Sudan

Sudan Emergency Safety Nets Project (SESNP) (P178989) Social Impact Assessment (SA), August 2022

Attachments

1. Introduction

Sudan has been characterized by a high prevalence of poverty and inequality with marked spatial disparities. The deteriorating economic situation has further affected vulnerable people’s abilities to cover basic needs. The current poverty incidence in Sudan is not known. The latest National Household Budget and Poverty Survey (NHBPS) was conducted in 2014/15, and the country has since undergone significant social and economic transformations. Based on the international poverty lines, the share of Sudanese living on less than US$1.90 and US$3.2 per capita per day purchasing power parity (PPP) in 2014 was 12.2 percent and 44.0 percent, respectively. Poverty rates vary significantly across states, with above-average poverty rates observed in Red Sea state, Kordofan, and Darfur. Poverty has increased consistently in recent years, and it is urbanizing at a moderate rate (concentrated in Khartoum). The protracted economic crisis, compounded by the recent COVID-19 pandemic, is expected to have deteriorated standards of living significantly more. It is estimated that poverty rates have increased in 2021, reaching 21.5 percent at US$1.90 per day PPP from 20.2 percent in 2020. This estimated trend is supported by recent employment data; 26 percent of the men and 10 percent of the women who lost their jobs at the onset of COVID-19 remained unemployed in April 2021 (high frequency COVID-19 survey). The food insecurity shock is likely to further worsen the poverty and inequality challenges in Sudan.

Poverty in Sudan is urbanizing and there is a large regional disparity in poverty incidence. 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. Using US$3.20 as the national poverty line, urban poverty increased from 21.4 percent to 39.8 percent. Urban poverty is increasingly concentrated in Khartoum: in 2014, 41 percent of the urban poor live in Khartoum, up from 23 percent in 2009. 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, respectively. On the other hand, average per capita expenditure was 8 percent and 18 percent lower than the national average in Kordofan and Darfur. However, the state with the lowest level of per capita consumption in 2014, with 20 percent below the national average, was Red Sea State in the east. Per capita consumption in urban areas was around 30 percent higher than in rural areas.

The food security situation has worsened as a consequence of the macroeconomic crisis. Sudan’s food market prices continue to rise due to the worsening socio-economic, political, climatic conditions, insecurity, and localized violence in parts of the country. Both internal and external shocks are escalating, consequently affecting food prices by limiting access, especially for the poor and vulnerable. The World Food Programme (WFP) Comprehensive Food Security and Vulnerability Assessment indicates that 34 percent of the general population (over 15 million people) were food insecure during the first quarter of 2022, and forecasts that up to 39 percent (18 million people) will be food insecure by the third quarter of 2022. Effects of conflict, economic crisis and poor harvest are key drivers of this food insecurity and are significantly affecting people’s access to food. The high food prices will, if not checked, worsen the already persistently high levels of acute malnutrition and stunting. The national prevalence of global acute malnutrition is estimated at 13.6 percent, while stunting is estimated at 36 percent.

Sudan will face significant negative food security implications as the world is heading towards a historic food price crisis. Global price indexes are at a record high due to the Russian invasion of Ukraine and already high food prices. This is believed to result in a worsening poverty situation in Sudan. Ukraine provided a buffer for the food security of billions of people worldwide including Sudan. Agriculture commodity prices have already increased. As the markets adjust to the Russia-Ukraine conflict, including limited cereal harvest in Ukraine this year, further spikes and price volatility could be expected. As Sudan imports over 50 percent of its wheat from Russia and Ukraine, the ongoing war in Ukraine is expected to exacerbate food insecurity in Sudan.

Higher inflation, particularly food price inflation, would push many households deeper into poverty. Inflation reached 220.7 percent in April 2022, which is a small decline from the previous month but by far the highest in the East Africa region. High inflation, particularly food price inflation, would push many urban households (deeper) into poverty, as these households rely on markets for their essential needs to a greater extent than rural households. The economic shutdown to mitigate the effects of the COVID-19 pandemic in some regions of Sudan also significantly contributed to the decline in household welfare. Food insecurity has worsened in Sudan in recent years, from 2.8 million in the Integrated Food Security Phase Classification (IPC) Phase 3 and above in April 2017 to 9.8 million in May 2021. The vulnerable population has also been experiencing other shocks, such as climate change, natural disasters, and macro-economic shocks.

