74050 DELIVERING RESULTS SOUTH SUDAN 2011 ANNUAL REPORT Multi-Donor Trust Fund for South Sudan Contents Overview 4 Performance achievements 11 Intensifying implementation 28 Financials 34 Moving forward 39 Foreword In 2011, the international community joined the citizens and leaders of the world’s newest nation in celebration of its peaceful and hopeful transition to sovereignty. The road to independence has indeed been a long and tumultuous journey, with countless sacrifices along the way, and all those who dreamt and persevered should be honored. And so with this milestone reached, the ongoing efforts to rebuild South Sudan continue as strong as ever. For the team working on the Multi-Donor Trust Fund for South Sudan (MDTF-SS), that meant keeping our focus directly on results we are achieving, building on the turnaround in recent years. The MDTF-SS and its counterpart, the Sudan National Multi-Donor Trust Fund, were es- tablished in 2005 to assist with postconflict recovery and, in South Sudan, help the government and the citizenry lay a foundation for eventual self-governance. Trust Fund projects have pro- duced many tangible results, making significant development contributions to a region in great need. Through the end of 2011, 12 of 18 overarching projects supported by the MDTF-SS were still ac- tive. Six projects were completed, delivering results in capacity building, livestock and fisheries, water and sanitation, and the police and prisons network, in addition to a census and currency reform completed in previous years. Despite South Sudan’s difficult operating environment, all active projects received at least moderately satisfactory ratings from the monitoring agent. On the financial side, cumulative disbursements totaled more than $486 million, representing near- ly 90 percent of funds committed by donors and the Republic of South Sudan. To sustain the turnaround in 2011, we intensified the attention given to the entire implementa- tion process. We took steps to improve monitoring and evaluation practices and to deliver more accurate and harmonized results reporting. As a result, we are in a stronger position to track progress toward results for all projects and ensure that they are on track for closure in line with their ultimate objectives. We also strengthened government procurement capacity with hands- on training sessions that were extremely well-received. The year, beginning with the referendum vote in January and a jubilant independence celebra- tion in July, closed in December with a major South Sudan conference in Washington, DC. The event was hosted by the U.S. government and aimed to further engage South Sudan officials with partners for development and investment. Even with this historic year behind us, a continuing commitment is needed. For the MDTF-SS, that means guiding all active projects to successful completion. As 2012 began, we made a renewed commitment to achieve this goal. Laura Kullenberg Country Manager, Republic of South Sudan 1 At a glance: about South Sudan The 2005 Comprehensive Peace Agreement (CPA) stipulated the establishment of two governing en- tities in Sudan: the Government of National Unity for 15 northern Sudanese states and the Govern- ment of Southern Sudan (established as a semi-autonomous entity under the Government of National Unity) for 10 southern states. The CPA served as a six-year peace-building and state-building frame- work directly addressing the key causes of war, displacement, and underdevelopment and providing for nationwide elections. It established a wealth-sharing protocol between the two governments and allowed for the January 2011 referendum on self-determination held in Southern Sudan. The referen- dum passed with 98.8 percent support, and in July 2011 the independent state of the Republic of South Sudan was established. 28˚E 30˚E 32˚E To 34˚E This map was produced by the Map Design Unit of The World Bank. Khartoum The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Renk 0 50 100 150 Kilometers SUDAN To To Kadugli Ed Damazin 0 50 100 150 Miles SOUTH To To Babanusa SUDAN Nyala Paloich Arab Bahr el ' 10˚N To 10˚N Nyala UPPER NILE ABYEI Kodok Abyei l Ghazal NORTHERN Ba h r e Malakal BAHR AL Bentiu Lol GHAZAL UNITY ETHIOPIA So Aweil Jur ba Nasser t f ara Raga Meshra’ Bahr ez Z I r Warab Waat o 8˚N n Ayod 8˚N s WARAB t o po o n S Wau N u b i a n Akobo e WESTERN Ak JONGLEI ob BAHR AL GHAZAL Ton o CENTRAL P go l Shambe LAKES a Pon AFRICAN t Rumbek e Pibor a REPUBLIC W u Sue hite Bor Ka Nil ng e en 6˚N SOUTH SUDAN To Djema Tambura Li Yubu WESTERN CENTRAL EASTERN EQUATORIA EQUATORIA EQUATORIA SELECTED CITIES AND TOWNS 5˚N WILAYAH (STATE) CAPITALS Maridi JUBA Kapoeta Yambio NATIONAL CAPITAL Torit t o n g RIVERS I m o M t s . D.R. OF CONGO Kinyeti KENYA MAIN ROADS 4˚N Yei (3187 m) 4˚N RAILROADS IBRD 38572 Nimule To WILAYAH (STATE) BOUNDARIES Isiro UGANDA JULY 2011 INTERNATIONAL BOUNDARIES 28˚E 30˚E 32˚E 34˚E 2 SOUTH SUDAN At a glance: about the multidonor trust funds Sudan’s Comprehensive Peace Agreement called for two multidonor trust funds, one for the national government and one for South Sudan, as part of the wealth-sharing protocol. The Sudan National Multi-Donor Trust Fund (MDTF-N) and the Multi-Donor Trust Fund for Southern Sudan (MDTF-SS) were of cially established following the Oslo donor conference in April 2005.* The funds became effective four months later in August 2005. Our mission The trust funds support the governments of South Sudan and Sudan as they implement various aspects of the 2005 peace agreement and rebuild con ict-affected areas. Investments aim to help the poorest people and bring about lasting peace, while ensuring government ownership, transparency, and accountability in spending. Our approach An Oversight Committee, chaired by each country’s respective government and co-chaired by a major donor, allocates funds. The World Bank, United Nations (UN), and major donors all sit on the committee. Projects funded by the trust funds are co- nanced and implemented by the governments in South Sudan and Sudan, which assign implementation responsibility for some projects to UN agencies and nongovernmental organizations. Our contributors The Netherlands, Norway, the United Kingdom, Canada, Sweden, Spain, Italy, Iceland, and the World Bank contribute to each trust fund. Finland, Germany, Denmark, Egypt, and the European Union contribute only to the MDTF-SS. Greece contributes only to the MDTF-N. Our partners The trust funds work with the Government of South Sudan, in Juba, and the Government of Sudan, in Khartoum. The World Bank’s role The trust funds are administered by the World Bank, which carries the sole duciary responsibility for the trust funds through two technical secretariats, one for the MDTF-SS in Juba and the other for the MDTF-N in Khartoum. *Date rst contributions were received from the U.K. Department for International Development and the Netherlands. 1 Overview: South Sudan and the Trust Fund so far On July 9, 2011, following a peaceful referendum held six months earlier, the Republic of South Sudan became the world’s newest nation amid a groundswell of global support and unbridled national pride. A sea of overjoyed citizens joined an array of international dignitaries at the official Juba ceremony to introduce Africa’s 55th country. The crowd, estimated in the hundreds of thousands, burst into cheers as the speaker of the country’s parliament formally declared South Sudan to be “an independent and sovereign nation.� In his remarks at the celebration, South Sudan President Salva Kiir Mayardit welcomed his country’s opportunity for a new beginning and for building a nation in which all citizens have access to equal opportunities. “We have waited 56 years for this day,� he said, promising that the government would make ensuring service delivery to its people a top priority. No other inter- est, he said, will come before “serving the public interest.