## 1sdnea2021006 — Staffs note that the PRSP is a nationally owned and comprehensive strategy for inclusive economic growth and poverty reduction

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### Overview and objectives
- Objective: lay out a clear plan of the government for poverty reduction across Sudan.
- Condition: satisfactory implementation of a full PRSP is a condition to reach the HIPC Completion Point and to receive irrevocable debt relief.
- Strategy informed by: analysis of the poverty profile and drivers of poverty including conflict, internal displacement, and shocks (climate, economic, and health related shocks including the COVID-19 pandemic).
- Macroeconomic linkage: assessed suitability of macroeconomic reforms to release necessary budgetary resources for poverty reduction programs.
- Validation: analyses validated through extensive consultation with a wide range of stakeholders.
- Structure: five pillars—
  - (i) promoting macroeconomic stability;
  - (ii) fostering inclusive and sustainable economic growth;
  - (iii) boosting human and social development;
  - (iv) promoting peace and providing equal opportunities for all Sudanese; and
  - (v) strengthening governance and institutional capacity.
- Alignment: PRSP aligns with the government’s Three-Year Development Plan, both sharing the same time horizon (2021–2023).
- Cross-cutting issues: gender and social equity integrated across pillars; climate change and environment integrated throughout.

### Staff assessment of the PRSP content and structure
- Commendation: comprehensive and well-prepared; agreement with macroeconomic policy and economic and social objectives.
- PRSP provides:
  - a thorough poverty diagnosis;
  - sectoral plans, reform policy measures, and a policy matrix linked to achievement of the Sustainable Development Goals (SDGs);
  - for each sector: a situation analysis, key challenges, and strategic interventions for growth and poverty reduction;
  - a matrix of key policy actions and institutional reforms and timeline (short-medium-term horizon) for implementation.
- JSAN review covers:
  - process for preparing the strategy;
  - poverty diagnosis;
  - main components of the strategy;
  - implementation, monitoring and evaluation framework, and associated implementation risks;
  - priority areas for strengthening the PRSP during implementation.

### Participatory process — key findings
- Process: highly consultative and broad, helping ensure country ownership.
- Improvement since 2012 I-PRSP: previous JSAN (September 2013) noted need for strengthening; staffs observe this shortcoming has been addressed.
- Data and analysis: informed by social statistics, more recent surveys, and additional analytical work.
- Consultations:
  - Extensive public consultative meetings with civil society, grassroots organizations, private sector, academia, women and youth representatives, and international community.
  - Government ministries and agencies at national and state levels and the Prime Minister’s Office participated.
  - Two consultation rounds:
    - (i) gathering stakeholder input on nature and causes of poverty and on poverty reduction measures (March –   July 2019);
    - (ii) forging national consensus around proposed strategic priorities and interventions (February–March 2021).
  - Structured to build consensus at subnational level; national meetings in Khartoum complemented by state-level consultations.
  - Methods: workshops and focus group discussions with structured and open-ended questions.
  - Lead agency: Ministry of Finance and Economic Planning.
  - Draft PRSP endorsement sequence: technical committee (undersecretaries of all ministries) on April 18, 2021; economic committee of the Council of Ministers on April 25, 2021; approval by the Council of Ministers on May 11, 2021.
- Documentation and inclusiveness:
  - Stakeholder discussions clearly documented and input incorporated.
  - Issues presented by stakeholder type and by region.
  - Gender disaggregation: 37 percent of participants in the first round of consultations were females.
  - Stakeholder input integrated into situation analysis for each pillar.

### Poverty diagnosis — findings and limitations
- Data sources and methods:
  - Leveraged the 2014/15 National Household Budget and Poverty Survey due to lack of more recent credible poverty estimates.
  - Complemented with simulations, including forecast accounting for impact of COVID-19.
  - Quantitative analysis: starts with monetary poverty and examines multi-dimensional poverty including non-monetary measures.
  - Qualitative complements: perceptions of poverty, causes of poverty, and policies to reduce poverty from consultations.
- Coverage and disaggregation:
  - Spatial disaggregation (area of residence and region) provided; less disaggregation by demographic groups and gender.
  - Presents poverty levels and trends with spatial disaggregation from 2009 to 2014/15.
  - Indicates levels and trends of inequality measured by the Gini index over same period.
  - Includes spatial and distributional growth in real per capita consumption and contribution of wages and salaries to that growth.
  - Includes distributional impacts of shocks (floods/drought, inflation).
  - Non-monetary measures: distribution of human capital (education and health), asset ownership, access to public services, food security, and multidimensional deprivations.
- Limitations and recommendations:
  - Source data relatively old; no recent and credible poverty estimate for Sudan.
  - Trends based on non-comparable surveys (acknowledged in the document).
  - PRSP emphasizes urgent need for up-to-date and reliable poverty estimates.
  - Staffs urge finalizing household survey under preparation: government started preparations for a National Household Budget and Poverty Survey (NHBPS) with World Bank support.
  - Recommend leveraging pipeline IDA operation on data and statistics strengthening to design strategy for regular monitoring and analysis.
  - Recommend expanding analysis of distributional impacts to include recent reforms once new data available (including electricity tariffs reform, exchange rate unification, the Sudan Family Support Program, and proposed tax reforms).

### Analysis of past reforms and distributional impacts
- Examples:
  - Removal of preferential exchange rates for wheat importers at beginning of 2018 increased prices of basic staples including sorghum and millet; simulations suggested consumption decreased and the extreme poverty rate increased, with the bottom 40 percent in urban areas affected the most.
  - Simulations on distributional impacts of fuel subsidy removals show fuel subsidies disproportionately benefit the wealthiest and are therefore an inefficient instrument for protecting the poor and promoting equity.
- Updates and recommendations:
  - Analysis being updated to reflect current fuel prices following implementation of fuel subsidies reform.
  - Encourage exploring distributional impacts of other recent development policies as new data become available to design effective impact mitigation measures.

