The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) Project Information Document (PID) Concept Stage | Date Prepared/Updated: 08-Nov-2022 | Report No: PIDC35233 Nov 07, 2022 Page 1 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) BASIC INFORMATION A. Basic Project Data OPS TABLE Country Project ID Parent Project ID (if any) Project Name Sudan P180348 Sudan Resilience Safety Nets Project (SRSNP) (P180348) Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) EASTERN AND SOUTHERN Mar 30, 2023 Apr 28, 2023 Social Protection & AFRICA Jobs Financing Instrument Borrower(s) Implementing Agency Investment Project Financing World Food Programme World Food Programme Proposed Development Objective(s) The objective of this project is to improve resilience to shocks among the poor and vulnerable population in Sudan. PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 300.00 Total Financing 300.00 of which IBRD/IDA 0.00 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Trust Funds 300.00 Sudan Country Engagement 300.00 Environmental and Social Risk Classification Concept Review Decision Substantial Track II-The review did authorize the preparation to continue Nov 07, 2022 Page 2 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) B. Introduction and Context Country Context 1. Sudan started a window of opportunities when Sudanese people established a Transitional government in August 2019 in terms of economic stabilization, poverty reduction, and a potential increase in the wellbeing of the Sudanese society. A new, more inclusive but fragile political settlement following the revolution created great expectations across Sudan of tangible change from the Transitional government. Sudan spent many years isolated, with significant limitations in its participation in the globalized economy. However, the transitional government started a process of re-engaging with the international community. The Transitional Government of Sudan developed an ambitious program to address deep-rooted political, economic and social challenges. In October 2021, a military takeover in Sudan resulted in a de facto government, led by a new Sovereign Council with contested legitimacy by the public and an acting Council of Ministers. In response to this situation, the World Bank triggered Operational Policy (OP) 7.30 - Dealings with De Facto Governments, which halted disbursements to Government in all World Bank operations and processing of new operations in Sudan, effective October 25, 2021, while closely monitoring the situation. The ensuing period has been marked by violent crackdowns, sexual and gender-based violence, and extrajudicial detainments. Violence in Darfur and other conflict-affected areas has also intensified starkly since the military takeover. The state of the economy has become increasingly precarious, exacerbated by social unrest, shortages, and the freeze of foreign assistance. The economic situation may further be impacted by expected shortages in the global supply of wheat, which raises alarming humanitarian and food security concerns in the context of a prevailing fiscal deficit. Overall, the situation remains fluid with no signs of progress and will likely hinge on the ability of the political parties, resistance committees, the military- security apparatus, and international partners to find a workable way forward. 2. Sudan’s economic performance has been weak and characterized by a high prevalence of poverty and unemployment. During the last ten years, Sudan’s average Gross Domestic Product (GDP) growth rate has been below 3 percent with negative growth rates in 2018 (-2.3 percent) and 2019 (-2.6 percent). Sudan’s unemployment rate in 2019 was 12 percent with youth unemployment at 26.7 percent. The deteriorating economic situation has further affected vulnerable people’s abilities to cover basic needs. The current poverty incidence in Sudan is not known. It is estimated that poverty rates increased in 2021, reaching 21.5 percent at US$1.90 per day purchasing power parity (PPP), from 20.2 percent in 2020.1 Recent employment data support this estimated trend; 26 percent of men and 10 percent of women lost their jobs at the onset of the Coronavirus Disease 2019 (COVID-19) pandemic and remained unemployed in April 2021.2 3. Poverty in Sudan has increased consistently in recent years and is urbanizing at a moderate rate. The poverty rate based on US$1.90 per day increased in urban areas from 4.2 percent to 9.5 percent between 2009 and 2014.3 Using 1 World Bank, Macro Poverty Outlook, April 2022 2 High-Frequency COVID-19 Survey, 2021 3 World Bank, 2019. Sudan Programmatic Poverty Assessment: Poverty and Inequality in Sudan, 2009-2014. World Bank Nov 07, 2022 Page 3 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) US$3.20 as the national poverty line, urban poverty increased from 21.4 percent to 39.8 percent. Key drivers of poverty include low education attainment; lack of skills and livelihood opportunities; low financial literacy and inclusion; and wide gaps in access to public services such as health, sanitation, transportation, and solid waste collection.4 Average per capita consumption in Khartoum and in the northern region (Northern and River Nile states) in 2014 was about 26 percent and 18 percent higher than the national average. Poverty rates vary significantly across states, with above-average rates observed in Red Sea State, Kordofan, and Darfur. 