A Joint World Bank Group and Sudan’s Ministry of Finance and Economic Planning Assessment on the Sudan (IPRSP)

Interim Poverty Reduction Strategy Paper. The importance of the IORSP that it is one of the basic conditions for foreign debt relief under the HIPC (Heavily Indebted Poor Countries) Initiative. In the first two parts of this review, the focus was on the issues of creating an enabling political and economic environment, agriculture as an engine of growth, human resources and education. In this part the attention is on health, water and sanitation, social welfare, security and protection, governance and other relevant issues.


Challenges

The water and sanitation sector is underfunded. Meager resource is devoted to water expenditures at federal level. Expenditures on water and sanitation at the federal level constitute only 0.5 to 1 percent of expenditures on infrastructure. The water and sanitation federal budget clearly lacks credibility as indicated by the large variations between the budgeted and actual figures. It was not possible to segregate expenditures on water supply and sanitation at the state level from the total expenditures on infrastructure.
Funding is essential for the water sector to meet the MDGs targets and to rehabilitate and replace the aging infrastructure of water infrastructure due to inadequate past investments and destruction of the facilities in conflict areas. Much of the achievement in the sector was the result of the assistance received from UNICEF which has extended its support to the water and sanitation sector since 1975 through the Water and Sanitation Program.
There are several institutions at different levels that govern water resources development and management. At state level, the key institution is the state Water Corporation, which functions under the auspices of the Ministry of Planning and Public Utilities.
At federal level, the key ministries are the Ministry of Water Resources and Electricity, the Ministry of Health, the Ministry of Agriculture and the Ministry of Environment. Under the Ministry of Irrigation and Water Resources are the General Directorate of Water and the Groundwater and Valley Directorate.
There are also community organizations establishing and managing water resources. Similarly, there are various acts and strategies under different institutions and sectors. Important relevant acts are the Water Resources Act of 1995 and the State Water Corporation Acts of 1998. Authority in the water sector is mostly fragmented and responsibilities are distributed among various institutions without effective or institutionalized mechanism of coordination. This often leads to conflicting actions and lower impacts of projects that could have a much better return. Institutional capacity varies among states.


Implications for PRSP


Water has to be given adequate funding commensurate with its important role in the livelihood of the population. Adequate funding is required. Funding has to ensure addressing disparities in access to water and sanitation among states.
Specific attention has to be given to the information of the water sector as a separate sector, particularly at state and locality levels to allow for better planning. Lack of monitoring reflects poor quality of available data concerning actual coverage of water supply and sanitation. The water and sanitation should be supported with better capacity and training particularly at state levels.
Efforts are required to integrate water, sanitation and hygiene within other sectors—mainly education, nutrition and health should continue. Schools, health and nutrition centers are useful entry points for such interventions.
Institutional reform for sustainability of the water facilities is a concern that needs to be tackled.
There should clarity in defining the roles and responsibilities between the federal, states and locality levels and communities, in terms of managing and operating projects, and ensuring sustainability.

Service Delivery: General

There is an urgent need to strengthen the link between budget allocations and outcomes in basic service delivery. Since responsibility for basic services devolved to the state and locality levels and more resources are getting to these sub-national levels, it is imperative to monitor and evaluate
progress on the use of funds and related outcomes at the state/locality level. The weak capacity at the sub-national levels has led to incomplete reporting of expenditures and inadequate monitoring and evaluation (M&E) of outcomes. The capacity for data collection and information management within the decentralized framework of service delivery remains weak. Weak financial management capacity at the state and locality levels led to incomplete reporting/monitoring of expenditure and inadequate evaluation of related results at these levels. This challenges evidence base planning and targeting service delivery. Therefore, capacity building efforts need to be strengthened in those areas. In particular, efforts to strengthen expenditures reporting by purpose/function (e.g., across education, health, roads), economic lines (e.g., wages), and by administrative levels (e.g., state, local) would also allow for a more systematic analysis of the fiscal position of states/localities and as well as sectors. In turn, improved data on sectoral outcomes would highlight potential disparities across states.
The locations of social services—schools, health and water centers—have to be based on technical considerations. Factors like population density, equity have to determine the location of the services rather than the political considerations.