### The poverty reduction strategy — macro findings and Pillar 1 highlights
- Context and challenges:
  - Interrelated development challenges: political, macroeconomic, and financial instability; fragile banking system needing restructuring; weak governance and institutional capacity; effects of prolonged isolation; multidimensional poverty; unemployment; income disparities; unequal access to social services and economic opportunities.
  - PRSP anchored around five pillars aligned with the Three-Year Development Plan.
- Pillar 1: Promoting Macroeconomic Stability — staff observations:
  - Macroeconomic framework assumptions:
    - Based on conservative assumptions broadly in line with the baseline in the Extended Credit Facility (ECF) request.
    - Growth of about 3 percent annually over the medium-term.
    - A modest fiscal deficit.
    - A current account deficit below 10 percent of GDP.
  - With expected achievement of HIPC Decision Point providing debt relief and framework for significant policy reform and increased international assistance, a modestly more ambitious growth trajectory and higher levels of fiscal and external consolidation are achievable.
  - Given Sudan’s extremely low foreign exchange reserve coverage of less than a month, the PRSP could have expanded on nexus between fiscal consolidation and forex accumulation, and more explicitly stress authorities’ commitment to a market-determined exchange rate.
- Fiscal measures:
  - Well balanced between revenue mobilization and subsidy reduction.
  - Revenue measures for base broadening include unification of the customs valuation exchange rate, rationalization of tax exemptions, and increased progressivity of the income tax.
  - Staffs note it would be helpful to specify timetable of customs rate unification and provide more granular information on measures underpinning fiscal adjustment such as new tax policy measures, administrative reforms to strengthen the Large Taxpayer Office (LTO) and Customs Office, and removing discretionary tax exemptions in the Investment and Public-Private Partnership (PPP) laws.
  - On expenditure: welcome attention to eliminating energy subsidies but note lack of progress adjusting retail gasoline and diesel prices to cost recovery levels and need to reform electricity tariff regime, including increased electricity tariff rates on high-end consumers.
  - Discussion on increased allocations for social spending welcome but could be more granular and provide unequivocal support for conducting Public Expenditure Tracking Surveys (PETS) in education and health, especially after the Sudan Family Support Program (SFSP) winds down and Sudan transitions to a domestically-financed program.
- Public-Private Partnerships (PPPs) risks:
  - PPPs can mobilize private investment but attendant risks should be thoroughly explored.
  - If not well-structured, PPPs can impose significant future costs via explicit and implicit contingent liabilities.
  - PPPs must be grounded in a transparent framework; risks must be quantified and consistent with overall strategy controlling debt vulnerabilities including debt limits under the ECF and the HIPC interim period.
- State-Owned Enterprises (SOEs):
  - SOE reform including governance warranted to mitigate fiscal risk and enable private sector-led growth.
  - Recommend adopting comprehensive strategy for SOEs (e.g., retain, privatize, or liquidate) and committing to publishing externally audited financial statements of all SOEs beginning with the 10 largest SOEs.
  - Authorities’ decision to transfer oversight of all SOEs to the Ministry of Finance and Economic Planning is welcomed.
- Monetary and financial sector issues:
  - Focus on low and stable inflation appropriate given recent high inflation, but transition to reserve money targeting deserves elaboration.
  - Transition will need greater central bank independence supported by work to amend the Central Bank Act and ongoing fiscal consolidation.
  - More detail on how a planned move to a dual banking system of Islamic and conventional institutions could support domestic debt market development and credit provision would be beneficial.
  - Welcome stronger commitment to avoid multiple currency practices, including preferential exchange rates for sales of foreign currency to state-owned companies.
  - PRSP could highlight need to revise the Banking Regulation Act to provide for a comprehensive resolution regime for the banking sector in line with international best practice.
- Fiscal governance and public financial management (PFM):
  - Need for further improvements in fiscal governance and PFM could have been given more prominence.
  - Revisions to the budget law should cover the entire budget cycle including macro-fiscal policymaking and fiscal risk management; budget preparation and approval; budget execution and treasury management; accounting and reporting; financial oversight of extrabudgetary units; and enforcement mechanisms and sanctions.
  - Debt management system opaque and lacks centralized control; a Debt Management Office should be established as a priority with mandate to manage external and domestic debt; promulgate regulations and operational procedures for approval, issuance, and monitoring of loan guarantees; and enhance coordination with fiscal policy.
  - Quarterly external public debt reports should be issued covering outstanding debt stock, debt flows, comprehensive information on new borrowing, and external and domestic public and publicly-guaranteed debt, with more comprehensive summary reports annually.
- Electricity sector:
  - Only 35 percent of the population has access to grid electricity.
  - Per capita electricity consumption in Sudan is extremely high relative to peers due to some of the lowest electricity prices in the world.
  - Low prices undermine energy sector’s financial viability, contribute to power outages, and large fuel and electricity subsidies cause large fiscal deficits and crowd out needed social spending.
  - PRSP acknowledges measures to strengthen electricity sector and potential to attract private investment, but more attention needed on first steps to improve financial viability including reducing losses and preparing and implementing least-cost sector plans.
  - Reform of the Electricity Law important to strengthen regulatory and institutional framework and attract private investment once financial viability achieved.

### Pillar 2 — Inclusive and sustainable economic growth (agriculture, private sector, jobs)
- Findings and objectives:
  - Transform agriculture and livestock sector while inducing growth elsewhere in private sector.
  - Expected results: more productive and resilient agriculture and livestock sector; a policy and regulatory environment more accessible and attractive to investors and MSMEs; a more diversified and future-fit economy; and reduced unemployment (particularly among women and youth) through creation of work accessible to all levels of Sudanese society.
  - Broad interventions: government investments in agricultural research and extension services, and infrastructure; building legal, regulatory, and institutional framework for private sector-led growth.
  - Strong focus on jobs, especially boosting women and youth employment.
- Agriculture sector diagnostics and priorities:
  - Agriculture identified as most important sector and accounts for majority of employment.
  - Key constraints: low productivity (underperforming compared to peers in Africa), lack of market and credit access, land tenure issues, and need to improve value of livestock production.
  - Priority reforms/investments: transport infrastructure and energy, financial services, production and marketing systems, agriculture extension services, adaptation to climate change, animal health treatment, and water and forestry.
  - Strategic objective: increase export of meat instead of live animals to maximize returns and develop meat value chains and marketing.
  - Agribusiness prioritized to alleviate poverty, promote food security, and improve living standards.
- Climate resilience and risk management:
  - Government commitment to enhance resilience to climate change given high vulnerability and dependence on rainfed agriculture.
  - Agribusiness development and private sector role emphasized (green technologies, renewable energies, climate adaptation).
  - Suggested enrichments: specify reform areas for climate adaptation and mitigation; discuss irrigation bottlenecks and limited access to water; warrant investment in water purification and treatment technologies such as desalination and wastewater treatment technologies.
  - Recommendation to develop insurance mechanisms (e.g., Catastrophe bond) to unlock private investment and enhance ex-ante preparedness; advise careful review of prior agricultural insurance schemes before further investment.
- Private sector development and access to finance:
  - Recognizes limited access to financing and inadequate private sector support mechanisms; identifies corrective actions.
  - Government actions: establishing the Investment and Private Sector Development Authority and a Ministry of Investment, and passing a new Investment Law in April 2021.
  - Recommended priorities: implement policies to improve investment climate, foster Public-Private Dialogue, strengthen legal and institutional framework for PPPs, and support MSME development.
  - Observation: private sector section lacks gender focus and needs more detail on youth and women employment policies.
  - Performance target: improve Sudan’s Doing Business Index ranking by 20 points in the coming four years from its current rank of 171 out of 190 countries in 2020.
- Infrastructure and energy:
  - Poor infrastructure is key constraint to growth and SDGs; need to prioritize interventions to optimize existing resources given limited fiscal space.
  - Electricity sector: optimal use of existing international interconnectors for electricity trade and rehabilitation of existing assets to reduce losses and improve efficiency.
  - Energy subsidy guidance: energy subsidies are not pro-poor, unsustainable, and will result in a large fiscal burden while fueling inflation; develop subsidy reform strategy that can win broad public support.
  - Encourage strengthening transmission and distribution, ensure access by MSMEs, and support renewable energy on a least-cost basis.

