New World Bank Group Country Engagement Note to Support Inclusive and Equitable Growth Path for Sudan

The World Bank Group’s Board of Executive Directors today endorsed a new Country Engagement Note (CEN) for Sudan. The CEN is aimed at supporting the Government of Sudan’s efforts to reform the economy, build a more equitable social contract, and provide a better future for Sudanese people.

“To end extreme poverty and lift people up from a history of fragility and conflict, Sudan must ensure access to basic services, stable jobs, transparent and accountable institutions, and economic and social inclusion,” said Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa. “The World Bank’s engagement will support the country’s development vision, focusing on macro-economic stability, job creation, and sustainable development for all Sudanese people.”

Since 2019, the government has taken bold steps to resolve long-standing internal conflicts, reverse economic distortions, renew the social contract, and re-engage with the international community. Substantial resources are needed to address these challenges, given their deep-rooted nature. Years of international isolation and various embargoes have prevented Sudan from accessing much needed external financing and support at a time when it is most needed. The COVID-19 crisis as well as recent floods have exacerbated an already complex situation.

“The government of Sudan has taken commendable steps to tackle economic, social and political challenges that have been years in the making. The speed and scope of the reforms present a compelling case for the international community, and the World Bank Group in particular, to step up its engagement in the country to reduce poverty and promote shared prosperity,” said Ousmane Dione, World bank Country Director for Eritrea, Ethiopia, South Sudan and Sudan.

This CEN focuses on helping the Government of Sudan to stabilize the economy and accelerate progress towards addressing the country’s debt challenges, including clearing arrears to the World Bank. It lays out steps to facilitate Sudan’s re-engagement with the international community, which will unlock access to substantial external financing, especially from the WBG. The CEN also outlines activities to support structural and institutional reforms to contribute to rebuilding a more equitable social contract in Sudan. These activities lay the groundwork for more expansive engagement that may be undertaken after arrears clearance, at which time a full-fledged WBG program is envisaged. Cross-cutting themes of social inclusion and citizen engagement are a critical component of the CEN program, given the importance of these issues in Sudan’s still fragile context and their centrality to a renewed social contract in the country. The focus areas of the CEN are also fully aligned with the World Bank Group Strategy for Fragility, Conflict, and Violence, which highlights the importance of macroeconomic stabilization and debt sustainability, strengthening institutions and governance, and fostering private sector-led growth and job creation.

“We strongly believe that unlocking private investment will be critical to Sudan’s growth, even more so amid the current COVID-19 pandemic. Sudan’s economic future and successful reengagement with the international community will depend first and foremost on its ability to create an enabling environment that allows the private sector to flourish, supporting the country’s development goals and creating jobs,” said Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa.

Consistent with the new CEN, the Board also approved a $200 million Pre-Arrears Clearance Grant for the Sudan Family Support Program (SFSP). This is in addition to $200 million approved by Management from the Sudan Transition and Recovery Support Trust Fund (STARS), of which $170 million has been received from donors to-date for the first phase of the SFSP. The project aims to deliver cash transfers and improve safety net systems for Sudanese families affected by expected economic reforms and other short-term shocks. SFSP is led and implemented by the Sudanese government. The Program is being implemented by the Ministries of Finance and Economic Planning, Labor and Social Development, and Interior, along with other relevant agencies, and will be executed by the Digital Economy Agency. The pilot phase is being launched in October 2020, and the program will be gradually scaled up over the next few months, starting with the states of Khartoum, Red Sea, South Darfur and Kassala. Critical financing for the first phase of the SFSP has been provided by generous contributions from the European Union, Germany, Ireland, the Netherlands, and Sweden. It is anticipated that additional donor contributions will be received to cover the balance needed to fully fund the first phase.