecretary of the

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Ministry of Labour will be responsible for these activities. The Terms of Reference (ToRs) of the main project staff including the technical assistant will be included in the PID. 5.2 Institutional Arrangements

5.2.1. The overall executing agency of the project is GoNU's MoFNE. In the North, the existing Steering Committee (SC) of the PESP process will steer and co-ordinate activities of the project. In the South, a Steering Committee coordinated by the MoLPSHRD in close collaboration with the MoFNE and the Ministry of Regional Cooperation, will oversee the project activities. The I-PESP process will be led by the Directorate of Planning in MoFEP. However, to avoid overloading the existing institutions, an I-PESP Unit will be set up within the Department of Sectoral Planning to deal with the daily implementation of the I-PESP activities. The technical assistance to be provided will be operating in the framework of the PESP-Unit, under the responsibility of the Department of Sectoral Planning. 5.2.2. To ensure compliance with GoSS's policies and processes, the Steering Committee (SC) of the project will comprise also representatives of the existing ten Budget Sector Working Groups whose objectives are to formulate general policies and planning, management and coordination at all levels of government of Southern Sudan. To ensure appropriate participation in the Southern I-PESP process, the Steering Committee will be extended to representatives of relevant Independent Commissions and Chambers and to the Civil Society. The focal point (lead institution) for the implementation of the activities under component II will be GoSS's Secretariat General which leads the Under-Secretaries' Forum in Southern Sudan. 5.2.3. All project activities will be implemented by the PMUs in close collaboration with the concerned ministries; except the household surveys which will be implemented in North by CBS and in South by SSCCSE. Activities under component II related to secondment of experts to the ten Southern States will be implemented by UNDP South Office as a procurement agent. An MOU will be signed between CBS and GoNU in the North, and between UNDP, SSCCSE and the GoSS in the South. Details of these interventions will be indicated in the MOU, which will be included in the Project Implementation Document (PID). 5.3 Implementation and Supervision Schedule 5.3.1. The project duration is estimated at thirty six (36) months after entry into force of the grant agreement. The implementation schedule in Annex 3 gives the tentative timing of the various activities of the project. Administration activities are summarised as follows:

Indicative Implementation Schedule Activities Agency Date 1. Board presentation ADF February 2007 2. Publication of General Procurement Notice ADF/Govt March 2007 3. Grant Signature ADF/Govt March 2007 4. Designation of the project staff Govt April 2007 5. Launching mission ADF/Govt May 2007 6. Entry into force ADF/Govt May 2007 7. Signature contract with UNDP/CBS/SSCCSE PMU June 2007 8. Designation of PESP Task Force in Juba GoSS June 2007 9. Recruitment of Technical Assistants PMU/UNDP July 2007 10. Elaboration Operation Manuals PMU July 2007 11. Elaboration M&E and coordination plan PMU July 2007 12. Procurement of equipments PMU/UNDP July- Dec 2007 13. Completion of Training/workshop Programme PMU Sept 2007 14. Completion of the quick Surveys PMU/CBS/SSCCSE December 2007

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15. Training incl. study tours PMU July-07-Dec 08 16. Mid-term review PMU Sept 2008 17. First Annual audit report PMU June 2008 18. Completion of the two I-PESPs PMU/PESP Units Dec. 2008 19. Completion of the national PESP PMU/GoNU/GoSS June. 2009 20. Final Audit Report Govt June 2010 5.3.2. In addition to the normal supervision missions (twice a year), a mid-term review couples with an external evaluation will take place in September 2008. 5.4 Procurement of Goods, Works and Services

5.4.1 Procurement arrangements are summarized in Table 5.1. All procurement of goods and acquisition of consulting services financed by the Bank will be in accordance with the Bank’s “Rules of Procedure for Procurement of Goods and Works” or, the “Rules of Procedure for the Use of Consultants”, using the relevant Bank Standard Bidding Documents.

Table 5.1: Procurement Arrangements (UA million)

CATEGORIES NCB SHORT

LIST NATIONAL SHOPPING OTHER

N. B. F. TOTAL

1. CIVIL WORKS: 0.32[0.32 1.1. Construction of Training Facility, rehabilitation of

offices for PMU-North 0.32[0.32] 0.32[0.32]

2. GOODS: 1.90[1.90] 2.1. All equipment, furniture, vehicles, computers and

accessories of the project for PESP-N and PESP-S;1.59[1.59] 1.59[1.59]

9 Commissions, for 5 States and training facility All equipment, furniture, vehicles, computers and accessories of for PMU-N and PMU-S)

0.31[0.31] 0.31[0.31]

3. SERVICES: 6.99[6.99] 3.1. Base-line household surveys (CBS - North and

SSCCE-South) 1.25[1.25] 1.25[1.25]

3.2 Consulting services for updating I-PESP-N & developing I-PESP-S

1.74[1.74] 1.74[1.74]

3.3 Abroad training & Study Tours 0.02[0.02] 0.02[0.02]3.4. Workshops for national PESP 0.02[0.02] 0.02[0.02]3.5. Design development and supervision for

construction and rehabilitation of training facility and PMU-N office

0.07[0.07] 0.07[0.07]

3.6. Consulting services for technical support to Commissions & Undersecretaries in the South

0.60[0.60] 0.60[0.60]

3.7. Design & implementation of Executive training in the South

0.48[0.48] 0.48[0.48]

3.8. Development & Implementation of the PIS 0.09[0.09] 0.09[0.09]3.9 Development & Implementation of Procurement

training in the South 0.14[0.14] 0.14[0.14]