� Since 2005, when Sudan was split into two governing bodies following the signing of the Com- prehensive Peace Agreement (CPA), South Sudan’s leaders have struggled to ensure basic levels of service for its citizens. Anticipating South Sudan’s eventual sovereignty, organizations have contributed hundreds of millions of dollars to aid government efforts, including the resources provided by the Multi-Donor Trust Fund for South Sudan (MDTF-SS). Overall, MDTF-SS resources have been modest—less than 20 percent of do- nors’ total collective assistance and less than 7 percent of the income the gov- ernment derived from oil during the interim CPA period. Still, as the largest of the pooled funds operating in South Sudan, the MDTF-SS has always been highly visible, and stakeholders, from the donor community to the highest levels of government, have looked to it to lead the country’s economic devel- opment and deliver results. On the eve of the independence, President Kiir arranged a reception for heads of state, diplomats, United Nations (UN) officials, and other guests, including 4 SOUTH SUDAN the MDTF-SS team. In addition to celebrating South Sudan’s status as a new South Sudan’s road nation, the event provided a fitting occasion to recognize the progress made, to independence while appreciating that major work lies ahead. helped catalyze In fact, the Trust Fund team held its own celebration on July 7, two days global support, but before the independence ceremony, offering staff members an opportunity the new country not only to toast South Sudan but also to reflect on the impact of their work and the need for continuing commitment. According to Laura Kullenberg, still faces immense the Bank’s country manager in South Sudan, many local staff embraced the challenges chance to share with each other their own stories and experiences leading up to independence. “It was very touching to witness and be a part of,� she said. “The CPA was ending, but our role was not. And everyone was very happy about that and very committed to keep pushing forward until the job is complete.� Fulfilling the Trust Fund’s commitment The MDTF-SS, mandated by the CPA and administered by the World Bank, was set up in 2005 to assist postconflict recovery in the southern Sudan states during the six-year interim governing period under the CPA. The Joint Assessment Mission (JAM), organized by the Bank and the UN, measured the country’s immediate needs and served as the basis of a reconstruction framework formulated with national government authorities and donor sup- port. The JAM envisioned two trust funds, one for the northern states and one for the southern states, to deliver peace dividends while building govern- ment capacity for long-term development.1 The CPA marked the end of two decades of civil war and unleashed a sense of real hope among the country’s residents that their quality of life would soon get better. Now in its first year of independence, South Sudan has an un- precedented opportunity to start converting its vast potential into reality—to transform its natural resources (especially oil) into sustained poverty re- duction through improved services and human development, together with livelihood expansion and economic diversification. The potential of a young, energetic population together with abundant nat- ural resources is great, but so are the challenges. The sweeping extent of underdevelopment called for a generous response from the international community and extensive planning and coordination by the Trust Fund to meet expectations. Administrative adjustments, such as detailed operational 5 reviews and intense oversight, helped overcome early challenges and set- backs and put the MDTF-SS on a firm course for successful completion. At the end of 2011, the Fund’s 14 development partners and the Republic of South Sudan had committed $719 million to approved projects (signed grant agreements) for reconstruction and assistance in South Sudan’s 10 states (figure 1). Projects disbursed $85.5 million in 2011, bringing total disburse- ments to $664 million, which represented 88 percent of funds paid-in by donors and 90 percent of funds committed. Cumulative donor-only deposits amounted to $548 million, with $486 million disbursed through the end of the year. South Sudan’s road to independence helped catalyze global support, but the new country still faces immense challenges, and it remains a highly com- plex operating environment in which to carry out project activities. “The Trust Fund definitely built on its recent successes, and our project teams Figure 1. MDTF-SS donor contributions and portfolio highlights Total available donor and Republic of As of December 31, 2011 South Sudan funding through 2011 Denmark 1% amounted to $719 million.a World Bank 1% Germany 2% Othersb 1% • Grant commitments to projects stood Spain 2% at $541 million (donor funds). Finland 4% • Grant commitments in the form of paid-in funds stood at $548 million. Sweden 5% Republic of • Grant disbursements rose to South Sudan 25% $486 million. European Union • Government cumulative payments 8% rose to $178 million. • Net investment income (International Canada 8% Development Assistance fees Netherlands deducted) rose to $38.1 million. United 21% Kingdom • Net commitment authority available 10% totaled $5.3 million. Norway 12% • Cumulative program administration costs totaled $34 million. a. This figure represents a reduction from 2010, attributed to an outstanding $64.7 million commitment from Norway that will not be paid. b. Egypt, Iceland, and Italy. 6 SOUTH SUDAN continued to push forward even when we ran into delays,� said Helen Mbao, Although South a senior operations officer. “Our attention has been tightly focused on staying Sudan is now a on track and, when necessary, making the appropriate adjustments if prob- lems arise so as not to lose momentum.� formally recognized nation, core Working within South Sudan’s challenging environment administrative Starting with little infrastructure and few livelihood options beyond subsis- structures and tence farming, the Government of Southern Sudan (as it was known during mechanisms the interim period) and its development partners began to stabilize and re- of political construct the region immediately after the CPA signing. But the challenge proved daunting. With no paved roads in or around the capital of Juba, and representation inadequate water and electricity resources, basic service delivery was prac- are only beginning tically nonexistent. And with no history of centralized decisionmaking or to emerge national policy formulation, institutions had to be created from the ground up—and capacity was sorely lacking. In addition, hundreds of thousands of displaced people, including former soldiers and those returning from exile, needed to be reintegrated into communities, and they anticipated improved livelihoods and services as part of a peace dividend. Although South Sudan is now a formally recognized nation, core administra- tive structures and mechanisms of political representation are only begin- ning to emerge, and the government is struggling to provide basic services to the population. Geography adds to the difficulties: the country is sparsely populated, with some 8.6 million people scattered among more than 200 eth- nic groups with limited sense of shared nationhood. Even more challenging is South Sudan’s reliance on oil, which is routed through Sudan and lies at the heart of an increasing acrimony between the two countries, threatening long-term stability and endangering the recent development gains. As 2011 ended, South Sudan’s protracted negotiations with Sudan on post- CPA arrangements, such as on borders and oil receipts, were no closer to resolution, adding stress to the economy complicated by renewed hostilities. On January 20, 2012, the government decided to shutter all its oil fields as part of the dispute and adopted austerity measures in response, with siz- able budget cuts to government spending and state transfers—key drivers of development growth. Outside of oil, South Sudan remains an undevel- oped subsistence economy (box 1). Livelihoods are concentrated mostly in low-productivity, unpaid agriculture, and pastoral work, posing further ob- stacles to near-term poverty reduction and economic development. An over- whelming majority of those working—85 percent—are engaged in nonwage activities. 