### Pillar 3 — Boosting Human and Social Development
- Core assessment:
  - Focus on education, health, and social development as foundation for poverty reduction and shared prosperity.
  - Sudan ranks among the lowest 20 countries in the world based on the Human Capital Index (HCI).
  - Chronic impacts: armed conflicts, political instability, weak institutions, and legacy of decades of international isolation.
  - Limited access and low quality of education, health, and social protection; public financing minimal leading to high households’ out-of-pocket expenditure.
- Education and skills:
  - PRSP aligns with Education Sector Strategic Plan and SDGs; prioritizes vocational and technical training to support growth and employment.
  - Needs: address drop in basic education quality, enhance vocational training especially in rural areas, develop apprenticeships for informal sector, and implement teacher training with detailed assessment and financial planning.
- Health and nutrition:
  - Progress in maternal and child health services and controlling communicable diseases inadequate relative to peers and SDG targets for 2030.
  - Double burden of communicable and rising non-communicable diseases plus COVID-19 necessitates increased allocation to health while rationalizing public expenditures and improving efficient utilization.
  - Priorities: implement short-term and medium-term priorities from the National Health Policy, 2017-2030; improve health information management systems, expenditure tracking systems down to local governments, and regular household surveys such as Demographic and Health Surveys (DHS) and Multiple Indicator Cluster Survey (MICS).
- WASH and nutrition links:
  - Comprehensive assessment of water and sanitation; recommended stronger emphasis on interlinkages with malnutrition, cognitive development, school attendance, neonatal and infant mortality, and cholera prevention.
  - Key statistic: freshwater withdrawals reaching 94 percent of renewable freshwater resources available.
  - Recommendations: highlight water scarcity–nutrition linkages and underpin with policy responses; improve WASH in schools (including sanitation for girls) and in health care settings to improve attendance, reduce dropouts, strengthen infection prevention and control, and reduce maternal and neonatal mortality.
- Inequality, social protection, and urbanization:
  - PRSP highlights links between inequality, growth and poverty reduction and identifies performance indicators linked to SDGs promoting gender equality and empowerment of women.
  - Suggest updating analysis on pension, food security and safety nets when new household survey data become available.
  - Urbanization: PRSP could discuss opportunities and challenges posed by urbanization and rural-to-urban migration; recommend integrated urban development to strengthen urban resilience and foster social and economic inclusion.

### Pillar 4 — Promoting Peace and Equal Opportunities
- Focus and recommendations:
  - Centers on implementing the peace agreement and addressing challenges in conflict-affected areas.
  - Recommend additional focus on peacebuilding and development needs at community level.
  - Emphasize leadership and voice of women and youth as stabilizing factors; their engagement critical to resolving division and exclusion.
  - Role of safety and security in facilitating sustainable return of IDPs and refugees highlighted; need for strategic reintegration plan and supportive institutional structures.
  - Government has National Strategy for the Protection of Civilians; Peace Commission seeks international support for data collection on displaced Sudanese.
  - Warning: returns and restoration of land and assets are potential flashpoints requiring careful prevention and mitigation; international engagement and sharing regional experience recommended.

### Pillar 5 — Strengthening Governance and Institutional Capacity
- Objectives and priorities:
  - Establish functioning federal system with institutional capacity to carry out core state functions via strengthening public financial management, decentralization, peace and security, and the fight against corruption.
  - Decentralization to improve targeting especially in disadvantaged areas; recommend strengthening decentralization to ensure adequate resource allocation, enhance staff capacity on financial and procurement management, and improve basic service provision.
- Fiscal decentralization and revenue management:
  - To be developed as part of constitutional reform and Peace Agreement implementation; delegation of spending linked to political authority conferred by constitution.
  - Plans include law establishing a National Revenue Fund to pool all nationally collected revenues and establishing a new National Commission for Resource Allocation.
  - Government plans to conduct and publicize analysis on current fiscal decentralization system to guide reform for poverty reduction, improved social outcomes and reduction of regional disparities.
- Governance, procurement, and anti-corruption:
  - PRSP acknowledges governance challenges and need for corrective measures; enactment of the Anti-Corruption National Commission Law and establishment of an independent Anti-Corruption Commission noted.
  - Procurement is a key source of corruption; recommended policy details include public and competitive tenders over a threshold, open advertisement of public job vacancies and awards, and enshrinement of changes in new or revised Procurement Law.
  - Emphasize strengthening operational autonomy of the central bank as intended under Sudan’s IMF Staff-Monitored Program (SMP) and further consultation on legislative reform associated with AML/CFT.
  - Support improving trust and accountability through increased participation, transparency, and equitable and efficient service delivery.

### Monitoring and evaluation (M&E) framework and institutional arrangements
- Importance: M&E critical for effective and successful implementation; addressing data and capacity limitations is key.
- Government commitments:
  - Establish a PRSP Implementation Oversight Committee including several government ministries (including the Ministry of Finance and Economic Planning, MoFEP) to provide overall oversight and guidance.
  - Establish a PRSP Implementation Unit within the MoFEP reporting directly to the Undersecretary of Planning in the MoFEP; Unit tasked with day-to-day implementation and MoFEP responsible and accountable for monitoring.
- Staffs’ assessments and recommendations:
  - Support establishment of Oversight Committee and Implementation Unit; recommend both be established at the earliest possible opportunity given the relatively short implementation timeline.
  - PRSP should be clearer on how existing structures will be adapted for oversight and implementation.
  - Prepare clear terms of reference for the Unit’s implementation and M&E role and share them with key implementing agencies.
  - Unit should prepare a monitoring and evaluation plan, collect necessary data, and prepare an implementation progress report covering the first year.
  - Technical assistance from development partners may be helpful.
  - Streamline M&E by simplifying institutional arrangements and defining clearly monitorable inputs and outcomes.
  - Strengthen coordination between the PRSP Implementation Unit at the MoFEP and other government units (notably the Central Bureau of Statistics and line ministries).
  - Prepare an Annual Progress Report to track implementation progress and take mid-term corrective actions.