3.10. Support to GoSS 10 States - UNDP 1.75[1.75] 0.23[0.23] 1.98[1.98]3.11. Project Management Backstopping, Operations

Manual and external evaluations – North and South

0.43[0.43] 0.43[0.43]

3.12. Auditing Firm for annual Project accounts audit – North and South

0.12[0.12] 0.12[0.12]

3.13 PCR & Midterm Review in South & North 0.06[0.06] 0.06[0.06]4. OPERATING COSTS 0.41[1.48]

4.1. Project Management, support staff, transport, workshops, PMU training, meetings, vehicle and equipment maintenance, communication, sundries

0.41[0.41] 1.07 0.41[1.48]

TOTAL 1.91[1.91 5.48[5.48] 0.31[0.31] 1.92[1.92] 1.07 10.69[9.62]NCB means National Competitive Bidding. *Others include National Shopping, Direct Negotiation. Figures in brackets [..] are amounts financed by ADF Grant

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A. Works

5.4.2 Procurement of civil works valued in aggregate at UA 0.32 million will be awarded through NCB under two (2) packages for: i) the construction of a new training facility of the MoLPSHRD estimated in average at UA 0.30 million; and ii) the rehabilitation of offices facilities for the PMUs in the North (UA 0.02 million). The difficult location and the character, size and value of the construction works to be undertaken are such that they are unlikely to attract international bidders. There are local contractors in Sudan sufficiently qualified and in a number sufficient to ensure competitive bidding. B. Goods

5.4.3 All equipment, furniture, vehicles, computers and accessories for the updating of the I-PESP-N and development of the I-PESP-S, the support to the 9 Independent Commissions, the 22 Undersecretaries, the 10 Southern Sudan States, the piloting of the Procurement Information System, and for the training facility of the MoLPSHRD valued in aggregate at UA 1.59 million will be procured through National Competitive Bidding (NCB) in under eight (8) packages (estimated at a maximum of UA 0.20 million/package). Given the limited cost of each package of goods and the dispersed nature of their difficult delivery locations around the country, it is unlikely that these activities will attract international tenders. There are also local suppliers sufficiently qualified and in a number sufficient to ensure competitive bidding. However, the advertisement of the different Invitations to Bid will be put in a newspaper of general circulation in the COMESA region to attract foreign suppliers that would wish to participate. 5.4.4 Other various items will be procured through other procedures, as follows:

Table 5.2: Other Modes of Procurement (in UA mill)

UA ‘000 Procedure Activities Maximum per contract Maximum per aggregate

National Shopping All equipment, furniture, vehicles, computers and accessories of for PMU-N and PMU-S)

0.03 0.31

5.4.5. All equipment, furniture, vehicles, computers and accessories of for PMU-N and PMU-S under eight (8) packages valued in aggregate at UA 0.31 million, which is required at the initial project’s implementation stage, would be procured through National Shopping (NS) procedures. The items are standard and readily available off-the-shelf goods, which can be purchased locally. These are also small contracts, which would not attract international bidders. Agents of qualified foreign suppliers shall be invited to bid under NS to ensure competition and fairness. C. Consulting services and training

5.4.6 Procurement of consulting and training services by firms valued at UA 3.24 million, will be undertaken in accordance with Bank’s “Rules of Procedure for the Use of Consultants” through shortlist based on technical quality with price consideration. When the amount is less than UA 0.35 million, the Grantee may limit the publication of the announcement to national or regional newspapers. However, any eligible consultant, being regional or not, may express their desire to be short-listed. These services shall include firms recruited for the following: i) preparation/ finalization of the I_PESPs for North and South (UA 1.74 million); ii) design development and supervision for construction and rehabilitation of training facility and PMU-N office (UA 0.07 million); iii) support to GoSS’s 22 undersecretaries and 9 commissions (UA 0.60 million); iv) design & implementation of executive training in the South (UA 0.48 million); v) development & implementation of the PIS (UA 0.09 million); vi) development & implementation of procurement training in the South (UA 0.14 million); and vii) and annual accounts auditing for North and South (UA 0.12 million).

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5.4.7 Procurement of individual Technical Assistance valued at UA 2.24 million in aggregate will be undertaken through shortlist in accordance with Bank’s “Rules of Procedure for the Use of Consultants (Use of Individual consultants by Borrowers)”. These services will include: i) Support to GoSS’s 10 States (UA 1.75 million); ii) project management backstopping, Operations Manual and external evaluations in the North and South (UA 0.43 million); and iii) elaboration of PCR and midterm review (UA 0.06 million). Each contract's amount being less than UA 0.35 million, the Grantee may limit the publication of the announcement to national or regional newspapers. However, any eligible consultant, being regional or not, may express their desire to be short-listed. 5.4.8 The national Baseline household survey valued at UA 1.08 million in aggregate will be conducted by the CBS in collaboration with the SSCCE in the South through single-source selection, as these are the government institutions mandated solely to undertake such assignment. SSCCE will undertake the household survey’s preparatory work in the South estimated at UA 0.17 million. Both institutions CBS and SSCCE have the capacity and experience to conduct the surveys. Technical Assistance to the Support to GoSS’s 10 States valued at UA 1.75 million indicated in paragraph 5.4.7, will be managed by UNDP as a procurement agent (UA 0.23 million) through single-source selection because UNDP is already carrying out similar services for the 5 southern states under LGRP and these services will represent continuity in a difficult location, for effective Project implementation. UNDP and SSCCE will sign Memoranda of Understanding (MOUs) with the GoSS and CBS with GoNU, which would have prior approval of the Bank. 5.4.9 Workshops, study tours, and external training valued at UA 0.04 million in aggregate will be procured through Direct Negotiations with specific institutions with relevant experience. The proposed institutions to conduct the training (with the justifications of their selection) and proposed programs will be submitted for ADF approval prior to the implementation of the training activities. The proposed programs will be submitted semi-annually for ADF approval D. Operating Costs