7 Box 1. South Sudan’s uncertain macroeconomic outlook South Sudan’s narrow economic base depends heavily on oil and the public sector. In fact, South Sudan is the world’s most oil-dependent country—oil provides 98 percent of public sector revenue and almost all foreign exchange earnings. Although per capita income was nearly $1,000 in 2010, more than half derived from oil. Meanwhile, 80 percent of South Sudanese households depend on agriculture and livestock grazing as their main source of livelihood. This makes the South Sudanese economy extremely vulnerable to chang- ing oil prices and levels of oil production. High inflation plagued South Sudan’s economy in the months following independence, driven mostly by increases in food prices. Limited local food production and a high reliance on imported foods, combined with the depreciation of the South Sudanese pound and the border closure in the north, also contributed to severe inflationary spikes. But after peaks above 80 percent dur- ing the year, price increases subsided in the latter part of 2011, though that correction came ahead of the government’s decision in early 2012 to halt oil production. Even when its dispute with Sudan is settled, South Sudan’s dependence on oil creates a major challenge of macroeconomic and fiscal management. Oil production from existing wells has peaked and is projected to decline quite sharply over the next 10 years. By 2035, based on current reserve estimates, it is expected to be negligible. In the short term, the unsettled division of oil receipts with Sudan has proved disruptive enough, but in the long term, the pending sharp decline in expected income is likely to heighten South Sudan’s development challenges even further. Despite these obstacles, South Sudan—and the donor community that sup- ports it—has reason to remain hopeful. With vast (and largely untapped) for- est, livestock, and mineral resources, opportunities abound in South Sudan for visible improvements in the quality of life and for eventual economic di- versification. Although the country will continue to face great challenges as it continues to modernize, notable progress through mechanisms such as the MDTF-SS is apparent even in the face of the exacting environment. A renewed focus on implementation and results Since its inception, the MDTF-SS has served as one of the primary support mechanisms for rebuilding South Sudan. All projects supported by the Trust Fund have been aligned with the initial JAM objectives and have followed one or more of the guiding principles to help prioritize development (box 2). The Fund was expected to evolve in full alignment with the overall priorities of the government, and as these priorities have shifted over time, so too has the MDTF-SS, becoming more responsive to changing needs and demands. Initially set to conclude with completion of the CPA, the Trust Fund was ex- tended into 2012 to allow for full project disbursements, help the country 8 SOUTH SUDAN Box 2. The Trust Fund’s overarching principles When planning its operations, the Trust Fund outlined a balanced approach built around three core prin- ciples intended to ensure coordinated, flexible, and timely responses to the Joint Assessment Mission objectives by donors and the South Sudan government. They are: • State building. To be a key instrument for quickly supporting the buildup of government capacity in the identification, implementation, and monitoring and evaluation of its development activities. • Peace building. To be a major instrument for delivering badly needed basic services for the people of postconflict South Sudan. • Partnership deepening. To serve as a key forum for facilitating the continual interaction of the govern- ment and its donor partners on strategic aspects of the government’s development agenda. navigate its founding period, and fulfill donor commitments to the country’s development agenda. At the outset, expectations for the Trust Fund were very high, even though local capacity was low and coordination between stakeholders was not fully realized. This operational disconnect, combined with delays in initial coun- terpart funding requirements on some projects, resulted in setbacks that hindered progress and undermined donor confidence. Throughout these early hurdles, the Trust Fund team remained committed to improving per- formance while continuing to work through government systems to build long-term capacity so that gains made through the MDTF-SS were not lost once it ended. One avenue for accomplishing this has been improved imple- mentation practices and processes. As part of the initial Trust Fund extension, most projects by 2011 were re- structured in alignment with more realistic and achievable program objec- tives set by the government, donors, and the Oversight Committee. As part of that process, a results framework, consistent across projects and better aligned with JAM objectives, was put in place at the end of 2011 to enhance monitoring and evaluation. Training seminars were held to better equip project task teams and government officials to manage for results. An inde- pendent procurement review was carried out in 2011 as part of an extensive stock-taking exercise that identified the effective techniques that helped un- derstand challenges and improve procurement performance. Continuing to strengthen the vital areas of implementation not only helped intensify project results, but it also solidified the outcomes. For the South Sudanese, the capacity gained in implementing projects, building donor 9 relationships, and working with nongovernmental organizations (NGOs) has been critical for building institutions and fostering civil society in a new country. However, while UN agencies and NGOs have played a prominent role as MDTF-SS implementing partners, the clear majority of project op- erations have been delivered using government services—an implementation modality that has become more common over time (figure 2). “In 2011, we made a direct effort to intensify the attention given to the entire implementation process,� Kullenberg said. “We also aimed for more intense communication and outreach with the donors and our implementing part- ners. Even more energy was devoted to stronger results reporting.� Some of these steps are highlighted in more detail in section 3, while the following section reviews the Fund’s project and sector achievements through 2011. Figure 2. Implementation agencies under the Trust Fund Percentage of projects implemented Nongovernmental organizations 15% Republic of South Sudan 61% United Nations 24% 10 2 Performance achievements: Delivering results to meet Joint Assessment Mission objectives Without a doubt, much work remains in South Sudan. As long as economic uncertainty and regional conflict pose threats to long-term stability, substantial development accomplishments will be at constant risk. But as it enters its final phase, the Multi-Donor Trust Fund for South Sudan (MDTF- SS), in partnership with South Sudan’s government and its donors, can point to an expanding portfolio of accomplishments and a growing list of performance achievements. The MDTF-SS consists of 18 overarching projects approved by the Oversight Committee, 12 of which remained active as of December 31, 2011. Four proj- ects closed in 2011, while others such as health and fiduciary remain ongoing through new phases following the completion of earlier project components. 