### Budgeting, costing, and financing
- Alignment: Future Budget Laws should align with PRSP by enhancing formulation of program budgets within key sectoral ministries on basis of sectoral Medium-Term Expenditure Frameworks (MTEF) and the global MTEF.
- Gap: PRSP lacks a costing and financing plan for proposed interventions.
- Staffs recommend:
  - Develop cost estimates for specific interventions under the PRSP quickly and use these to inform prioritization of expenditure in drafting the 2022 and future budgets.
  - Prepare and present a costing and financing plan only for the most immediate and highest priority interventions (not for all interventions).
  - Strengthen existing public investment management systems and use them to cost investments proposed in the PRSP and integrate them into Sudan’s public investment program.
  - Costing will support planning of external fund raising with greater precision and assist debt sustainability considerations.

### Data gaps, statistical capacity, and survey priorities
- Acknowledged gaps: poverty, social and economic statistics; administrative data; population and agriculture censuses.
- Ongoing work: new household poverty survey with World Bank support; pipeline statistical capacity development project financed through IDA19.
- Staffs recommend:
  - Move quickly to develop effective M&E system leveraging credible data sources including surveys and administrative data.
  - Initiate regular and frequent collection of data on employment.
  - Strengthen data collection capacity in the Central Bureau of Statistics and line ministries.
  - M&E system should specify which data source will monitor each PRSP goal, identify data gaps, and expected periods to fill gaps.
  - Move forward quickly with implementation of the new National Household Budget and Poverty Survey (NHBPS) being prepared with World Bank support; new household survey data will facilitate monitoring toward the HIPC Completion Point requirement of satisfactory implementation of the full PRSP for at least one year.
  - Put in place regular data collection system to track trends in poverty and other key socio-economic indicators.
  - Leverage the pipeline IDA project on data and statistics strengthening to improve frequency and regularity of data collection.

### Poverty analysis, targeting, gender, and inclusions
- Main causes of poverty and required interventions identified through analyses and consultations; strategies across five pillars consistent with analysis given data limitations.
- Staffs encourage refining implementation as new data become available and allocating resources to speed up poverty analysis once new household survey data available.
- Staffs stress defining targets through consultations and recognizing institutional capacity constraints to generate ownership of results framework.
- Gender:
  - Gender aspects mentioned throughout analysis but not prominent in the Policy Matrix.
  - Recommend greater prominence for gender links including: women's political representation and participation, women's rights in agriculture and informal economy, women's share of wage employment, women's land rights, gender responsive macro-economic policies, gender-based violence and justice/security sector reforms, and engagement with local communities.

### Climate, disasters, communication, and resilience
- PRSP acknowledges compounding poverty implications of climate shocks (floods and droughts) and provides framework to combine poverty reduction with disaster risk reduction.
- Post-Disaster Needs and Recovery Assessment: 2020 Nile floods produced unprecedented damages and losses with severe poverty implications for health, education, and food security.
- Strategic priorities include strengthening community resilience to climate change and enhancing government capacities for emergency preparedness and response.
- Staffs support PRSP plans to build capable communication systems using citizen engagement, transparency, and accountability to improve ownership and fit-for-purpose solutions.

### Risks to implementation and macroeconomic context
- Significant implementation risks identified:
  - Annual inflation accelerated to over 300 percent in 2021 and achieving stability in this context will not be easy.
  - Patience of the population is tested and popular protests are on the rise.
  - Limited M&E capacity within civil service and funding shortages could delay implementation.
  - Fiscal projection risks, especially timing of full effect of tax policy measures and political capital needed to eliminate energy subsidies.
  - Macro-critical governance weaknesses and fragility of the transition contribute to downside risks.
  - High risks to Foreign Direct Investment (FDI) projections.
  - Public investment uncertainty due to: ad hoc tax concessions under the Investment Law, public procurement capacity, fiscal risk management under PPP framework, and severe governance problems.
  - Climate and natural disaster risks should be managed given impacts on social relations (e.g., conflict between pastoralists and farmers).
  - Additional risks include: (i) delayed political transition; (ii) a protracted and more severe impact from COVID-19; (iii) continued border clashes and regional conflict spillovers; (iv) failure to create enabling environment for private sector-led development; (v) governance and transparency reform progress hampered by vested interests; and (vi) limited data on poverty, social, economic and financial indicators impeding development of a clear medium-term macroeconomic framework linked to poverty outcomes.

### Near-term priority actions recommended by staffs
- Prepare and present a costing and financing plan only for the most immediate and highest priority interventions.
- Strengthen existing public investment management systems and use them to cost PRSP investments and integrate them into Sudan’s public investment program.
- Establish a system for monitoring the implementation status of the strategy, including immediately establishing the proposed PRSP Oversight Committee and Implementation Unit.
- Streamline the M&E process by simplifying institutional arrangements and defining clearly monitorable inputs and outcomes; prepare an Annual Progress Report on sectoral interventions.
- Adjust the strategy (as a planning process, not the paper) to strengthen the link between macro/structural policies and poverty reduction; refine implementation as new data become available and take corrective measures as necessary.
- Prepare for flexibility in implementation priorities given high uncertainty.
- Move forward quickly with implementation of the NHBPS and build a regular data collection system to track poverty and key socio-economic indicators; leverage the pipeline IDA project on data and statistics strengthening.
- Ensure continuous communication of the PRSP and its implementation to secure citizen buy-in and strengthen the social contract.

_Source — 1sdnea2021006 - 3.      Staffs note that the PRSP is a nationally owned and comprehensive strategy for_

### 3.      Staffs note that the PRSP is a nationally owned and comprehensive strategy for

### 3.      Staffs note that the PRSP is a nationally owned and comprehensive strategy for inclusive economic growth and poverty reduction

### Overview and objectives
- The objective of the PRSP is to lay out a clear plan of the government for poverty reduction across Sudan.
- The satisfactory implementation of a full PRSP is a condition to reach the HIPC Completion Point and to receive irrevocable debt relief.
- The strategy is informed by an analysis of the poverty profile of Sudan and the drivers of poverty, which include conflict, internal displacement, and shocks, including climate, economic, and health related shocks (including the COVID-19 pandemic).
- The document is also informed by an overall assessment of the macroeconomic framework and the suitability of the macroeconomic reforms to release necessary budgetary resources for poverty reduction programs.
- Analyses have been validated through extensive consultation with a wide range of stakeholders.
- The PRSP presents a comprehensive strategy organized around five pillars:
  - (i) promoting macroeconomic stability;
  - (ii) fostering inclusive and sustainable economic growth;
  - (iii) boosting human and social development;
  - (iv) promoting peace and providing equal opportunities for all Sudanese; and
  - (v) strengthening governance and institutional capacity.
- The PRSP aligns well with the government’s Three-Year Development Plan, with both sharing the same time horizon (2021–2023).
- Improving gender and other kinds of social equity is a cross-cutting imperative integrated across the pillars; issues related to climate change and environment are integrated throughout the strategy.