5.4.10 Operating costs to cover top-up salaries for Government employees, support staff, workshops, meetings, vehicle and equipment maintenance, IEC and outreach activities, coordination between North and South, PMU adhoc training, stationery, telecommunications, travel and miscellaneous PMU costs in the aggregate amount of UA 1.48 million shall all be procured through Direct Negotiations and Government Procedures. National Procedures and Regulations

5.4.11. The national procurement laws and regulations of Sudan have been reviewed and determined to be acceptable to the Bank. There are going however to be reformed under the Bank-financed ¨COMESA Enhancing Procurement Reforms and Capcity Project¨ to harmonize them with the new modern regional public procurement system developed by COMESA. The newly approved GoSS Interim Public Procurement and Disposal Regulations, 2006, prepared with the World Bank’s assistance, bassically replicated the World Bank’s Procurement ruless and are therefore consistent with international procurement standards. The national procurement laws and regulations of Sudan will be applied for the procurement of office supplies and consumables and other operating costs of the PMUs. Executing Agency

5.4.12. The PMUs (in North and South) will be responsible for the procurement of goods, consulting and training services to ensure compliance with Bank requirements before forwarding them to the Bank for approval. They will also be responsible for the activities implemented by other agencies such CBS, SSCCSE and UNDP. The existing resources, capacity and expertise for the PMUs are inadequate to carry out the procurement and the other project’s activities. Therefore, each of them will be strengthened with technical assistance. GoNU and GoSS will select and appoint their respective PMU staff in compliance with the non-objection rule of the Bank. In addition to this, a multi-lateral procurement environment has already been established in the operating procedures of

30

both GoNU and GoSS by the predominant financial mechanism of the MDTF and CBTF. This environment will provide a supportive context in which major procurement activities will occur. General Procurement Notice

5.4.13. The text of a General Procurement Notice (GPN) will be agreed upon with both the GoNU and GoSS and it will be issued for publication in Development Business, upon approval by the Board of Directors of the Grant Proposal. Review Procedures

5.4.14. The following documents are subject to review and approval by the Bank before promulgation:

• Specific procurement notices; • Tender documents or requests for proposals from consultants; • Short lists, requests for proposal from consultants; • Tender Evaluation Reports or Reports on Evaluation of Consultants’ Proposals, • Draft contracts, if these have been amended from drafts included in the tender documents; • Training plans for the staff concerned.

5.5. Disbursements

The direct payment method and the special account method will be used. The GoNU will open a special account in a bank acceptable to the ADF for disbursements related to the implementation of project activities in the North. The GoSS will open a special account in a bank acceptable to the ADF for disbursements related to the implementation of project activities in the South. Both accounts will be foreign exchange accounts to meet the expenses required to finance ADF components in the project. These accounts will be used for the ADF contribution only. ADF will make an initial deposit to cover the cost of four months of expenses. The account will be replenished in compliance with Bank rules at the request of each Executing Agency. 5.6 Monitoring and Evaluation

5.6.1 Monitoring and evaluation (M&E) activities will be considered crucial for the successful implementation of the project activities. In the first six months of the project, an M&E methodology and program including key indicators will be developed to guide the project implementation process in the North and in the South. In addition to regular supervision by the Bank, two M&E experts (one for the North and the other for the South) will be recruited to conduct a comprehensive evaluation of the project as part of the mid-term review process scheduled for September 2008. The project matrix and the table 4.1. of the outputs by component, will serve as basis for the M&E activities. The Terms of Reference of M&E experts to be recruited will be included in the Project Implementation Document (PID). 5.6.2 In the North, the MoFNE will, through the Steering Committee, oversee the implementation of the project. The PMU will be responsible for submission to the ADF of quarterly progress reports, in conformity with ADF requirements. In the South, the MoLPSHRD (Undersecretary) will through the PESP Task Force, oversee the project implementation. The PMU South will also be responsible for submission to the ADF of quarterly progress report. 5.7. Financial Reporting and Auditing

The two project managers will keep separate accounts for the project indicating expenditure by component, category and source of financing. External auditors will audit separately these accounts once a year and audit reports will be forwarded to the Fund. Both PMUs will be accountable for submission of annual financial and audit reports. The final external audit will take place in June 2010.

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5.8. Aid Co-ordination

5.8.1. The main framework for donors support and coordination in Sudan is the MDTF, established after the Oslo donor conference. Given the fact that MDTF is also operating in the area of capacity building, the project will work in close collaboration with the secretariats in North and South. In the South, a Donor Reference Group on Capacity Building coordinated by the World Bank (LICUS) has been established at the Ministry of Labour to harmonise donors’ activities in the area. Coordination of the project’s activities with this reference group will be a priority to avoid duplication and ensure efficiency. UNDP is lead in the area of capacity building in the South. Regular coordination meetings will be held with this institution, particularly with regard to support to the states. With regard to the PESP process, donor support is coordinated by UNDP. The Bank has joined since August 2006 the donors' group that provide support to the PESP process. It comprises UNDP, the IMF, WB, DFID, the EU and the Bank. The Bank is also member of the Darfur CCG which oversees the implementation of the Darfur JAM. This structure provides the opportunity for coordination and harmonisation of donors with regard to Darfur. In general, co-ordination mechanism in Sudan will include the following:

• Participation in Darfur CCG activities; • Participation in the Donor Reference Group on Capacity Building in the South; • Regular presence in Sudan through supervision and dialogue missions, attendance at events

organised on poverty related issues in the country; • During missions, systematic visits to donor representatives, in particular to UN-agencies

represented in the country; • Exchange of information with the BWIs, the EU, USAID, the Islamic Development Bank

and the Arab Funds. 5.8.2. To strengthen co-ordination of project activities, resources have been earmarked to finance joint activities of both PMUs and of CBS and SSCCSE such as retreats and workshops, and to harmonise the methodology of baseline household surveys and that of the PESP process. Both PMUs will consult every 6 months to prepare joint training programs and joint study tours. Ad-hoc consultations will be encouraged as necessary. The Bank supervision missions will provide opportunities for systematic consultation between the PMUs on project implementation issues. VI. SUSTAINABILITY AND RISKS 6.1 Recurrent Expenditure and Costs

The project will generate minimum recurrent expenditure. The staff of both PMUs will be civil servants already on the government payroll. The training programs will target exclusively civil servants in service. Non-recurrent recruitment of technical assistance, short-term consultants, in-country training and training abroad, procurement of equipment and related expenditure, as well as the operating costs of the PMU will be financed by the project. The recurrent expenditures for equipment maintenance - mainly vehicles, and consumables, will be partially borne by GoNU and GoSS during implementation and fully, after Project completion. In addition to these, it is expected that GoSS will include an annual operating and maintenance expenditure, estimated initially at UA 67,000 per annum (approximately USD 100,000) in its recurrent budget to cater for the training facility and the Procurement Information System. Renting out the training facility and charging the private sector for part of the information provided by the PIS should substantially offset this budget, and ideally provide additional revenue given the potential market demand as assessed during appraisal. 6.2 Sustainability of Project Impact

Maintaining sustainability once the project is completed is a particularly important risk in institutional support projects. In recognition of this, the Bank will continue dialogue with GoNU and GoSS on issues related to governance and the peace process, and more specifically in the areas of

32

capacity building and decentralisation. The dialogue and consultation will address constraints, which the Authorities face in retaining skilled and trained personnel, and in meeting their operating costs. Some of the measures built in the project to facilitate sustainability include: emphasis on long term poverty eradication strategy through updated household data and the achievement of a national PESP which will be a major instrument for macro-economic reforms, good governance practices, poverty reduction and development cooperation in the coming years. Sustainability will also be built through the strengthening of the capacity of decentralised states to deliver basic services to the population, focus on professional and skills training, on-the-job training and training of trainers. 6.3 Major Risks & Mitigating Measures

6.3.1. The persistence of the crisis in Darfur despite the DPA is another risk for the project. The project activity likely to be affected by this crisis is the household survey. This is particularly true for some rural areas of Darfur where access will be difficult because of the prevailing insecurity. This risk factor will be taken into account in the methodology of the household survey. Moreover, the Bank will continue playing a role in the Darfur JAM with the World Bank and the UN. The Darfur JAM was prepared with a conflict analysis framework of Sudan in mind to ensure that proposed JAM activities do not in themselves trigger renewed conflict. 6.3.2. The weak implementation capacity, combined with a general desire on part of GoNU and GoSS to rely primarily on the public sector or national technical and project management services could result in slow progress in achieving the project’s objectives. This risk is being mitigated by emphasis on medium and long term technical assistance and secondment. 6.3.3. The weak knowledge of Bank rules and procedures by GoNU and GoSS staff is also another risk. A training program targeting government’s staff will be supported by the project to strengthen the knowledge of Bank rules and procedures in Sudan. 6.3.4. The risks of corruption and mismanagement of grant resources exist in Sudan. These risks will be mitigated through an objective selection of project staff, the recruitment of experienced procurement officers, regular auditing of the project in accordance with Bank rules and procedures and external evaluation. A mid-term review will take place in December 2008 and will offer an opportunity to have an in-depth assessment of the project management. Bank staff will maintain close contact with all stakeholders in order to gather information on the project from a variety of sources. Box 4 presents a range of anti-corruption measures that will be undertaken by the Bank in collaboration with both Governments

Box 4: Anti-Corruption Measures during Project Implementation During Project implementation, the Bank Task-team will constructively engage the GoNU, the GoSS and their respective Project Management Unit and collaborate with them to:

1. Promote transparency and empower stakeholders with information, and consistent with Bank Information Disclosure Policy, the Bank will publish on is web-site all disbursements made to the project, in real time

6. Undertake to jointly screen and verify the integrity of staff being recruited for the PMUs

2. Ensure that all procurements made under Bank-financed project are publicly disclosed

7. Assess a-priory the financial management capacity of new PMUs and ensure their capacity to handle project financial accounting and auditing requirements. Where appropriate, organize financial management, procurement and audit seminars for PMUs staff, to be conducted prior to implementation and repeated during implementation, as needed

3. Work to strengthen the demand side for transparency and accountability by pro-actively engaging reformers and other stakeholders (CSOs, media, watchdog groups) to monitor and report on progress

8. Increase number of supervision visits, including visits to regions to observe and monitor progress and inspection of items purchased under the project.