As a result, there is an increased food assistance need in Sudan. While the final figures from IPC are due at the in early June 2022, WFP’s Comprehensive Food Security and Vulnerability Assessment, conducted in the first quarter of 2022, indicates that 34 percent of the population in Sudan are food insecure and that food insecurity has increased across most states in the past year. This will likely continue to rise come the lean season when food stocks run low. The poor harvest in the 2021/22 agricultural season has led to a cereal production which is 30 percent below the five-year average. Higher costs of imported commodities and goods caused by trade and supply chain disruptions due to embargoes, prohibitive insurance prices, and the closure of Ukrainian seaports would add to elevated prices of global hard commodities (energy and metal) and soft commodities (agricultural products). Food security is of top concern as exports from the Russia-Ukraine conflict area are disrupted and have led to higher prices, including through reduced supply of cereals, edible oils, crude oil, and fertilizers.

With the pause of government programs under OP 7.30 remaining in effect and with Sudan’s current deteriorating economic and food situation, the country requires immediate assistance. The Republic of Sudan continues to face challenging times fraught with ongoing political instability and difficult economic conditions that have tested the limits of its population’s resilience. At the same time, the World Bank and development partners are seriously concerned about the food security risks and impending humanitarian crisis compounded by the Ukraine-Russia conflict and cannot turn a blind eye to the dire situation of Sudanese people. The World Bank and development partners (DPs) have, therefore, come together to find a way to meet the urgent needs of the Sudanese people. Through the generous support of donors under the World Bank administered Sudan Transition and Recovery Support Trust Fund (STARS), $100 million will be provided through the Sudan Emergency Safety Nets Project (SESNP) to help address the immediate food security needs of the most vulnerable Sudanese. This is a critical initiative because the population is facing multiple shocks, both national and international, resulting in high national and international commodity prices and severe food scarcity. Delaying a response would have devastating effects on the vulnerable poor in Sudan.

The proposed project will respond to the need to assist the Sudanese who are faced with a tremendous food insecurity crisis. In agreement with the DPs, this emergency project aims to mitigate the short-term effects of the food insecurity crisis on Sudanese households and communities. To that end, the proposed project will serve as a platform for provision of cash and food support to the most vulnerable population in Sudan while disbursements to Government under all Bank projects (including the Sudan Family Support Program) remain on pause under OP7.30. As the World Bank is operating under OP 7.30, and consistent with the proposed Project Development Objective (PDO), WFP will be the direct recipient of the grant funding, as well as act as a third-party implementing agency.
WFP with its implementing partner civil societies and non-government agencies will be the institutional home for the proposed project including the beneficiary database management. The UN WFP will be responsible for the day-to-day implementation of the project by deploying the required personnel for the implementation of the project through implementing partner civil society and non-government organizations.

WFP has existing Environment Policy, which includes requirements for environmental and social risk management with procedures/protocols, emergency preparedness and response, capacity building, training, monitoring and reporting. This project requires the implementation of an environmental and social risk management instruments prepared for this Project scope, characteristics and risks – i.e., regarding food transport, storage and distribution, and the WFP Environment Policy. WFP’s Environmental Policy (2017) establishes environmental values and policy tools that enable WFP to consistently respond to environmental risks and opportunities for improvement to better equip WFP to help achieve the Sustainable Development Goals and end hunger.

This Social Impact Assessment (SIA) is prepared to me meet the requirements of the World Bank ESF. The Social Assessment was conducted with the primary objective of identifying the potential key social risks and impacts of the proposed project to inform the project implementation and propose mitigation measures to address those risks and ensure the project is accessible to all, including vulnerable groups. To ensure ESF compliance in the implementation of the project, the WFP and its implementing partner entities will implement activities identified in this SIA.