Social Welfare  and Protection

The IPRSP document had a sub-heading of social safety net programs under the pillar of human resources. However, it only covered Zakat, pensions and health insurance without specific strategic direction or actions. Issues mentioned were basically the problems of managing the pension’s funds, and erosion of pensions as a result of inflation. By and large the social protection and social safety net programs did not receive any attention in the IPRSP Social protection programs complement the investments in the agriculture and infrastructure, aiming at increasing incomes of the poor and support social investments in health and education which will all help in reducing poverty.
Sudan faces considerable vulnerability challenges due to the presence of a multiplicity of factors.
These factors include internal conflicts and displacement in certain parts of Sudan, harsh climatic conditions, droughts, erratic and low rainfall, unemployment and frequent economic adjustments with direct consequences on the poor. All these factors have pervasive impacts on the food security and nutrition requiring a strong social protection mechanism.
The Social Initiative Program (SIP) for poverty reduction is the overarching program for the social protection which is a vital component in poverty reduction. In 2012 the government has adopted the Social Initiative Program for poverty reduction implemented by the Ministry of Welfare and Social Security and its agencies: Zakat Chambers, Saving Development Bank, Health Insurance Fund, the National Council for the Disabled, and the Students Support Fund. Eligible beneficiaries of the Cash Transfer Program are identified based on the poverty census of 2011 that was undertaken by the Zakat Fund in collaboration with the Central Bureau of Statistics. The social protection is a fairly extensive program that includes: (i) Direct cash transfers to poor families;
(ii) National Health Insurance Fund; (iii) National Pension Fund; (iv) Support to poor students safety nets interventions, including cash and in kind transfers by the Government and Zakat Fund; (v) General support to certain medical care services like free treatment in emergencies and
free lifesaving medicines; (vi) Social Insurance Fund; (vii) Zakat Fund; (viii) Microfinance; and (ix) Support programs to special groups like rural women, DDR programs for ex-combatants, disabled programs, vocational training centers to enhance youth employment, support to humanitarian crises in war affected areas, creation of productive opportunities for university graduates and support to returnees from South Sudan. The government also runs an expensive general subsidies scheme.
As several institutions are responsible for the social protection network and the Social Initiative Program; coordination remains a major challenge. These institutions include: Ministry of Welfare and Social Security being the main government institution responsible for social protection (supervising Zakat Fund, Social Insurance Fund, National Health Insurance Fund and National Pensions Fund, implementing the cash transfers); Ministry of Finance (delivering cash transfers to the Ministry of Welfare and Social Security, subsidies and social development expenditures); Ministry of Health (nutrition and health services outlets for the health insurance); Medical Supplies Corporation (procuring medicines); Ministry of Education (school feeding ); Humanitarian Affairs Commission (coordination of humanitarian assistance and NGOs activities); the DDR Commission (DDR programs); and The Central Bank of Sudan (microfinance). Coordination represents a daunting task particularly with weak capacities in most of the institutions concerned.
The government system is supported by donor community and strong informal networks stemming from the tradition of the Sudanese society. Informal networks include remittances to families particularly by Sudanese migrants abroad and support to poor families by civil society organizations. The system is also strongly supported by the international community which has an effective and extensive food aid and nutrition program targeting the IDPs and vulnerable population affected by internal conflicts.
Overall Expenditures of Social Welfare, Security and Protection Programs.
Public expenditures of social protection programs are defined here to include both budgetary and non-budgetary expenditures. The budgetary expenditures include subsidies, cash transfers to poor families, contribution of the Ministry of Finance to the NHIF, and the NPF, health fees waiver
and free life-saving medicines and under five children in public health institutions, support to poor university students and rural woman, current expenditures for the social protection institutions and development activities for IDPs and DDR programs. The non-budgetary social protection expenditures included expenditures by the Zakat Fund and The Central Bank of Sudan financial support to microfinancing.
Total public expenditures on social protection (budgetary and non-budgetary) without considering subsidies increased from 1.4 percent of GDP in 2012 to 1.7 percent in 2014. Budgetary expenditures (federal and states) amounted to 1.0 percent of GDP in 2012 and increased to 1.3 percent
in 2014. With the inclusion of subsidies the budget and non-budgetary expenditures significantly increase from 3.3 percent of GDP in 2012 to 4.1 percent in 2014.
The total expenditures on social protection increases further when adding non-public funding expenditure. When the National Social Insurance Fund and the direct food transfers by WFP and nutrition assistance by UNICEF are included, total expenditures on social protection reach
2.3 percent of GDP on average without considering the subsidies. If the subsidies were included the total public and non-public social protection spending will increase to 4.7 percent of GDP in 2014 from 4.2 percent in 2012.
It is difficult to undertake cross comparisons with similar countries or regions due to the different definitions used for social protection and its components. It is estimated that Africa has an average of social expenditures of 2.8 percent of GDP with wide variations from 12 percent to 0.5 percent.
Low income countries average expenditures on social protection amounts to 3.5 percent (2011) as noted by the ILO.