4. Periodically consult with other partners, and where possible jointly monitor project progress. Collect information from third-parties and carryout joint analysis of project progress and effectiveness

9. Plan for regular and timely progress and financial reports from the PMUs, including explanations and analysis of deviations from plans or unusual expenditures. Ensure regular independent audits to initiate timely remedial measures, where necessary, and safeguard against fiduciary risks

5. Periodically monitor developments in governance and anti-corruption activities in Sudan that may have a bearing on the project

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during project’s implementation in order to mitigate the risk of corruption and mismanagement of the Grant funds. VII. PROJECT BENEFITS AND SOCIAL IMPACT

7.1. It is expected that project activities will strengthen the ability of the national institutions to make concrete and effective contributions to macro-economic reforms, improvement of public financial management, and good governance practices in general. The support will in particular contribute to strengthen the ability of the institutions to improve daily service delivery to the population, and to co-ordinate and monitor the implementation of programs. 7.2. The national PESP will be a major instrument for macro-economic reforms, good governance practices, poverty reduction and development cooperation. It will provide a long term framework for poverty reduction activities in Sudan. Through the quick surveys to be implemented by CBS and SSCCSE, the project will generate more reliable and up to date information. Thus, the implementation of the PESP process will be facilitated and its quality ensured. In addition, macro-economic strategies, poverty reduction programmes and projects will be better planned, implemented, co-ordinated and evaluated. 7.3. Gender issues will be better mainstreamed into government's policies due to the availability of disaggregated data. By supporting the states, the project will consolidate the decentralisation process, which is central to development and poverty reduction at community level, with a clear impact on the betterment of the living condition of women and children. The strengthening of the capacity of states will also improve their ability to resettle the IDPs in their home villages, among which women outnumbered men and are most vulnerable. 7.5. Through large-scale training, the project will create a critical mass of trained personnel and increase national capacity on social and economic analysis, and Government responsiveness to the needs and priorities of the population. 7.6. The South, which lacks basic infrastructures, national and sector policies, will benefit from an institutional framework for poverty reduction, with positive impacts on the living conditions of the population. The adoption of an engendered PESP as Framework for development activities and the strengthening of the capacity of the states will have positive impact on the leaving condition of women and children. VIII CONCLUSIONS AND RECOMMENDATIONS

8.1 Conclusions

The project is in conformity with Bank Strategy, as expressed in the Country Dialogue Paper approved in July 2006, which makes institutional capacity building a key component of Bank initiatives for Sudan for the coming years. It also conforms to the Vision of the Bank, which focuses on good governance, macro-economic reforms and poverty reduction. In Sudan, despite progress in economic performance in recent years, the living conditions of the population are not improving. Among the main constraints impeding efforts by the GoNU and GoSS to reverse the upward trend of poverty are the costs of the continuing civil war which divert government resources from investing in the social sector, and the lack of capacity to make a clear diagnosis of the poverty situation in the country and elaborate a comprehensive strategy for poverty reduction accompanied by coherent action plans. Through training, provision of technical assistance and equipment, the project aims at building capacity of national institutions involved in macro-economic reforms and poverty reduction. The project will thus contribute to increasing the country’s capacity to effectively mainstream poverty and good governance in national and local development strategies within a coherent macroeconomic set-up, and to prepare and implement the full PESP process.

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8.2 Recommendations

It is recommended that a grant not exceeding UA 9.62 million be made available to the Republic of Sudan as outlined in this report to strengthen the capacities of institutions involved in poverty reduction activities, in particular in the implementation of the full PESP process. The grant will be subject to the following conditions:

A. Conditions Precedent to Entry into Force The Protocol of Agreement shall enter into force on its signature by the Recipient and ADF.

B. Conditions Precedent to First Disbursement

Prior to the first disbursement, the Recipient (GoNU and GoSS) shall, submit evidence satisfactory to the ADF, of:

I. The selection and appointment of the Project Managers in North and South (para. 5.1.2.)

II. The opening in the North and in the South of special accounts in financial institutions acceptable to the ADF, on terms and conditions acceptable to the ADF, to receive the proceeds of the Grant. (para. 5.5.).

Other Conditions

In addition: I. The GoNU will provide within a period of three months after entry into force a written

evidence of the designation of the existing PESP process Steering Committee chaired by the State Minister for Finance and National Economy as the project Steering Committee, and will remain active and in effect during the period of Project implementation (para. 5.2.1.).

II. The GoSS will provide within a period of three months after entry into force a written

evidence of the setting up of a Task Force at the Ministry of Labour and Public Service in Juba to oversee the implementation of the project activities in the South (para. 5.2.1.)

III. The GoNU and GoSS will provide within a period of three months after entry into force a

written evidence of the selection and appointment of the project accountant, the procurement Officer and the remaining project staff (5.1.2.).

IV. The GoSS will provide to the ADF within a period of six months after the entry into force of

the grant agreement, a written evidence of the signature of a MOU between UNDP South Office and the PMU South for the implementation of the activities related to the technical support to five of the ten Southern states (para. 5.2.3.).

V. The GoSS will provide to the ADF within a period of three months after the entry into force

of the grant agreement, a written evidence of the signature of a MOU between the SSCCSE and the PMU South for the implementation of the quick base line household survey (para 5.2.3.).

VI. The GoNU will provide to the ADF within a period of three months after entry into force of

the grant agreement, a written evidence of the signature of a MOU between the CBS and the two PMUs for the implementation of a quick base line household survey (5.2.3.).

