Additional Financing - Sudan Family Support Project

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The Government of Sudan (GoS) is responding to urgent needs to stabilize the economy and begin a long process of clearing arrears to MFIs as part of the Sudan’s larger macroeconomic stabilization and integration. These measures are expected to include exchange rate liberalization/unification and reallocation of public resources away from commodity subsidies, tax exemptions, towards social and development needs. These fiscal adjustments are expected to contribute to furthering an already deteriorating economic situation in Sudan which has impacted vulnerable people’s abilities to cover basic needs. These challenges facing households are compounded by the economic shutdown recently imposed to mitigate the effects of the Corona Virus pandemic (COVID 19) in some regions of Sudan. Accordingly, the GoS has requested support from the donor community to establish the Sudan Family Support Program (SFSP) to provide cash transfers to 80 percent of the population, i.e., to about 32.5 million individuals, with an annual cost of US $1.9 billion. The SFSP would continue for up to two years, depending on financing availability. The GoS will contribute its own budget to the SFSP, particularly as the program enters later phases and transitions to the longer-term support to permanent social safety nets. The project’s development objective is to deliver cash transfer support to Sudanese households affected by expected economic reforms and other short-term shocks. To this end, the project includes three components. These are: Component 1, Provision of Cash Transfers, to provide cash transfers to selected households; Component 2, Establish Delivery Systems and Build Institutional Capacity; and Component 3, Project Management, Monitoring and Evaluation, and Learning. The Additional Financing (AF) will help scale up the original project towards its more ambitious targets. The PDO would remain unchanged. The original project supports Phase 1 of GoS’s SFSP and has been appraised at US$400 million. The AF will support the SFSP in its expansion towards full scale and would contribute to the three original components. With the AF, the project would be able to cover an additional 11.3 million individuals (equal to an additional 2 million families) in new geographical areas. With the beneficiaries covered by the original financing, the total number of beneficiaries for the SFS Project (original plus AF) would reach 22.6 million individuals, or 4 million families. The geographical areas (states) to be covered by the AF will be discussed and decided on with the Government during the implementation phase of the original financing and will be recorded in the Bank-approved POM.The first states and subsequent scale up will consider issues of; (i) poverty head count; (ii) existing implementation capacity of safety nets programs; (ii) payment infrastructure and (iv) presence or absence of UN agencies in those states and (v) rural/urban consideration or a combination of all these factors. Based on these factors, Phase 1 project implementation will start in the states of (i)Khartoum, (ii) Red Sea; (iii) South Darfur and (iv) Kassala. Based on the external resource flows the design of the second phase will start immediately after the delivery of the first phase and will expand to more states.