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. 

Health

Sudan is committed to supporting decentralization in health, and state level spending share for health is increasing.
This is consistent with delegating the primary responsibility for basic service delivery to state governments. Public Health spending at the state level has increased since 2012  and almost all of total public health spending now takes place at the state level.
The composition of health spending is broadly similar to education. The increase in health expenditure since 2012 has been largely directed to current spending. The high level of current spending raises concerns as improving service delivery in the sector requires investment in health facilities, medical equipment, staff training and capacity building.
Some progress was made in the health indicators, but Sudan is not meeting the health Millennium Development Goal (MDG) targets.
Child and maternal mortality rates improved during the review period, but they remain high. The maternal mortality ratio is high (well above the 2015 MDG target of 180) and the under-five mortality rate also exceeds the MDG target.
Health outcome disparities across states have not yet been fully addressed, necessitating further effort to consolidate and improve progress
These disparities reflect the large differences in the allocation of resources across states as well as states’ ability to track and monitor budgetary allocations, including evaluating expenditure outcomes. Fiscal decentralization is expected to help address these state disparities by redistributing resources to match public service delivery responsibilities, and thus improve equity, responsiveness in public services to local level demand, subnational autonomy and accountability and state development more generally. In addition to resource allocation, improving the efficiency in applying these resources is important for effective service delivery.

Water and Sanitation

Despite the commitments and targets defined in the IPRSP and related water and sanitation sector plans, the sector performance is still far from reaching the MDGs targets.
The percentage of house-hold members using improved sources of drinking water reached 68 percent in 2014 while the percent of household members using improved sanitation facilities only reached 33 percent in
2014, indicating considerable efforts are required to achieve these targets. Around 50 percent of the existing basic schools don’t have access to improved drinking water and sanitation facilities. The large number of internally displaced people adds to this challenge.
There is a large variation in access to water and sanitation among states. Water and sanitation access in West Kordofan State, for example, stands at 60 percent and 23 percent respectively, which are below national average of 68 percent and 33 percent.
Water and sanitation sector has to be given adequate funding commensurate with its important role in the livelihood of the population. Adequate funding is required to improve overall quality and access as well as address states’ disparities.
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 sector should be supported with better capacity and training particularly at the state level.
Efforts are required to integrate water, sanitation and hygiene within other sectors—mainly education, nutrition and health. Schools, health and nutrition centers are useful entry points for such interventions. Specific attention is to be given for water quality. Institutional reform for sustainability of water facilities is a concern that needs to be addressed.
There should be clarity in defining the roles and responsibilities between the federal, state and locality levels and communities, in terms of managing and operating projects, and ensuring sustainability.
Meeting the multiple demands for water for domestic, farming and livestock, in an integrated manner, is crucial for maintaining local economic development within a peaceful and stable society.
Moreover, the resources in the sector have to be used efficiently so that the service is delivered at an affordable price for the poor.