2 At year’s end, with the closing date fast approaching, project teams faced numerous uncertainties, including South Sudan’s fragile political, security, and economic environment, as well as concerns over project sustainability and time constraints. Despite many challenges, all active projects as measured by the MDTF-SS monitoring agent at the end of 2011 received above average ratings. 3 Those projects and their performance ratings are: 4 • Rapid Impact Emergency—moderately satisfactory. • South Sudan Emergency Transport and Infrastructure Development— moderately satisfactory. • Core Fiduciary Systems Support—satisfactory. • Education Rehabilitation—moderately satisfactory. • Private Sector Development—moderately satisfactory. • Support to Agriculture and Forestry Development—satisfactory. • Gender Support and Development—satisfactory. • HIV/AIDS—moderately satisfactory. • Umbrella Program for Health System Development—moderately satisfactory. • Road Maintenance—moderately satisfactory. • Water Supply and Sanitation—moderately satisfactory. 11 Collectively, these projects have cut across the eight Joint Assessment Mis- sion sectors outlined in 2005 to deliver measurable results against initial ob- jectives, including: improved access to previously inaccessible areas through the construction and rehabilitation of roads, bridges, and railways; construc- tion of the first offices for the autonomous government of South Sudan; sup- port to police and prisons systems; personnel training and capacity devel- opment; and a general increase in quality of life across local communities through improved water supply, schools, and health infrastructure. Increasing disbursements, improving performance By learning from past experience and applying lessons to ongoing work, dis- bursements have surged over the past two years, with more than 55 percent of total disbursements coming since the start of 2010 (figure 3). In 2011, the Trust Fund disbursed more than $85 million in total funds, an average of just more than $7 million a month. The first three years of the program yielded slower-than-expected results, due mostly to low capacity within the fledgling South Sudan government and its ministries, unrealistic expectations for implementation timeframes, and Figure 3. Milestones in Trust Fund disbursements, 2006–11 As of December 31, 2011 ($ millions) 750 684 608 663 554 Signed contracts 579 500 426 479 485 Total disbursements 400 379 Donor disbursements 233 300 250 200 185 179 179 179 179 100 Republic of South Sudan 85 disbursements 0 October December May December December 2007 2009 2010 2010 2011 12 SOUTH SUDAN the limited presence of sector specialists within the Trust Fund’s adminis- Operational gains trative structure—specialists very much needed to support project implemen- were made in tation given the government’s technical needs. 2011 through Over time, however, enhanced supervision by World Bank management, stronger monitoring maturation of the projects, and greater capacity within the government con- and evaluation tributed to increased disbursement rates and better performance. In spring 2011, after the self-determination vote, a World Bank mission team visited and financial South Sudan to review Trust Fund activities and, in close consultation with management, leading the MDTF-SS team in Juba, drew on previous experiences to ensure that to faster project development and reconstruction assistance was achieving intended impacts. approvals, more In the run up to independence, South Sudan’s leadership faced a staggering pre- state and nonstate paratory agenda, including negotiating the complex issues of separation, setting actor involvement, up the basic apparatus of an independent state, managing internal conflict, and preparing development plans for the upcoming, postindependence years. These and steady factors added to South Sudan’s institutional vulnerability during its most impor- disbursement rates tant transition period, so ensuring that the Trust Fund’s operations were turned around was of paramount importance to all stakeholders. As the MDTF-SS ad- ministrator, the World Bank played a vital role in spurring the turnaround by fostering a renewed sense of collaborative engagement. The spring mission, for instance, helped initiate dialogue on establishing a more effective and harmo- nized aid architecture for South Sudan and commenced joint consultations with the government, nongovernmental organizations, and civil society on the scope and strategic directions of the country’s postindependence assistance agenda. Deepening partnerships is critical for South Sudan’s long-term development outlook. And the successful turnaround of the Trust Fund, both in disburse- ments and administrative oversight, provides an encouraging foundation for ongoing engagement. MDTF-SS management took action in direct response to earlier setbacks by managing expectations more reasonably, gauging capac- ity more accurately, and coordinating efforts more consistently. As a result, even more operational gains were made in 2011 through stronger monitoring and evaluation and financial management, leading to faster project approvals, more state and nonstate actor involvement, and steady disbursement rates. The Trust Fund’s focus on results Through 2011, the MDTF-SS has achieved substantive results, and with the South Sudan government and donor resources, it has helped set the country 13 A strong foundation on an upward development path. The most notable performance achieve- ments are below. for a culture of responsibility, Institutional capacity is being built. A strong foundation for a culture of accountability, and responsibility, accountability, and sound practices within public institutions is being built by improving the management and flow of information, estab- sound practices lishing fiduciary capabilities, conducting ongoing audits of financial state- within public ments, and training key personnel. More than 1,200 public servants (27 per- institutions is being cent of whom are women) have been trained at the national and state levels, helping establish core capacities in public administration and basic project built by improving management. Some trainees have helped establish and staff new ministries, the management and including the Ministry of Transport and Roads and the Ministry of Housing flow of information, and Physical Planning, both now operational. Also, an audit of government finances for 2005–08 has been completed, with audits of 2009 and 2010 to establishing fiduciary follow. capabilities, conducting ongoing Transparency and outreach are being promoted. A pilot Public Infor- mation Center was established in Juba to provide citizens with access to the audits of financial Internet and government documents and to develop a forum for regular in- statements, and teraction between government officials and their constituencies. The govern- ment launched a website featuring leadership profiles, legislation updates, training key personnel policies and strategic plans, employment opportunities, and national govern- ment budget details. Previously, no facility providing one-stop access to pub- lic information