4. Higher inflation, particularly food price inflation, has likely pushed many households deeper into poverty. Inflation reached 220.7 percent in April 2022, a slight decline from the previous month but by far the highest in the East Africa region. High inflation, particularly food price inflation, has likely pushed many urban households deeper into poverty, as they rely on markets for their essential needs to a greater extent than rural households. In recent years, food insecurity has worsened in Sudan, from 2.8 million in April 2017 to 9.8 million in May 2021, driven by a plummeting economy, poor harvests, and conflict.5 The poor harvest in the 2021/22 agricultural season has led to decreasing cereal production, which is 30 percent below the five-year average. 5. Climate change is a fundamental fragility driver in Sudan. Sudan is among the most vulnerable countries to climate change and variability. Increased frequency of droughts and high rainfall variability over the past few decades have already stressed the region's rainfed agriculture and pastoralist systems, which are the dominant livelihoods in rural areas. Other vulnerable groups negatively affected by climate change include populations that subsist on aquaculture, natural ecology systems and biodiversity, and water resources. These effects ultimately increase communities' vulnerability, particularly farmers that rely on traditional farming practices and pastoralists. This is further compounded by the impact of the economic crisis, high inflation, and the diminishing purchasing power of people in Sudan.6 6. Most recently, Sudan has experienced flash floods that have resulted in the loss of life and property.7 According to the Government’s Humanitarian Aid Commission, about 226,200 people were affected by unseasonably torrential rains in August 2022. The States most affected by recent floods include Gedaref, Central Darfur, South Darfur, White Nile, and Kassala. The 2022 Sudan Emergency Response Plan (ERP) estimates that about 460,000 people could be affected by the floods in 2022. Sectoral and Institutional Context 7. Sudan receives significant humanitarian assistance from United Nations (UN) agencies for internally displaced persons (IDPs), refugees, and conflict-affected populations. The UN, primarily through the World Food Programme (WFP), United Nations Children’s Fund (UNICEF), and United Nations Commissioner for Refugees (UNHCR) addresses acute needs of the population, including IDPs, refugees, returnees, and vulnerable residents. Humanitarian partners have been investing to help prevent and mitigate the impact of shocks including floods, disease outbreaks, severe malnutrition, food insecurity, and displacement. The UN administration of humanitarian assistance is expected to continue, given 4 The State of Economic Inclusion – World Bank (2021) 5 Sudan: Integrated Food Security Phase Classification Snapshot | April 2022 - February 2023 6 United Nations Office for the Coordination of Humanitarian Affairs (OCHA), 27 Mar 2022, Sudan: Humanitarian Update, February 2022 (No. 02) 1 – 28 February 2022 7 ibid Nov 07, 2022 Page 4 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) Government capacity constraints in providing services to remote regions. Coordination of the proposed project with humanitarian assistance will be critical for success. Furthermore, while UN agencies have delivered this assistance using their systems and staff, these arrangements typically do not support local capacity building or sustainability. As such, this project aims to build foundations for institutional sustainability of safety net delivery systems innovatively. 8. Before the transitional government was in place, the Government of Sudan (GoS) operated a Social Safety Net program supported by Sudan Multi-Partner Fund (SMPF) which provided cash transfers of 450 Sudanese Pounds (SDG) (about US$8 at the official exchange rate) per family per month to 500,000 poor and vulnerable families in all 18 states. While this ‘Social Initiative Program’ managed by the Ministry of Labor and Social Development (MoLSD) provided a framework for cash payments, the payments have been irregular since 2018 given the weaknesses and disruptions in administrative capacity. MoLSD has piloted digital payments in Khartoum, while Sudan postal service (Sudapost) offices, Zakat chambers, and select rural state-owned bank branches or banking agents are used for payment in other states outside the capital. 