### Staff assessment of the PRSP content and structure
- Staffs commend the government for a comprehensive and well-prepared poverty reduction strategy and agree with the thrust of its macroeconomic policy and economic and social objectives.
- The PRSP provides:
  - a thorough poverty diagnosis;
  - sectoral plans, reform policy measures, and a policy matrix linked to achievement of the Sustainable Development Goals (SDGs);
  - for each sector: a situation analysis, key challenges, and strategic interventions for growth and poverty reduction;
  - a matrix of key policy actions and institutional reforms and timeline (short-medium-term horizon) for implementation.
- This JSAN provides feedback from IMF and World Bank staffs, reviewing:
  - the process for preparing the strategy;
  - its poverty diagnosis;
  - main components of the strategy;
  - the strategy’s implementation, monitoring and evaluation framework, and associated implementation risks;
  - staffs’ views on priority areas for strengthening the PRSP during implementation.

### Participatory process — key findings
- The Government of Sudan developed the PRSP through a highly consultative and broad participatory process that has helped ensure country ownership.
- The September 2013 Joint Staff Advisory Note (JSAN) on the 2012 I-PRSP noted the participatory process was encouraging but required further strengthening; staffs observe this shortcoming has been addressed during preparation of the full PRSP (2021–2023).
- Compared to the I-PRSP, the PRSP has been informed by social statistics and information from more recent surveys together with additional analytical work in various areas.
- Consultations:
  - Extensive public consultative meetings were held with civil society and grassroot organizations at the national and states levels, private sector representatives, academia, women and youth representatives, and the international community (donors and development partners).
  - Government ministries and agencies at both national and state levels, and the Prime Minister’s Office participated in the PRSP preparation process.
  - Two rounds of consultations achieved strong participation and support by: (i) gathering stakeholder input on the nature and causes of poverty and on poverty reduction measures (March –   July 2019); and (ii) forging a national consensus around proposed strategic priorities and interventions (February–March 2021).
  - The consultative process was structured to build consensus and country ownership at the subnational level, with national-level meetings in Khartoum complemented by consultations at the state level.
  - Consultations used workshops and focus group discussions with a combination of structured and open-ended questions.
  - Development of the PRSP was led by the Ministry of Finance and Economic Planning.
  - Draft PRSP endorsement sequence: technical committee (undersecretaries of all ministries) on April 18, 2021; economic committee of the Council of Ministers on April 25, 2021; approval by the Council of Ministers on May 11, 2021.
- Documentation and inclusiveness:
  - Discussions with different stakeholders were clearly documented and input incorporated.
  - Issues raised are presented by stakeholder type and by region.
  - The number of participants disaggregated by gender is documented: 37 percent of participants in the first round of consultations were females.
  - Input from various stakeholders integrated in the situation analysis for each pillar.

### Poverty diagnosis — findings and limitations
- Data sources and methods:
  - The PRSP leveraged the 2014/15 National Household Budget and Poverty Survey due to lack of more recent credible poverty estimates.
  - Analysis was complemented with simulations, including a forecast accounting for the impact of COVID-19.
  - Quantitative analysis begins with monetary poverty and examines multi-dimensional poverty, including non-monetary measures.
  - Quantitative analysis is complemented by qualitative information from consultations on perceptions of poverty, causes of poverty, and policies to reduce poverty.
- Coverage and disaggregation:
  - Provides disaggregation of welfare across space (area of residence and region) but less so by demographic groups and gender.
  - Presents poverty levels and trends with spatial disaggregation from 2009 to 2014/15.
  - Indicates levels and trends of inequality measured by the Gini index over the same period.
  - Includes spatial and distributional growth in real per capita consumption and the contribution of wages and salaries to that growth.
  - Includes distributional impacts of shocks (floods/drought, inflation).
  - Non-monetary measures cover distribution of human capital (education and health), asset ownership, access to public services, food security, and multidimensional deprivations.
- Limitations and recommendations:
  - Source data is relatively old; there is currently no recent and credible poverty estimate for Sudan.
  - Trends are based on non-comparable surveys (as acknowledged in the document).
  - PRSP emphasizes urgent need for up-to-date and reliable poverty estimates to inform policy and monitor national goals.
  - Staffs urge finalizing the household survey under preparation: the government has started preparations for a National Household Budget and Poverty Survey (NHBPS) with support from the World Bank.
  - Staffs recommend leveraging the pipeline IDA operation on data and statistics strengthening to design a strategy for monitoring and analyzing poverty trends regularly.
  - Staffs recommend expanding analysis of distributional impacts to include recent reforms once new data become available (including electricity tariffs reform, exchange rate unification, the Sudan Family Support Program, and proposed tax reforms).

### Analysis of past reforms and distributional impacts
- Examples analyzed:
  - Removal of preferential exchange rates for wheat importers at the beginning of 2018 resulted in increases in the price of basic staples, including sorghum and millet; simulations suggested consumption decreased and the extreme poverty rate increased, with the bottom 40 percent in urban areas affected the most.
  - Simulations were conducted on distributional impacts of fuel subsidy removals; assessment reveals fuel subsidies disproportionately benefit the wealthiest and are therefore an inefficient instrument for protecting the poor and promoting equity.
- Staffs note the analysis is being updated to reflect current fuel prices following implementation of the fuel subsidies reform.
- Staffs encourage exploring distributional impacts of other recent development policies as new data become available to design effective impact mitigation measures.