existed. Investment in social development is growing. With Trust Fund assis- tance, South Sudan completed a nationwide census that was the basis for national elections in 2010 and the January 2011 referendum on self-deter- mination. Local commerce and markets were strengthened through a uni- fied currency, which replaced six different currencies in circulation prior to the CPA. Capital investment in police and prison infrastructure, equip- ment, and training has led to better citizen security. More than 100 local nongovernmental and community-based organizations have partnered with the MDTF-SS to offer financial support and social development programs to improve women’s economic security and cultural equality. Employment services are expanding. Faced with a largely unskilled population and a desire to enhance its indigenous workforce, the govern- ment has used Trust Fund resources and expertise to begin creating a na- tional labor network, starting with the full rehabilitation of three labor of- fices. Elsewhere, offices in seven states have been equipped with supplies, and their personnel have been trained in labor administration and employee 14 SOUTH SUDAN services. A national labor bill was drafted, and a vocational training policy Through 2011, developed as a framework document. About $2.3 million has been invested program grants have in equipping vocational training centers in Juba, Malakal, and Wau. At its peak, the Trust Fund’s vocational training program exceeded its initial tar- benefited almost get of 100,000 trainees a year. 81,000 farmers, with an additional Private sector development is being encouraged. Over the last few years, the Trust Fund has worked closely with the government to foster a more con- 280,000 benefiting ducive investment environment among the South Sudanese, and to gener- indirectly—largely ate broader interest in individual entrepreneurship. For example, MDTF-SS as members of resources backed a nationwide business plan competition in which 42 win- ners, mostly women, each received a $20,000 loan to finance their planned participating ventures. Generating knowledge has also been a key component of MDTF-SS households work, including a mining sector assessment and industrial competitiveness strategy. To strengthen the link between South Sudan’s production sectors and local markets, the Trust Fund team worked with government leaders on developing a new labor policy and creating four microfinance institutions that disburse microcredits to the private sector. Overall, through the micro- finance system, MDTF-SS resources have opened small-enterprise access to more than 44,000 men and women. Farming households are making gains. Outside the oil industry, agricul- ture is South Sudan’s major source of economic growth and diversification, so Trust Fund assistance has focused largely on agricultural development rather than subsistence as a way to improve long-term food security. New sector policies have been developed, while hundreds of agriculture-related workers have been trained in productive farming and forestry techniques. Through 2011, program grants have benefited almost 81,000 farmers, with an additional 280,000 benefiting indirectly—largely as members of partici- pating households. The grants, together with the project-financed advisory services, have significantly improved productivity. Average yields of major food crops per acre have surged: approximately 130 percent for sorghum, 40 percent for maize, and 20 percent for groundnuts. And basic infrastructure is being aggressively developed: offices for national and state agricultural min- istries, three new border posts, four new seed stores, and living facilities for the Kegulo forestry training center ministries have been built and equipped. Rural livelihoods are being enhanced. Through projects targeting the many rural South Sudanese who make a living through livestock and fisher- ies, the Trust Fund has helped the government broaden services and build supervisory capacities. A community-based animal health system (in which trained workers handle livestock vaccinations and disease treatment at the 15 Nearly 3,700 village and cattle camp levels) is now operational and benefiting more than 24,000 households. More than 1,000 workers have been trained, equipped, kilometers of all- and deployed to help with early disease detection and surveillance, a vital weather roads have routine made more efficient and accessible through 12 mobile veterinary been rehabilitated clinics capable of supplying diagnoses and treatment. Meanwhile, fishing shops replete with gear and cold-storage facilities have been set up through and reconstructed, cooperative arrangements to help fishermen better manage losses and ac- while detailed design cess markets. and feasibility Transport infrastructure is being strengthened. Inclement weather, studies have been isolation, and insecurity remain ongoing challenges to building a reliable completed for 560 transportation network in South Sudan, but Trust Fund activities have man- kilometers of roadway aged to ease the movement of people and goods. Nearly 3,700 kilometers of all-weather roads have been rehabilitated and reconstructed, while detailed along two major design and feasibility studies have been completed for 560 kilometers of road- transport routes way along two major transport routes (Nadapal–Juba and Kaya–Juba). Road projects have helped reopen remote areas of South Sudan—including the far southern “greenbelt� regions of the Equatoria states—and in some cases re- duced travel times up to 75 percent. Additional completed works include the location and removal of mines on priority road sections, a roads condition survey covering 4,000 kilometers, a feeder roads development plan, the de- sign of 1,500 kilometers of rural roads, and renovations of rail lines, river ports, and airstrips. At the national level, a transport sector policy has been developed to guide ongoing planning. Urban infrastructure is being restored. In Juba, 250,000 residents now have access to clean and safe water following the rehabilitation of the city’s water treatment plant, while equipment upgrades have bolstered waste col- lection and sanitation services. All 47 buildings at the Juba Teaching Hospi- tal, the country’s largest medical facility, have been renovated, and they can now serve roughly 100,000 patients a year. Government buildings housing the parliament and the ministries have been rehabilitated, with others lined up (including buildings for the audit chamber, anticorruption commission, and gender ministry). Long-term considerations for smart urban develop- ment have also been taken into account. The health ministry’s medical waste management plan is under discussion, and a preparatory study to improve living conditions in the state capitals has been completed. Clean water is more widely available. In addition to improving the water supply in large population centers like Juba, Trust Fund projects have made a difference among South Sudan’s vast rural population as well. More than 1,100 boreholes have been drilled or rehabilitated, and 20 water distribution 16 SOUTH SUDAN systems have been constructed (and another 14 rehabilitated) across all 10 Most Trust Fund states, providing hundreds of distribution access points. Altogether, more activities have than 562,000 people in almost 100,000 rural South Sudan households now have access to clean and safe water. sought to bolster the economic and social Health services are benefiting more people. The MDTF-SS has helped standing of women South Sudan’s health ministry develop a monitoring and evaluation strat- egy, train data collectors and analysts, and finance the first-ever mapping in South Sudan of health