9. The GoS, therefore, requested support from the donor community to implement the Sudan Family Support Project (SFSP - P173521). The US$400 million project was comprised of US$200 million from IDA and US$200 million from the Sudan Transition and Recovery Support Multi-Donor Trust Fund (STARS). The STARS is an umbrella coordination platform for World Bank engagement in Sudan, created to support the Government of Sudan’s economic and peacebuilding transition. STARS partners include 14 donors of the European Union, United Kingdom, Canada, Finland, France, Germany, Ireland, Italy, the Kingdom of Saudi Arabia, Netherlands, Norway, Spain, Sweden, State and Peace Building Trust Fund (SPF). The objective of the project was to deliver cash transfers and improve safety net systems to support the Sudanese families affected by expected economic reforms and other short-term shocks. 10. As of December 31, 2021, the SFSP reached 2.7 million families, comprising over 6.5 million individuals registered out of a target of 9.5 million. Of the 2.7 million households, 33 percent had enrolled as female primary grant recipients against the target of 50 percent. Project implementation was rolled out to 14 States in Sudan. Approximately SDG 30.3 billion (US$80.7 million equivalent) had been transferred to 1.4 million families (4.6 million individuals). 11. With the activation of OP 7.30, implementation of SFSP was halted and all operations with GoS have paused. Since then, the World Bank has been unable to work directly with GoS. However, Sudan’s economic and food security situation has continued to deteriorate. In response, a US$100 million Sudan Emergency Safety Nets project (SESNP P178989) was approved on July 15, 2022, to provide unconditional cash transfers and food support to two million food insecure people in selected project areas of Sudan. This emergency project, which is expected to close in June 2023, is financed by STARS trust Fund and being implemented by WFP in 12 states and 81 localities. Under this project, 1.78 million and 100,000 beneficiaries have received cash and food transfers, respectively, over four months. SFSP and SESNP form the basis of investments to respond to emergencies and address immediate food security needs in Sudan. 12. This proposed project aims to begin building the foundations for strengthening the resilience of poor families, while continuing to address immediate food security needs. This is in response to the fact that households need to build resilience against ongoing shocks, such as violence and weather-related events that frequently occur in Sudan. Poor and vulnerable communities will be targeted and integrated into a safety net system that can be scaled up rapidly to respond to mitigate the impacts of shocks. Households will be supported with interventions that can be adapted to the specific needs that emanate from various shocks. The safety net delivery system will be simple in design, adaptable to varying Nov 07, 2022 Page 5 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) contexts within Sudan, and capable of expanding rapidly to cover affected households, or scaled back as the situation stabilizes. 13. This project will largely support households' resilience through unconditional cash transfers, with a small pilot of conditional cash transfers to beneficiaries in rural and urban areas. The proposed project will also serve as a basis for building resilience and supporting livelihoods through a small pilot of conditional cash transfers to Sudan's poorest and most vulnerable communities. With OP 7.30 still in effect in Sudan, it is proposed that WFP will be the direct recipient of the proposed project funds and act as a third-party implementing agency. However, this project will integrate innovative mechanisms of building institutional capacity that can be sustained in Sudan when OP 7.30 is lifted. In the meantime, the SFSP will be restructured, and the Trust Fund portion of the credit will be used for this new proposed project. The International Development Association (IDA) portion will remain under the restructured SFSP until the OP 7.30 is lifted. Relationship to CPF 14. The proposed project aligned with the current World Bank Country Engagement Note (CEN) for the Republic of Sudan for 2021-2022. Specifically, the proposed project will contribute to the CEN’s Focus Area 1: re-engagement and is aligned with Objective 1.2 “Mitigating the Impact of Economic Reforms and COVID-19� on the Sudan population. The World Bank supported the implementation of the SFSP to achieve objective 1.2. However, the implementation of the SFSP was halted due to a military coup that disrupted the