ANNEX 1 Page 1/1

MAP OF SUDAN

ANNEX 2

Page 1/1 ORGANISATION CHART

FEDERAL MINISTRY OF FINANCE AND NATIONAL ECONOMY [NORTH]

STATE MINISTERBudget and Finance

PMUProject Manager

AccountantProcurement Officer

PRSP UNIT

PRSPSupervision Committee

STATE MINISTERInternational Cooperation

STATE MINISTERResource Sector

STATE MINISTERRural and South Development Sector

FEDERAL MINISTER

ANNEX 3 Page 1/1

ORGANISATION CHART

ANNEX 4

Page 1/1

PROJECT IMPLEMENTATION SCHEDULE

ACTIVITIES 2007 2008 2009 2010 1 Launching 2 Project Management Units N/S 3 Operation Manual/M&E Plan 4 Procurement of equipments 5 Procurement of services 6 Household survey N/S 7 PESP activities in N & S 8 Trainings/study tours 9 Procurement related activities 10 Support to the states 11 Mid-term review 12 Annual Audit 13 Project completion report

ANNEX 5 Page 1/1

LIST OF ACTIVITIES FUNDED BY THE MDTF

A. MDTF National Portfolio (North) 1. Community Development Fund Project: Budget in US$: 50 million. MDTF: 30 million 2. Technical Assistance Facility: Budget in US$: 5million. MDTF: 5 million 3. Capacity Building of the Judiciary: Budget in US$: 18 million. MDTF: 13 million 4. Fifth Population Census: Budget in US$: 66.62 million. MDTF: TBD 5. Interim DDR Program: Budget in US$: 69.5 million. MDTF: TBD 6. National Emergency Transport Project: Budget in US$: 80 million. MDTF: 50 million 7. Public Service Reform, Decentralisation and Capacity Building: Budget in US$: 24 million. MDTF: 8 million. B. MDTF Portfolio South 1. Rapid Impact Emergency Project: Budget in US$: 27 million. MDTF: TBD 2. Emergency Transport and Infrastructure Development Project: Budget in US$: 777 million 3. Southern Sudan health Umbrella Program: Budget in US$: 225 million. MDTF: TBD 4. Multi-donor Education Rehabilitation Project: Budget in US$: 543 million. MDTF: TBD 5. Core Fiduciary Systems Support Project: Budget in US$: 6 million. MDTF: TBD 6. Establishment of Support Services to Agricultural and Forestry Sectors Project: Budget in US$: 46 million. MDTF: TBD 7. Capacity Building to Livestock and Fisheries Sectors Project: Budget in US$: 42 million. MDTF: TBD 8. Capacity Building Institutional Development and Human resources Development in Southern Sudan: Budget in US$: 11.5 million. MDTF: TBD 9. Strengthening Sector Capacity to Deliver Sustainable Water and Sanitation Services: Budget in US$: 80 million. MDTF: TBD

ANNEX 6 Page 1/1

SOUTHERN SUDAN

MAIN AREAS OF DONORS’INTERVENTION

ACTIVITIES MDTF CBTF USAID WB/LICUS UNDP DFID Norway BENEFICIARIES Oil revenue policy/management

X X Joint Oil Committee/Budget Core Team

Public financial management

X X X X Taxation Department Undersecretaries

Budget Preparation X X X Budget Core Team Procedures for public expenditure

X Budget Core Team

Pay-roll and payment system

X Treasury Department

Procurement X Undersecretaries Audit X X Undersecretaries/Accou

nts Department Management strategies

X X Undersecretaries

Governance X Core Budget Team

ANNEX 7 Page 1/1

LIST OF MAIN DONORS OF THE MDTF

Pledge in million US$ as of 7/31/06

Countries/Organisations Total Netherlands 195.0 Norway 100.0 United Kingdom 80.7 Saoudi Arabia 50.0 European Commission 45.5 Canada 34.4 Sweden 28.6 Germany 26.0 Finland 12.0 Denmark 15.0 World Bank 10.0 France 7.2 Italy 5.2 Egypt 1.0 Iceland 0.5 Arab League 0.2 Greece 0.1 Canada TOTAL 611.3

ANNEX 8 Page 1/3

LIST OF GOODS AND SERVICES LIST OF GOODS AND SERVICES GoSS % GoNU % ADF % TOTAL % F. E. L. C. WORK 0.00 - - - 0.32 100.0 0.32 3.0 0.28 0.04 GOODS Computer related equipment - - - - 0.42 100.0 0.42 3.9 0.42 - Office Equipment 0.00 - - - 0.56 100.0 0.56 5.2 0.54 0.02 Vehicles & Spare parts - - - - 0.68 100.0 0.68 6.3 0.68 - Office Furniture 0.00 - - - 0.16 100.0 0.16 1.5 0.13 0.03 Other Goods - - - - 0.09 100.0 0.09 0.9 0.09 - Subtotal GOODS 0.00 - - - 1.91 100.0 1.91 17.8 1.86 0.04 SERVICES Technical Assistant - - - - 1.75 100.0 1.75 16.4 1.75 - Technical & Architectural design and supervision - - - - 0.07 100.0 0.07 0.7 0.07 - Consultancy services for Capacity building & studies - - - - 3.36 100.0 3.36 31.5 3.36 - Consultancy services for assessment & surveys 0.00 - - - 0.72 100.0 0.72 6.7 0.68 0.04 Consultancy serv. design & implem. Training - - - - 0.86 100.0 0.86 8.0 0.86 - Consultancy service for training - - - - 0.04 100.0 0.04 0.4 0.04 - Audits - - - - 0.12 100.0 0.12 1.1 0.12 - Consultancy services for midterm review & PCR - - - - 0.06 100.0 0.06 0.6 0.06 - Subtotal SERVICES 0.00 - - - 6.99 100.0 6.99 65.4 6.95 0.04 OPERATING COSTS Allowances 0.40 81.0 0.09 19.0 - - 0.49 4.6 - 0.49 Transportation 0.06 80.1 0.02 19.9 - - 0.08 0.7 - 0.08 Increments 0.04 18.8 0.04 18.8 0.14 62.5 0.22 2.1 - 0.22 General Operating Costs 0.06 11.2 0.18 35.1 0.27 53.6 0.50 4.7 - 0.50 Operating & maintenance of vehicles 0.09 84.3 0.02 15.7 - - 0.11 1.0 - 0.11 Operating & maintenance of computer and accesories 0.02 84.7 0.00 15.3 - - 0.02 0.2 - 0.02 Operating & maintenance of office equipment 0.03 97.5 0.00 2.5 - - 0.03 0.3 - 0.03 Operating & maintenance of furniture 0.00 91.6 0.00 8.4 - - 0.01 0.1 - 0.01 Operating & maintenance of building 0.01 90.8 0.00 9.2 - - 0.01 0.1 - 0.01 Subtotal OPERATING COSTS 0.72 48.6 0.35 23.8 0.41 27.6 1.48 13.8 - 1.48Total PROJECT COSTS 0.72 6.7 0.35 3.3 9.62 90.0 10.69 100.0 9.09 1.60