facilities. Altogether, these “back-end� investments have allowed while supporting the government officials access to harmonized data collection tools and critical gender ministry’s health indicators locally. As a result, medical supplies and health facilities are benefiting more residents in need—more than $30 million of pharma- development of ceutical supplies has been distributed to more than 1,200 health facilities new policies and in all 10 states, with essential drugs available in more than 70 percent of strategies supervised health facilities. More than 250,000 malaria kits, 1 million mos- quito nets, and 10 million water purification tablets have been distributed. In addition, almost 60,000 people have been counseled and tested for HIV, and more than 1 million condoms distributed. By the end of 2011, five line min- istries—health, education, internal affairs, defense, and youth—had begun implementing sectoral action plans to combat HIV/AIDS. Educational opportunities are more accessible. The Trust Fund has been instrumental in building schools, boosting enrollment, training teach- ers, and helping supply such basic necessities as books and other learning materials. Over the past decade, access to formal schooling has soared, with primary and secondary school enrollment doubling one or more times over. The country’s Alternative Education System, which offers learning opportu- nities to nontraditional students, boasts more than 2,000 students. The Trust Fund has been the primary instrument for helping South Sudan meet this demand and lay the foundation for effective educational development. Fifty schools have been constructed or rehabilitated, and 11 county education cen- ters have been established, with 3 more to be completed. More than 1,200 new teachers and more than 300 education managers have been trained, while millions of textbooks and teaching guides have been distributed. In addition, the government’s ability to oversee the education sector’s growth through smart policy and management has improved dramatically with MDTF-SS capacity-building efforts. Gender issues are being addressed. Most Trust Fund activities have sought to bolster the economic and social standing of women in South Sudan while supporting the gender ministry’s development of new policies and strategies. About 5,000 women have received agricultural production training, while 17 another 1,400 have received income-generation training in areas other than farming. Female ex-combatants have also benefited from the Trust Fund’s disarmament and reintegration program—more than 40 percent of project beneficiaries have been women. At the administrative level, more attention has been given to the importance of monitoring results and evaluating out- d ifferentiated data. comes using gender-sensitive indicators and gender-­ Project closures through 2011 Four Trust Fund projects wrapped up operations in 2011: Capacity Build- ing, Institutional, and Human Resource Development (closed May 31); Live- stock and Fisheries Development (June 30); Rural Water Supply and Sanita- tion (June 30); and Police and Prisons Support (December 31), which was implemented by the United Nations Development Programme (UNDP) and for which the World Bank, as the MDTF-SS administrator, served as a fiscal agent only. These four projects joined two previously closed projects in the MDTF-SS portfolio: the Sudan New Unified National Currency Project (closed March 31, 2008) and the Fifth Population Census (June 30, 2009; box 3). Some closed projects faced notable implementation challenges, but all made significant contributions to South Sudan’s recovery effort. Box 3. Currency and census project successes The two projects that wrapped up before 2011, the currency and census projects, both played an impor- tant role in supporting South Sudan’s post–Comprehensive Peace Agreement (CPA) peace-building efforts and in fostering a sense of national unity within the emerging country. The currency project supported the production of 1.34 billion banknotes and 243.7 million coins of various denominations to replace the numerous currencies circulated in South Sudan. By December 2007, the Cen- tral Bank of Sudan had completed the transition to the new currency for all transactions. The census project supported the first all-inclusive census for South Sudan since 1956. A key provision of the CPA, the census helped provide a reliable and accurate demographic and socioeconomic evidence base, which was used as a benchmark for subsequent development planning by the government and donor community. 18 SOUTH SUDAN Capacity building and institutional development Through the capacity-building South Sudan’s CPA-period transitional government was established in Juba in December 2010, followed by 10 state governments and approximately 100 and institutional county governments. This structure replaced the Coordinating Council of development project, Southern Sudan, the associated “state� governments that were concentrated the Trust Fund in the garrison towns during the war years, and the skeletal civilian ad- ministration of the Sudan People’s Liberation Movement in other parts of aimed to help the the southern region. For the most part, the Government of Southern Sudan new government (as it was then known) was started from scratch. But building institutional get off the ground capacity was even more urgent for this new autonomous government than it has been for most other low-capacity, postconflict situations—because the na- tional government had significant revenue while the state governments had considerable authority to meet the public’s optimistic expectations. Through the capacity-building and institutional development project, the Trust Fund aimed to help the new government get off the ground. The project helped fill some of the key foundational requirements for good governance through its key objectives, including: framework regulations, policy and strategy development, public service skills development through vocational training and workshops, and the enhanced use of information technology for better government communications, transparency, and citizen relations. Project activities ranged across five ministries, and initial fears that implementation would suffer because of this delineated approach proved un- founded as the ministerial teams (with more than 30 officials) worked well together. The project became effective in February 2007, but like so many other MDTF-SS projects, it started slow and encountered early delays due mainly to an implementation structure designed to enhance ownership that, while admirable in intent, misjudged the abilities of the nascent government structures. The project was restructured in 2009 to reprioritize work. While the project made notable strides in training public servants, expand- ing email use and accessibility, and promoting standardized procedures and transparency, it closed with a moderately unsatisfactory rating. The original development objectives were only partly reached, and a number of under- lying issues and risks were noted in the final Implementation Completion Report: The civil service continues to be overstaffed with too many unskilled workers. Weak coordination and unclear functional responsibilities are still prevalent. Citizen participation in governance remains weak. And key poli- cies and guidelines were not approved at the time of closure (such as the Public Service Act, the Labour Act, and a national vocational training poli- cy). These risks, though anticipated, proved difficult to mitigate. But hopes 19 The livestock and remain high that going forward South Sudan will consolidate the early gains and create an enabling environment for citizen-focused public investment fisheries