democratic transition in the country. Additionally, the proposed SRSP is in line with the IDA19 Remaining Engaged during Conflict Allocation (RECA) Eligibility Note, which underscores the importance of investing in institution building and human capital development in South Sudan. The project is also well aligned with the World Bank’s Africa Regional Strategy (2018) and FCV Strategy (2020). C. Proposed Development Objective(s) 15. The objective of this project is to promote resilience through unconditional and conditional cash transfers among selected populations in Sudan. Key Results (From PCN) 16. The key project development outcomes and results that will be used to track the progress toward these objectives are: (a) Beneficiaries of social safety net programs (CRI, Number) (b) Number of beneficiary households/individuals receiving unconditional cash assistance (CRI, Number) (c) Number of beneficiary households/individuals receiving conditional cash assistance (CRI, Number) (d) Beneficiaries satisfied with the delivery of cash transfers (Percentage) (e) Number of beneficiaries paid through digital systems D. Concept Description Nov 07, 2022 Page 6 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) 17. The project aims to build resilience and promote equity through (i) unconditional cash transfers to extremely poor, labor-constrained households, (ii) opportunities for employment and asset creation through piloting conditional cash transfers for farmers, unemployed youth, and workable poor adults. Conditional and unconditional cash transfer programs are known for their impacts on reducing negative coping strategies, reducing poverty, improving nutrition, facilitating social inclusion, particularly among women and ensuring income security. The project will also reach pregnant mothers, children under 5, internally displaced people (IDPs), vulnerable households living on the outskirt of the cities, and people with disabilities from poor households. The project will target female family members as the primary recipients of the assistance. The number of beneficiaries will be determined during project preparation and appraisal. The project will target states and localities with the highest rate of poverty and vulnerability. Within the states and localities, geographic targeting will be used to select the poorest and most vulnerable communities. A systematic targeting approach (which will include a component of community-based targeting) will be defined as part of the project design. 18. The following principles will guide the proposed project: (i) simplicity in design; (ii) close collaboration with partners for strengthened humanitarian-development-peace nexus, (iii) a gender-mainstream approach for inclusion; (v) use of technology to strengthen and speed up delivery of the operation; and (vi) community-driven and conflict-sensitive implementation (including community participatory approaches during targeting and implementation to strengthen community voice). Support will be provided to mitigate the latent and potential conflicts in the states and localities and encourage social cohesion between the host communities and IDPs. 19. The design and implementation modalities will also consider the challenging institutional and social context inherent in delivering such type of transfer project in a Fragility, Conflict and Violence (FCV) country . Identification, targeting, and delivery mechanisms will be adapted to meet the unique challenges of different states in Sudan. This project will use some of the delivery systems developed under the SFSP and SESNP. The systems will include community targeting, enrollment, and registration, grievance redress mechanisms, payment systems, and data that will be collected during implementation. Targeting will be data driven, using the existing poverty maps and other credible sources of data. The design of the project will be informed by lessons learnt from the implementation of the SFSP and SESNP, as well as analytical work by the World Bank and partners in the social sector in Sudan. Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts . Nov 07, 2022 Page 7 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) . CONTACT POINT World Bank Endashaw Tadesse Gossa, Suleiman Namara Senior Social Protection Specialist Borrower/Client/Recipient World Food Programme Eddie Rowe Country Director and Representative eddie.rowe@wfp.org Implementing Agencies World Food Programme Eddie Rowe Country Director and Representative Eddie.rowe@wfp.org FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Task Team Leader(s): Endashaw Tadesse Gossa, Suleiman Namara Approved By APPROVALTBL Practice Manager/Manager: Country Director: Milena Petrova Stefanova 29-Nov-2022 Nov 07, 2022 Page 8 of 9 The World Bank Sudan Resilience Safety Nets Project (SRSNP) (P180348) Nov 07, 2022 Page 9 of 9