COSTS SUMMARY

Breakdown of Total Costs Total Costs by Source of financingUA Million UA Million

For. Local GoSS GoNU ADF COSTS SUMMARY BY COMPONENT AND SOURCE OF FINANCING Exch. Costs Total Total Total Total

Component I: Support to the preparation of the national PESP A. Updating I-PESP Northern Sudan Goods 0.06 - 0.06 - - 0.06Services 2.54 - 2.54 - - 2.54Subtotal Investment- Updating I-PESP Northern Sudan 2.60 - 2.60 - - 2.60B. Support to PESP Southern Sudan Goods 0.09 0.00 0.09 - - 0.09Services 0.53 0.04 0.58 0.00 - 0.58Subtotal Investment -Support to PESP Southern Sudan 0.63 0.04 0.67 0.00 - 0.67C. Recurrent Cost - Support to I-PESP Northern Sudan Operating Costs - 0.12 0.12 - 0.12 -D. Recurrent Costs - Support to I-PESP Southern Sudan Operating Costs - 0.08 0.08 0.08 - -TOTAL COSTS COMPONENT I 3.23 0.24 3.47 0.08 0.12 3.27

Component II: Strengthening Human & Institutional Capacity of Goss Works 0.27 0.03 0.30 - 0.30Goods 1.56 0.04 1.60 0.00 1.60Services 3.26 - 3.26 - 3.26Operating Costs - 0.53 0.53 0.53 -TOTAL COSTS COMPONENT II 5.09 0.60 5.69 0.53 5.15

Component III: Project management

A. Project Management Team in Northern Sudan Works 0.01 0.01 0.02 0.00 - 0.02Goods 0.07 0.00 0.07 0.00 - 0.07Services 0.25 - 0.25 - - 0.25Subtotal Investments in PMU-N 0.33 0.01 0.34 0.00 - 0.34B. Project Management Team in Southern Sudan Goods 0.08 - 0.08 - - 0.08Services 0.36 - 0.36 - - 0.36Subtotal Investment in PMU-S 0.44 - 0.44 - - 0.44C. Recurrent Costs for PMU-N Subtotal Operating Costs - 0.42 0.42 - 0.23 0.19D. Recurrent Costs for PMU-S Subtotal Operating Costs - 0.32 0.32 0.11 - 0.22TOTAL COST COMPONENT III 0.77 0.76 1.53 0.11 0.23 1.19

ANNEX 9

PROJECT PROCESSING SCHEDULE ACTIVITY DATE 1. Project Identification

August 2000

2. Project Preparation Mission

June 2004

4. Project Appraisal Mission 1

August 2004

Project Appraisal Mission 2

July 2006

5. Internal Working Group (IWG) Meeting

14 Sept 2006

9. Inter-Departmental Working Group Meeting

25 September 2006

10. Loans Committee Meeting

6 October 2006 22 December 2006

11. Board Presentation

28 February 2007

ANNEX 10 Page 1/1

TABLE OF BANK GROUP OPERATIONS (As of August 2006)