project and equitable growth. The project disbursed $13.7 million. proved instrumental in allowing states to Livestock and fisheries take charge of animal During the civil war, raising livestock and operating fisheries were two im- health services, portant ways for South Sudan’s oppressed population to support its liveli- and it restored the hood. Even now, after independence, these sectors are among the most likely to make a rapid impact on economic recovery, asset formation, and wealth community-based creation. Conceived as a five-year plan to be implemented in two phases, this animal healthcare project set out to strengthen the livestock and fisheries sectors in five states delivery system through building capacity, improving animal health, reducing postharvest fish losses, and enhancing market infrastructure. The project became effec- that was practiced tive in April 2007 after a six-month delay caused mainly by the government’s before the CPA weak institutional capacity and inadequate project preparation. The project was revised in November 2010—and its second phase eliminated—due to a shortage of project funds that reduced its range of activities. The project failed to meet its initial objectives since the bulk of the devel- opment program was not implemented. While restructuring helped correct earlier missteps, it came too late according to the Implementation Comple- tion Report, as most project funds had already been disbursed. As a result, the project’s final rating was moderately unsatisfactory. generation results (such as Still, assisted by strong training and knowledge-­ baseline surveys and value chain studies), the project largely met restruc- tured objectives. Its most acclaimed impacts were improving institutional capacity within the national ministry and the targeted states, as well as enhancing animal disease detection, surveillance, and treatment. These outcomes were an integral part of initial project objectives, and staff em- phasized the project’s impact on the well-being of producers. Ultimately, the project proved instrumental in allowing states to take charge of animal health services, and it restored the community-based animal healthcare de- livery system that was practiced before the CPA, but in a stronger fashion. The project disbursed $13.5 million. Rural water and sanitation This project, which became effective in February 2007, helped provide assis- tance for clean water supply, sanitation services, hygiene promotion and edu- cation, and capacity building at the state and community levels. The objective 20 SOUTH SUDAN was to increase access to safe water and sanitation facilities throughout all Even among many South Sudan and to lay a foundation for sustainable management, regula- of the projects tion, and expansion of rural water services. The project enabled hundreds of boreholes to be drilled or rehabilitated and new distribution systems to rated moderately be built, while supporting the training of water committees to operate and satisfactory (the maintain the boreholes over time as best they can (availability of replacement second strongest parts remains a key maintenance challenge, for instance). More than 600,000 residents are estimated to have benefited from project work. The project dis- rating possible) rather bursed $30 million with a cumulative expenditure of $26.2 million; the un- than satisfactory spent difference related mainly to government counterpart funds. by the monitoring Police and prisons agent, challenges and shortcomings As with most public services in the country, South Sudan’s official security were offset by apparatus needed to be built from the ground up. Through this project, Trust Fund resources complemented government efforts to upgrade the profes- positive gains sional skills and facilities of South Sudan’s fledgling police service and na- tional prison network. Training workshops and seminars on community po- licing and gender-based violence were held, and a 2011–14 strategic plan for police services in all but one state was successfully drafted. By the time the project closed, five prisons in Wau, Bor, Yambio, Rumbek, and Juba had been constructed (with a sixth in Malakal mostly finished), and 12 police stations had been built or rehabilitated. The project disbursed $20 million to UNDP.5 Portfolio challenges to Joint Assessment Mission objectives As noted, all projects active at the end of 2011 received acceptable perfor- mance ratings and remain in good standing as the Trust Fund begins to wind down. Even among many of the projects rated moderately satisfactory (the second strongest rating possible) rather than satisfactory by the moni- toring agent, challenges and shortcomings were offset by positive gains. The emergency transport and infrastructure project, for example, was cited for reaching “significant milestones toward achievements of set targets,� while the private sector development project was lauded for having “achieved all the program development objective level results� and enabling “the exis- tence of favorable environment for the registration of businesses.� However, most ongoing activities still faced challenges on realizing the Joint Assessment Mission (JAM) objectives. Although notably improved, weak 21 Perhaps the single procurement and slow expenditure rates continue to trouble many projects, while, as the completed capacity-building project demonstrated, administra- most pervasive tive and technical skills for officials and citizens have improved but not close challenge to ongoing to where they need to be. projects was time. Overall, four key issues can be cited as the most critical portfolio challenges With the Trust Fund in 2011 and as primary risks to meeting the JAM objectives. Some are within set to close in MDTF-SS control and some are not, though all are cautionary factors as the June 2012, some Trust Fund winds down. projects, due to their • Regional instability. Insecurity from rampant clashes among communi- nature and scope, ties has hampered implementation in some areas. The state most affected faced failing to has been Jonglei, where deadly intertribal clashes over cattle have lim- ited project site accessibility, causing delays or, in some instances, can- complete activities celing various activities. Water projects and medical supply distribution by the end date have also been adversely affected by the insecurity. In addition, the mac- ro-level political and economic instability brought on by deteriorating re- lations with Sudan had begun to consume time and resources by the end of 2011. The hostilities that erupted between the two countries had not moved into South Sudan, but the threat of disruption in the final months of MDTF-SS activities remained very real. • Time constraints. Perhaps the single most pervasive challenge to ongoing projects was time. With the Trust Fund set to close in June 2012, some projects, due to their nature and scope, faced failing to complete activities by the end date. According to various project teams, the pending dead- line added enormous pressure to project staff trying to ensure completion while simultaneously coping with intractable operational limits, such as seasonal variations, rising labor and material costs, and bureaucratic processes. Some major construction activities—including buildings for the audit chamber, anticorruption commission, and gender ministry— were expected to extend beyond June 30, 2012, due to delays that pushed back start dates. It became clear to all stakeholders that a final extension would be necessary to ensure satisfactory completion. (Extending the Trust Fund is covered in more detail in section 5.) • Low expenditure levels. While the restructuring that many projects un- derwent