### The poverty reduction strategy — macro findings and Pillar 1 highlights
- Context and challenges:
  - Sudan faces interrelated development challenges including political, macroeconomic, and financial instability; a fragile banking system needing restructuring; weak governance and institutional capacity; effects of prolonged isolation from the international community; multidimensional poverty; unemployment; disparities in income; and unequal access to social services and economic opportunities.
  - The PRSP is anchored around five pillars aligned with the Three-Year Development Plan.
- Pillar 1: Promoting Macroeconomic Stability — staff observations:
  - Macroeconomic framework assumptions:
    - Based on conservative assumptions broadly in line with the baseline in the Extended Credit Facility (ECF) request.
    - Growth of about 3 percent annually over the medium-term.
    - A modest fiscal deficit.
    - A current account deficit below 10 percent of GDP.
  - With expected achievement of HIPC Decision Point providing debt relief and a framework for significant policy reform and increased international assistance, a modestly more ambitious growth trajectory, and higher levels of fiscal and external consolidation, are achievable.
  - Given Sudan’s extremely low foreign exchange reserve coverage of less than a month, the PRSP could have expanded on the nexus between fiscal consolidation and forex accumulation, and more explicitly stress the authorities’ commitment to a market-determined exchange rate.
- Fiscal measures:
  - Well balanced between revenue mobilization and subsidy reduction.
  - Revenue measures targeted to base broadening include unification of the customs valuation exchange rate, rationalization of tax exemptions, and increased progressivity of the income tax.
  - Staffs note it would be helpful to specify the timetable of the customs rate unification and provide more granular information on measures underpinning fiscal adjustment such as new tax policy measures, administrative reforms to strengthen the Large Taxpayer Office (LTO) and Customs Office, and removing discretionary tax exemptions in the Investment and Public-Private Partnership (PPP) laws.
  - On expenditure, staffs welcome attention to eliminating energy subsidies but note more prominence could be given to lack of progress adjusting retail gasoline and diesel prices to cost recovery levels and the need to reform the electricity tariff regime, including increased electricity tariff rates on high-end consumers.
  - The discussion on increased allocations for social spending is welcome but could be more granular and provide unequivocal support for conducting Public Expenditure Tracking Surveys (PETS) in education and health, especially after the Sudan Family Support Program (SFSP) winds down and Sudan transitions to a domestically-financed program.
- Public-Private Partnerships (PPPs) risks:
  - PPPs are a key element for mobilizing private investment, but attendant risks should be thoroughly explored.
  - If not well-structured, PPPs can impose significant future costs via explicit and implicit contingent liabilities.
  - Any PPPs must be grounded in a transparent framework and risks must be thoroughly quantified and consistent with overall strategy controlling debt vulnerabilities including debt limits under the ECF and the HIPC interim period.
- State-Owned Enterprises (SOEs):
  - Attention to SOE reform, including governance, is warranted to mitigate fiscal risk and enable private sector-led growth.
  - Staffs recommend adopting a comprehensive strategy for SOEs (e.g., retain, privatize, or liquidate) and committing to publishing externally audited financial statements of all SOEs beginning with the 10 largest SOEs.
  - Staffs welcome the authorities’ decision to transfer responsibility for oversight of all SOEs to the Ministry of Finance and Economic Planning.
- Monetary and financial sector issues:
  - Focus on low and stable inflation is appropriate given recent high inflation, but the transition to reserve money targeting deserves elaboration.
  - Transition will need to be underpinned by greater central bank independence supported by work to amend the Central Bank Act, as well as ongoing fiscal consolidation.
  - More detail on how a planned move to a dual banking system of Islamic and conventional institutions could support domestic debt market development and credit provision would be beneficial.
  - Staffs welcome a stronger commitment to avoid multiple currency practices, including preferential exchange rates for sales of foreign currency to state-owned companies.
  - PRSP could highlight need to revise the Banking Regulation Act to provide for a comprehensive resolution regime for the banking sector in line with international best practice.
- Fiscal governance and public financial management (PFM):
  - Need for further improvements in fiscal governance and PFM could have been given more prominence.
  - Revisions to the budget law should cover the entire budget cycle including macro-fiscal policymaking and fiscal risk management; budget preparation and approval; budget execution and treasury management; accounting and reporting; financial oversight of extrabudgetary units; and enforcement mechanisms and sanctions.
  - Debt management system is opaque and lacks centralized control; a Debt Management Office should be established as a priority with mandate to manage external and domestic debt; promulgate regulations and operational procedures for approval, issuance, and monitoring of loan guarantees; and enhance coordination with fiscal policy.
  - Quarterly external public debt reports should be issued covering outstanding debt stock, debt flows, comprehensive information on new borrowing, and external and domestic public and publicly-guaranteed debt, with more comprehensive summary reports annually.
- Electricity sector:
  - Only 35 percent of the population has access to grid electricity.
  - Per capita electricity consumption in Sudan is extremely high relative to peers due to some of the lowest electricity prices in the world.
  - Low prices undermine the energy sector’s financial viability, contribute to power outages, and large fuel and electricity subsidies cause large fiscal deficits and crowd out needed social spending.
  - The PRSP acknowledges measures to strengthen the electricity sector and potential to attract private investment, but more attention needed on first steps to improve financial viability including reducing losses and preparing and implementing least-cost sector plans.
  - Reform of the Electricity Law will be important to strengthen regulatory and institutional framework and attract private investment once financial viability is achieved.

_Italic: Source — 1sdnea2021006 - 3.      Staffs note that the PRSP is a nationally owned and comprehensive strategy for_

### 21.      Pillar 2 is comprehensive in discussing the challenges for achieving inclusive and

### 1sdnea2021006 - 21.      Pillar 2 is comprehensive in discussing the challenges for achieving inclusive and sustainable economic growth and outlining specific policy measures to achieve this objective.

### Pillar 2 — Inclusive and sustainable economic growth (agriculture, private sector, jobs)
- Findings and objectives:
  - Transforming the agriculture and livestock sector while inducing growth elsewhere in the private sector.
  - Expected results: a more productive and resilient agriculture and livestock sector; a policy and regulatory environment that is more accessible and attractive to investors and small and medium enterprises; a more diversified and future-fit economy; and reduced unemployment (particularly among women and youth) through the creation of work that is accessible to all levels of Sudanese society.
  - Broad interventions proposed: government investments in agricultural research and extension services, and infrastructure; building the legal, regulatory, and institutional framework for private sector-led economic growth.
  - Strong focus on jobs, particularly actions to boost women and youth employment, for achieving inclusive and sustainable growth and poverty reduction.

- Agriculture sector diagnostics and priorities:
  - Agriculture identified as the most important sector in the economy of Sudan and accounts for the majority of employment.
  - Key constraints highlighted: low productivity (Sudan underperforming compared to peers in Africa), lack of access to markets and credit, land tenure issues, and need to improve the value of livestock production.
  - Priority reforms and investments to raise productivity: transport infrastructure and energy, financial services, production and marketing systems, agriculture extension services, adaptation to climate change, animal health treatment, and water and forestry.
  - Strategic objective welcomed: increase export of meat instead of live animals to maximize returns from livestock and develop meat value chains and marketing.
  - Agribusiness viewed as a priority sector to alleviate poverty, promote food security, and improve living standards; interventions expected to improve productivity and incomes with positive impacts on poverty reduction.

- Climate resilience and risk management:
  - PRSP highlights government commitment to enhance resilience to climate change given Sudan’s high vulnerability to climate shocks and heavy dependence on rainfed agriculture.
  - Agribusiness development seen as foundation to enhance climate resilience; private sector role emphasized (green technologies, renewable energies, climate adaptation).
  - Suggested enrichments to PRSP: specify reform areas to enhance climate adaptation and mitigation; discuss irrigation bottlenecks and limited access to water; warrant investment in water purification and treatment technologies such as desalination and wastewater treatment technologies.
  - Recommendation to develop insurance mechanisms (e.g., Catastrophe bond) to unlock private investment and enhance ex-ante preparedness; advise careful review of prior agricultural insurance schemes in Sudan and neighboring countries before further investment.