Social Welfare, Security and Protection
Social protection is included under the IPRSP pillar of developing human resources. Aware of the social problems created by vulnerability factors (e.g., environmental, economic, and conflict and displacement), the Government of Sudan has set a fairly extensive social protection system,
involving several institutions.
Significant increase in coverage for most of the social protection programs has been made but there is room for further improvements. Despite the increased coverage, Sudan has a long way to go to reach adequate coverage in certain programs like health insurance due to the magnitude of vulnerability and widespread poverty as well as the low base from which these programs started.
The coverage of social protection needs to be expanded and the performance of outlets that provide treatment services for health insurance need to be improved. Many remote areas in which poverty is higher are not well served with health services outlets. The health facilities providing services to the health insurance in rural areas suffer from the shortages of the medical staff and there are weaknesses in the availability of all the packages covered by the health insurance in the health centers. A strong monitoring is needed as there is an emerging black market trade in the freely distributed medicines including for children less than five years.
Due to Sudan’s widespread poverty and vulnerability, social protection cannot reach all the poor, necessitating further improvements in targeting mechanisms. There is a need to focus on the poorest and most vulnerable to ensure maximum influence and affordability. Targeting mechanisms
for the cash transfers need further improvements and have to be supported by a transparent data base and a monitoring system. This should be based on a rigorous evaluation of the current experience.
There should be more equity considerations in delivering social protection programs. A large variation in the coverage among states is clear with some poorest states getting the least benefit. Improving social protection and welfare mechanisms, particularly for most vulnerable and at-
risk populations including women, youth, and internally displaced persons will be a key priority to reduce situations of acute vulnerability among these groups. This will also help to promote stability and social cohesion in areas affected by conflict.
Several institutions are responsible for the social protection network and coordination needs further improvements. Reviewing of the existing institutional setup is particularly crucial to enhance the coordination aspects. Several ministries and non-government institutions are responsible for social protection safety net activities with overlapping mandates and little coordination among them. The fragmentation of social programs and involvement of multiple ministries and institutions creates inefficiencies and confusion about the roles and responsibilities of the actors involved. There is a need to review the institutional architecture for effective and efficient social protection policy design and program implementation.
The Government’s social protection system is supported by donor community and informal net-works including substantial remittances transferred by Sudanese migrants abroad. However, U.S. economic sanctions and ‘over-compliance’ by non-U.S. commercial banks severely affects remittances to Sudan. The social protection system is also supported by the donor community with an extensive program targeting IDPs and other vulnerable populations.

Governance

Fiscal federal transfers have not yet succeeded in narrowing service delivery disparities among the states that necessitate a review of the formula for distributing federal resources among states. There is an urgent need to review formulas and consider other transfer options such as blocked and specific purpose grants to address the disparities in certain critical areas like education. However,
this should be accompanied by strict adherence to prudent financial management by the states. Allocation of resources between wages, running expenses and development is a concern.
There is an urgent need to direct resources to development at the state level, where responsibility for basic service delivery has been devolved. The low level of development expenditures at the state level is a cause for concern, and there is a need to direct resources to development at the
state level, where it will directly benefit the poor. Improving service delivery to the poor requires investment in schools, clinics, roads and so on. The relative emphasis on current spending also leaves meager resources devoted to running expenses with the consequent result of poor sustain-ability and maintenance of development projects.
Making development planning more effective through better coordination between federal and state levels. Better coordination involves information sharing (e.g., budget and execution data); developing guidelines for more streamlined procedures; and strengthening capacity in budget planning, prioritizing and execution at the state level. As more pro-poor expenditures occur at the subnational level, it is imperative to gather information at the state/locality level on the use of funds to ensure effective utilization of resources.
Capacities in all financial management aspects are weak invariably in all states, requiring a comprehensive capacity building program funded and supervised by the federal Government. The weakness of staff capacities is a major reason for the poor public financial management (PFM).
States lack electronic networking systems linking all departments, let alone localities. None of the states have an electronic archiving system in place. States do not prepare their budgets within a medium-term expenditures framework, but rather formulate incremental budgeting. Localities budgets are not fully integrated into the states budgets. The Auditor General indicated in his last
report that retention and extra budgetary practices still exist in the states, but there are improvements in 2013 compared to 2012. Internal auditing in the states suffers from lack of uniform legislation between the federal Government and the states and weak capacities (e.g., there are rarely certified auditors in states). Procurement staff in most of the states is unqualified.

Other Issues

The informal sector in Sudan seems to have significant contribution to employment. However, the information about the sector is insufficient to allow for analysing its impact on the poor. For example, artisanal gold mining is becoming a major economic activity that employs a significant number of people. Estimates show that about one million persons are directly engaged in direct mining activities and around 3 million are indirectly depending on this sector through the provision of goods and services. The artisanal gold mining extends over 10 states. The PRSP should give special consideration to this emerging sector in terms of its impact on poverty reduction.
Adequate material related to the private sector and its role in growth, employment and poverty reduction exists.The PRSP needs to synthesize the role to be played by the private sector.