$370m agreement signed for Sudan ‘Samarat’ family support programme

The government of Sudan and the World Bank signed a $370 million grant agreement yesterday to support economic reforms of the transitional government in Sudan, the sum of which includes $200 million from the World Bank and $170 million from Europe.

The European Union, the United Kingdom, the Netherlands, Ireland, Germany and Sweden are expected to contribute to the $170 million figure.

Additional financial contributions from donors will make up the total approved amount of $400 million required to implement the first phase of the Family Support Programme “Samarat”.

The programme aims to reduce the impact of economic reforms on low-income families by providing cash transfers, and improving social protection systems and safety nets.

World Bank country director, Ousmane Dion, said that “Sudan has taken steps that deserve support and admiration, and that this is a tribute to Sudan government for the start of a new phase of democratic rule.” Speaking at a press conference in Khartoum, he said that now Sudan is once again part of the international community, it will benefit from international support, international financing institutions.

It is expected that about 11.3 million people will benefit from the first phase of the project, which represents 33 per cent of the total number of beneficiaries of the programme. The first phase of the project will be implemented in the five states of Darfur as well as Khartoum, Kassala, and Red Sea state.

Sudan’s newly established Social Security Commission reported in September that 77 per cent of Sudanese now live in poverty. According to a Cost of Hunger Africa study, it is estimated that 172,866 child deaths in Sudan were directly associated with undernutrition in the last five years, 37.7 per cent of all child mortalities.

Structural economic reforms

Acting Finance Minister Heba Mohamed said that the grant, which was signed with the World Bank will directly support Sudanese citizens, especially poor families.

The money will be transferred to the Sudan Transition and Recovery Support (STARS) Multi Donor Trust Fund, administered and managed by the World Bank.

During the signing ceremony yesterday, she described the grant as a “major support for structural economic reforms” which aim to create a recovering economy, control inflation, and reactivate the wheel of production.

The International Monetary Fund (IMF) endorsed a Staff-Monitored Programme (SMP) in end September, based on the government's request for assistance for its economic reform programme.

The 12-month SMP aims to support the government’s own programme of reforms in order to stabilise the economy, improve competitiveness, and strengthen governance.The implementation of the programme will make Sudan eligible for more than $ 1.5 billion annually in direct development grants to stimulate investment and revive the economy.

However, financial analyst Hafiz Ismail expects the fund programme to be accompanied by harsh economic measures that will have a major impact on the economy.

"The IMF offered the government aid amounting to $400 million, in exchange for an increase in the official exchange rate from SDG55 to SDG130. Yet, an increase of the Dollar rate exchange rate on the parallel market is expected, in light of the scarcity of hard currencies in the country," he said. "This will of course increase the inflation."

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