- Private sector development and access to finance:
  - PRSP recognizes limited access to financing and inadequate private sector support mechanisms and identifies corrective actions.
  - Government actions noted: establishing the Investment and Private Sector Development Authority and a Ministry of Investment, and passing a new Investment Law in April 2021.
  - Recommended priorities: implement proposed policies to improve the investment climate, foster Public-Private Dialogue, strengthen the legal and institutional framework for PPPs, and support micro, small and medium enterprises (MSMEs) development.
  - Observation: private sector development section lacks a gender focus and needs more detail on policies to create employment for youth and women.
  - Performance target: improve Sudan’s Doing Business Index ranking by 20 points in the coming four years from its current rank of 171 out of 190 countries in 2020.

- Infrastructure and energy:
  - Poor infrastructure is a key constraint to growth and SDGs; need to prioritize interventions to optimize the use of existing resources given limited fiscal space.
  - In electricity sector: optimal use of existing international interconnectors for electricity trade and rehabilitation of existing assets to reduce losses and improve efficiency.
  - Energy subsidy guidance: energy subsidies are not pro-poor, are unsustainable, and will result in a large fiscal burden (while continuing to fuel inflation); develop a subsidy reform strategy that can win broad public support.
  - Encourage interventions to strengthen transmission and distribution of electricity, ensure access by MSMEs, and support renewable energy on a least-cost basis.

### Pillar 3 — Boosting Human and Social Development
- Core assessment:
  - Focus on education, health, and social development as foundation for poverty reduction and promoting shared prosperity.
  - Sudan ranks among the lowest 20 countries in the world based on the Human Capital Index (HCI).
  - Chronic impacts: armed conflicts, political instability, weak institutions, and legacy of decades of international isolation.
  - Limited access and low quality of education, health, and social protection; public financing in these sectors is minimal, leading to high households’ out-of-pocket expenditure.

- Education and skills:
  - PRSP aligns with the Education Sector Strategic Plan and the SDGs; prioritizes vocational and technical training to support growth and employment creation.
  - Identified needs: address drop in basic education quality, enhance vocational training especially in rural areas, develop apprenticeships for the informal sector, and implement teacher training with more detailed assessment and financial planning.

- Health and nutrition:
  - Progress in expanding maternal and child health services and controlling communicable diseases is inadequate relative to peers and SDG targets for 2030.
  - Double burden of communicable and rising non-communicable diseases plus COVID-19 necessitates increased allocation to the health sector while rationalizing public expenditures and improving efficient utilization.
  - Priorities: implement short-term and medium-term priorities from the National Health Policy, 2017-2030; improve health information management systems, expenditure tracking systems down to local governments, and regular household surveys such as Demographic and Health Surveys (DHS) and Multiple Indicator Cluster Survey (MICS).

- Water, sanitation, hygiene (WASH) and nutrition links:
  - Comprehensive assessment of water and sanitation; recommended stronger emphasis on interlinkages with malnutrition, cognitive development, school attendance, neonatal and infant mortality, and cholera prevention.
  - Key statistic: freshwater withdrawals reaching 94 percent of renewable freshwater resources available.
  - Recommendations: highlight water scarcity–nutrition linkages and underpin them with policy responses; improve WASH in schools (including sanitation for girls) and in health care settings to improve attendance, reduce dropouts, strengthen infection prevention and control, and reduce maternal and neonatal mortality.

- Inequality, social protection, and urbanization:
  - PRSP highlights links between inequality, growth and poverty reduction and identifies performance indicators linked to the SDGs promoting gender equality and empowerment of women.
  - Suggest updating analysis on pension, food security and safety nets when new household survey data become available.
  - Urbanization: PRSP could discuss opportunities and challenges posed by urbanization and rural-to-urban migration; recommend integrated urban development to strengthen urban resilience and foster social and economic inclusion.

### Pillar 4 — Promoting Peace and Equal Opportunities
- Focus and recommendations:
  - Pillar 4 centers on implementing the peace agreement and addressing challenges in conflict-affected areas.
  - Recommend additional focus on peacebuilding and development needs at the community level.
  - Emphasize leadership and voice of women and youth as stabilizing factors; their engagement is critical to resolving division and exclusion.
  - Role of safety and security in facilitating sustainable return of IDPs and refugees highlighted; need for strategic reintegration plan and supportive institutional structures.
  - Note: Government of Sudan has a National Strategy for the Protection of Civilians; Peace Commission seeks international support for data collection on displaced Sudanese.
  - Warning: returns and restoration of land and assets are potential flashpoints requiring careful prevention and mitigation measures; international engagement and sharing regional experience recommended.

### Pillar 5 — Strengthening Governance and Institutional Capacity
- Objectives and priorities:
  - Establish a functioning federal system with institutional capacity to carry out core state functions via strengthening public financial management, decentralization, peace and security, and the fight against corruption.
  - Decentralization seen as a mechanism to improve targeting, especially in disadvantaged areas; recommendation to strengthen decentralization to ensure adequate resource allocation, enhance staff capacity on financial and procurement management, and improve basic service provision.

- Fiscal decentralization and revenue management:
  - Fiscal decentralization to be developed as part of constitutional reform and Peace Agreement implementation; delegation of spending linked to political authority conferred by constitution.
  - Plans include enacting a law establishing a National Revenue Fund to pool all nationally collected revenues and establishing a new National Commission for Resource Allocation.
  - Government plans to conduct and publicize analysis on the current fiscal decentralization system to guide reform for poverty reduction, improved social outcomes and reduction of regional disparities.

- Governance, procurement, and anti-corruption:
  - PRSP candidly acknowledges governance challenges and need for corrective measures; enactment of the Anti-Corruption National Commission Law and establishment of an independent Anti-Corruption Commission noted as cornerstones.
  - Procurement highlighted as a key source of corruption; recommended policy details include public and competitive tenders over a threshold, open advertisement of public job vacancies and awards, and enshrinement of changes in a new or revised Procurement Law.
  - Emphasize strengthening operational autonomy of the central bank as intended under Sudan’s IMF Staff-Monitored Program (SMP) and further consultation on legislative reform associated with AML/CFT.
  - Support for improving trust and accountability through increased participation, transparency, and equitable and efficient service delivery.