Sector name Project title Window Date of approval

Date of signature Effective Date Closing date Amount

Signed Disbursements Amount cancelled

Undisbursed Balance

Net comitment cancelled

Rate of withdrawal

Agriculture LIVESTOCK ADB 22-Mar-71 7-Dec-71 30-Jun-72 21-Dec-74 0.80 0.66 0.14 - 0.66 100%Agriculture AGRO ADB 24-Mar-78 19-May-78 7-Jan-81 31-Dec-87 4.60 4.67 (0.07) - 4.67 100%Agriculture PRODUCTION OF ADB 11-Sep-81 8-Oct-81 8-Mar-85 31-Dec-95 7.10 7.10 - - 7.10 100%Agriculture AGRICULTURAL ADB 19-Sep-88 9-Dec-88 22-Aug-89 30-Jun-94 16.90 16.89 0.01 - 16.89 100%Agriculture KENANA SUGAR ADB 17-Dec-90 17-Jan-91 23-Feb-93 31-Dec-98 18.61 15.77 2.84 - 15.77 100%Agriculture AGRICULTURAL ADB 27-Jan-92 11-Feb-92 26-Aug-92 31-Dec-96 28.00 25.69 2.31 - 25.69 100%Agriculture NEW HALFA ADF 29-Feb-80 26-Jun-80 23-Nov-82 31-Dec-95 7.60 7.54 0.01 0.04 7.59 99%Agriculture BLUE NILE ADF 18-Dec-80 10-Feb-81 17-Mar-88 31-Dec-95 7.64 7.55 0.09 - 7.55 100%Agriculture PRODUCTION OF ADF 10-Sep-81 8-Oct-81 19-Oct-82 31-Dec-96 7.37 6.37 1.00 - 6.37 100%Agriculture SOUTHERN ADF 15-Sep-87 24-May-88 14-Sep-89 31-Dec-95 15.52 8.97 6.55 - 8.97 100%Agriculture AGRICULTURAL ADF 19-Sep-88 9-Dec-88 5-Dec-89 31-Dec-95 50.75 50.54 0.21 - 50.54 100%Agriculture KENANA SUGAR ADF 17-Dec-90 17-Jan-91 19-Jan-93 31-Dec-98 13.82 7.29 6.53 - 7.29 100%Agriculture Total 178.71 159.05 19.61 0.04 159.10 100%Finance AGRICULTURAL ADF 30-Oct-81 30-Nov-81 13-Mar-87 30-Jun-94 7.37 7.29 0.08 - 7.29 100%Finance LINE OF CREDIT ADF 28-Oct-86 28-Nov-86 5-Apr-88 31-Dec-96 13.82 10.03 3.78 - 10.03 100%Finance INSTIT.SUPP.TO ADF 29-Jan-91 11-Dec-91 26-Jul-93 31-Dec-96 1.09 0.61 0.48 - 0.61 100%Finance Total 22.28 17.93 4.35 - 17.93 100%Ind/Mini/Quar SENNAR SILOS ADB 31-May-95 - - 1.64 - - Ind/Mini/Quar INDUSTRIAL ADF 4-Feb-93 30-Apr-93 2-Sep-94 30-Jun-97 0.39 0.30 0.09 - 0.30 100%Ind/Mini/Quar 0.39 0.30 1.73 - 0.30 100%Multi-Sector FEASIBILITY ADF 23-Mar-89 30-Jun-89 20-Aug-92 31-Dec-96 0.83 0.76 0.06 - 0.76 100%Multi-Sector FLOOD ADF 18-Jan-90 21-Feb-90 15-Jun-92 31-Dec-95 25.61 12.51 13.10 - 12.51 100%Multi-Sector FLOOD ADF 18-Jan-90 21-Feb-90 16-Nov-94 31-Dec-96 0.52 0.13 0.39 - 0.13 100%Multi-Sector INSTITUT.STRENG ADF 16-Dec-91 11-Feb-92 10-May-93 30-Sep-99 2.76 2.72 - 0.04 2.76 98%Multi-Sector Total 29.71 16.12 13.55 0.04 16.17 100%Power POWER PROJECT ADB 5-May-74 2-Jul-74 20-Dec-74 30-Jun-94 4.00 4.00 0.00 - 4.00 100%Power POWER PROJECT ADF 27-Nov-86 28-Nov-86 26-May-88 31-Dec-95 38.22 38.18 0.05 - 38.18 100%Power KHARTOUM ADF 26-Feb-92 13-May-92 16-Apr-93 31-Dec-95 1.15 0.62 0.53 - 0.62 100%Power FEASIBILTY ADF 24-Nov-93 29-Apr-94 21-Mar-96 31-Dec-98 1.20 0.63 0.57 - 0.63 100%Power Total 44.57 43.43 1.14 - 43.43 100%Social RURAL PRIMARY ADF 20-Jul-78 26-Feb-79 8-Sep-82 31-Dec-96 6.45 5.99 0.46 - 5.99 100%Social RUTAL HEALTH IN ADF 29-Jan-91 11-Dec-91 16-Sep-93 31-Dec-95 1.41 1.33 0.08 - 1.33 100%Social Total 7.85 7.32 0.53 - 7.32 100%Transport SUDAN RAILWAYS ADB 20-Sep-71 7-Dec-71 21-Sep-73 30-Jun-74 2.80 2.80 - - 2.80 100%Transport SUDAN RAILWAYS ADB 17-Sep-73 12-Mar-74 29-Apr-75 31-Dec-76 3.00 2.99 0.01 - 2.99 100%Transport KOSTI-UMM ADB 13-Feb-85 - - 16.66 - - Transport CONST. OF ADF 10-May-74 2-Jul-74 23-Jun-76 30-Jun-79 3.68 3.68 0.00 - 3.68 100%Transport KOSTI-UM RWABA ADF 13-Feb-85 29-Apr-85 7-Jul-86 31-Dec-95 19.34 15.96 3.38 - 15.96 100%Transport RAILWAYS ADF 22-Jun-88 11-Aug-88 3-Sep-90 31-Dec-95 10.04 8.75 1.29 - 8.75 100%Transport PORT SUDAN ADF 16-Oct-89 31-Oct-89 16-Dec-91 31-Dec-95 0.92 0.66 0.26 - 0.66 100%Transport THREE ROAD ADF 24-Aug-92 18-Sep-92 2-Sep-94 31-Dec-99 3.78 2.78 0.99 - 2.78 100%Transport Total 43.56 37.62 22.61 - 37.62 100%Water Sup/Sanit PORT-SUDAN ADF 2-Apr-76 20-Jul-76 12-Apr-81 30-Jun-81 4.61 0.07 4.54 - 0.07 100%Water Sup/Sanit 4.61 0.07 4.54 - 0.07 100%Grand Total 331.69 281.84 68.06 0.09 281.93 100%