*Source: SUDAN, INTERNATIONAL MONETARY FUND (excerpts from provided PDF content).*

### 39.      Monitoring and evaluation is critical for effective and successful implementation of the

### 1sdnea2021006 - 39.      Monitoring and evaluation is critical for effective and successful implementation of the

### Monitoring and evaluation (M&E) framework and institutional arrangements
- M&E is critical for effective and successful implementation of the PRSP; addressing data and capacity limitations is key.
- The PRSP proposes government-driven aid, coordination, and oversight policies to progressively strengthen state capacities, building on the 2012 I-PRSP experience.
- Government commitments:
  - Establish a PRSP Implementation Oversight Committee including several government ministries (including the Ministry of Finance and Economic Planning, MoFEP) to provide overall oversight and guidance.
  - Establish a PRSP Implementation Unit within the MoFEP reporting directly to the Undersecretary of Planning in the MoFEP; the Unit to be tasked with day-to-day implementation and MoFEP to be responsible and accountable for monitoring.
- Staffs’ assessments and recommendations:
  - Support establishment of the Oversight Committee and Implementation Unit and recommend both be established at the earliest possible opportunity given the relatively short implementation timeline.
  - The PRSP could be clearer on how existing structures will be adapted for oversight and implementation.
  - Prepare clear terms of reference for the Unit’s implementation and M&E role and share them with key implementing agencies.
  - The Unit should prepare a monitoring and evaluation plan, collect necessary data, and prepare an implementation progress report covering the first year.
  - Technical assistance from development partners may be helpful.
  - Streamline M&E by simplifying institutional arrangements and defining clearly monitorable inputs and outcomes.
  - Strengthen coordination between the PRSP Implementation Unit at the MoFEP and other government units (notably the Central Bureau of Statistics and line ministries).
  - An Annual Progress Report should be prepared to keep track of implementation progress and take mid-term corrective actions as necessary.

### Budgeting, costing, and financing
- Future Budget Laws should be aligned with the PRSP by enhancing formulation of program budgets within key sectoral ministries on the basis of sectoral Medium-Term Expenditure Frameworks (MTEF) and the global MTEF, which defines sectoral budget envelopes.
- The PRSP lacks a costing and financing plan for proposed interventions.
- Staffs recommend:
  - Develop cost estimates for specific interventions under the PRSP as quickly as possible and use these to inform prioritization of expenditure in drafting the 2022 and future budgets.
  - Prepare and present a costing and financing plan only for the most immediate and highest priority interventions (and not for all interventions proposed in the PRSP).
  - To avoid parallel processes, strengthen existing public investment management systems and use them to cost investments proposed in the PRSP and integrate them into Sudan’s public investment program.
  - Costing will support planning of external fund raising with greater precision and assist debt sustainability considerations.

### Data gaps, statistical capacity, and survey priorities
- The PRSP is frank about data gaps but lacks a comprehensive strategy to address them; gaps include poverty, social and economic statistics; administrative data; and population and agriculture censuses.
- Sudan is preparing a new household poverty survey with World Bank support and has a pipeline statistical capacity development project financed through IDA19 to improve data availability.
- Staffs recommend:
  - Move quickly to develop an effective M&E system leveraging credible data sources including surveys and administrative data.
  - Initiate regular and frequent collection of data on employment.
  - Strengthen data collection capacity in the Central Bureau of Statistics and line ministries.
  - The M&E system should specify which data source will be used to monitor each PRSP goal, identify data gaps, and expected periods to fill those gaps.
  - Move forward quickly with implementation of the new National Household Budget and Poverty Survey (NHBPS) being prepared with World Bank support; new household survey data will facilitate monitoring toward the HIPC Completion Point requirement of satisfactory implementation of the full PRSP for at least one year.
  - Put in place a regular data collection system to track trends in poverty and other key socio-economic indicators.
  - Leverage the pipeline IDA project on data and statistics strengthening to improve frequency and regularity of data collection.

### Poverty analysis, targeting, and inclusions
- The main causes of poverty and required interventions were identified through poverty analyses and consultations; proposed strategies across the five pillars are consistent with this analysis given data limitations.
- Staffs encourage refining implementation as new data become available and allocating sufficient resources to speed up poverty analysis once the new household survey data are available.
- Staffs stress defining targets through consultations and recognizing institutional capacity constraints to generate ownership of the results framework.
- Gender considerations:
  - Gender aspects are mentioned throughout the analysis but are not prominent in the Policy Matrix.
  - Staffs recommend greater prominence for gender links, including: women's political representation and participation, women's rights in agriculture and informal economy, women's share of wage employment, women's land rights, gender responsive macro-economic policies, gender-based violence and justice/security sector reforms, and engagement with local communities.

### Climate, disasters, communication, and resilience
- The PRSP acknowledges the compounding poverty implications of climate shocks (floods and droughts) and provides a framework to combine poverty reduction with disaster risk reduction.
- A Post-Disaster Needs and Recovery Assessment highlighted that the 2020 Nile floods produced unprecedented damages and losses with severe poverty implications for health, education, and food security.
- PRSP strategic priorities include strengthening community resilience to climate change and enhancing government capacities for emergency preparedness and response.
- Staffs support PRSP plans to build capable communication systems using citizen engagement, transparency, and accountability to improve ownership and fit-for-purpose solutions across different groups.

### Risks to implementation and macroeconomic context
- Staffs identify significant implementation risks:
  - Annual inflation accelerated to over 300 percent in 2021 and achieving stability in this context will not be easy.
  - Patience of the population is tested and popular protests are on the rise.
  - Limited M&E capacity within the civil service and funding shortages could delay implementation.
  - Fiscal projection risks, especially timing of the full effect of tax policy measures and political capital needed to eliminate energy subsidies.
  - Macro-critical governance weaknesses and fragility of the transition contribute to downside risks.
  - High risks to Foreign Direct Investment (FDI) projections.
  - Public investment uncertainty due to: ad hoc tax concessions under the Investment Law, public procurement capacity, fiscal risk management under PPP framework, and severe governance problems.
  - Staffs note climate and natural disaster risks should be highlighted as facts to be managed as part of development due to impacts on social relations (e.g., conflict between pastoralists and farmers).
  - Additional risks include: (i) delayed political transition; (ii) a protracted and more severe impact from COVID-19; (iii) continued border clashes and regional conflict spillovers; (iv) failure to create an enabling environment for private sector-led development; (v) governance and transparency reform progress hampered by vested interests; and (vi) limited data on poverty, social, economic and financial indicators impeding development of a clear medium-term macroeconomic framework linked to poverty outcomes.

### Near-term priority actions recommended by staffs
- Prepare and present a costing and financing plan only for the most immediate and highest priority interventions.
- Strengthen existing public investment management systems and use them to cost PRSP investments and integrate them into Sudan’s public investment program.
- Establish a system for monitoring the implementation status of the strategy, including immediately establishing the proposed PRSP Oversight Committee and Implementation Unit.
- Streamline the M&E process by simplifying institutional arrangements and defining clearly monitorable inputs and outcomes; prepare an Annual Progress Report on sectoral interventions.
- Adjust the strategy (as a planning process, not the paper) to strengthen the link between macro/structural policies and poverty reduction; refine implementation as new data become available and take corrective measures as necessary.
- Prepare for flexibility in implementation priorities given high uncertainty.
- Move forward quickly with implementation of the NHBPS and build a regular data collection system to track poverty and key socio-economic indicators; leverage the pipeline IDA project on data and statistics strengthening.
- Ensure continuous communication of the PRSP and its implementation to secure citizen buy-in and strengthen the social contract.

*Source: 1sdnea2021006 - 39.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1sdnea2021006.pdf_