in late 2010 and early 2011 helped set more attainable goals, slow expenditures remained an ongoing challenge. As of December 31, 2011, some projects had large unexpended funds, led by the Water Supply and Sanitation project ($24.4 million, or 81 percent of project funds). Other projects, including gender, rapid impact, and agriculture and forestry, 22 SOUTH SUDAN faced a strong likelihood of not spending disbursed funds by the June 2012 closing date. In all, seven active projects still had 20 percent or more of their funds to spend. • Skills and sustainability concerns. As the Trust Fund winds down, many projects do not have the mechanisms needed to sustain MDTF-SS results, such as deliberate measures to fully integrate all project activities within the various ministry strategies. While the Fund was conceived to deliver immediate assistance to South Sudan’s peace-building and state-building efforts, it was also intended to lay a good foundation for future develop- ment. Skills and knowledge transfer is one valuable mechanism to meet that goal, but South Sudan’s weak institutional capacity is still an issue. While the presence of specialists has greatly assisted project implementa- tion, the monitoring agent noted as a key challenge the “limited transfer of knowledge and skills to counterpart staff,� which was attributed to the counterpart staff’s “limited capacity and commitment.� Except for regional instability and seasonal variations, which are outside the control of Trust Fund staff, it’s important to emphasize that many key challenges are, to some extent, an inevitable byproduct of the Fund’s early struggles that have been addressed recently, including 2011’s notable gains in strengthening procurement, building capacity, and enhancing the moni- toring and evaluation process. These advances are at the crux of the Fund’s 2011 commitment to intensifying its turnaround, and despite the ongoing challenges, they have helped better position the Fund to reach the origi- nal JAM objectives and sustain the turnaround that began a few years ago. Table 1 below examines the MDTF-SS results by JAM objectives, reflecting the new framework. 23 Table 1. MDTF-SS results by Joint Assessment Mission sector As of March 2012 1. Institutional development and capacity building MDTF-SS goals Key milestones reached and outputs achieved To establish a foundation • Human resource regulations adopted by all South for effective, efficient, and Sudan ministries and all 10 state governments transparent functioning of the • Strategic plan and long-term strategy available for Republic of South Sudan future growth and development of public service To put in place critical • 1,220 public service personnel provided government infrastructure at adequate training in respective fields the national and state levels • 4,288 documents (as of May 2011) uploaded into new database created to track and generate documentation for all Cabinet committee meetings • 18 ministry buildings rehabilitated and equipped, including presidential and vice presidential facilities • Numerous government administrative buildings rehabilitated To increase access to labor • Training-needs assessment conducted markets, welfare assistance, and • Employment services and labor offices functional in three states vocational training services • Labor office staff trained in regulation, labor market welfare, and job placement administration To establish minimal fiduciary • Four annual government audits completed, with two more planned systems to provide reasonable • Continued progress toward oversight of public procurement assurance to stakeholders by the finance ministry with other ministries, departments, on the use of funds and agencies accountable for their procurement • Up-to-date procurement plans for ministries, departments, and agencies put in place and being implemented 2. Rule of law and governance MDTF-SS goals Key milestones reached and outputs achieved To substantially increase the • 12 police stations rehabilitated or constructed, capacity of the police and prison furnished, and equipped system across South Sudan to • Five central prisons rehabilitated or deliver professional services constructed, furnished, and equipped • Four state training centers constructed, refurbished, and equipped • Field training manual developed and training sessions completed • Juba Central Prison facilities adapted to meet special needs of incarcerated women with children 24 SOUTH SUDAN Table 1. MDTF-SS results by Joint Assessment Mission sector (continued) 3. Economic policy and management MDTF-SS goals Key milestones reached and outputs achieved To support the Central • 900 million banknotes in six denominations Bank of Sudan’s effort to exchanged for old currencies effectively, efficiently, and • 761 million coins distributed transparently introduce a new national unifying currency 4. Productive sectors (rural and private sector development) MDTF-SS goals Key milestones reached and outputs achieved To revitalize and improve the • 360 staff members of the Ministry of Animal Resources and capacity of relevant public Fisheries and the State Directorate of Animal Resources and sector institutions in order to Fisheries trained and competent in technical and managerial skills guide and support the livestock • Assessment of premises for construction and rehabilitation and fisheries sectors of offices in five states and 28 counties completed by the Ministry of Animal Resources and Fisheries • United Nations Office of Project Services contracted to construct state offices in Juba, Torit, Malakal, Bor, and Bentiu To create an appropriate policy • Drafts under review for legislative action, including Meat environment for the improved Control and Slaughter Facilities Bill, Fertilizers and Animal functioning of the livestock Food Stuff of Animal Origin Bill, Hides and Skins and Leather and fisheries sectors Processing Bill, and Range Management and Grass Fires Bill To improve availability and access • 12 mobile veterinary clinics procured and distributed to animal health services • 580,226 animals vaccinated and 329,589 animals treated for various diseases To establish an enabling • Microfinance policy presented to the South Sudan Central Bank environment for private • Public-private dialogue forum established and functional sector development and to support sector growth • South Sudan Microfinance Development Facility established and functional • Three new microfinance institutions operational • 26,596 people with access to finance through targeted microfinance institutions • Number of steps to register a business streamlined from 10 to 4 • 14,298 businesses registered • 45 startups established through business plan competition • Five laws to improve the enabling environment for business presented to government officials To increase the productivity • Farmers in five states, 27 counties, and 127 and production of participating payams adopting new technologiesa small farming households in • 22,592 feddans cultivated (either with crops agriculture and forestry or trees) by participating farmersb • Yields of staple crops by participating farmers per acre increased from 200 kilograms to 463 for sorghum, from 250 kilograms to 346 for maize, and from 350 kilograms to 422 for groundnuts (continued) 25 Table 1. MDTF-SS results by Joint Assessment Mission sector (continued) 5. Basic social services MDTF-SS goals Key milestones reached and outputs achieved To improve access to enhanced • 1.38 million children enrolled in primary education quality of education and alternate • 200,000 participants enrolled in alternate learning programs learning opportunities • 850,000 students benefited from improved learning materials • 214 additional classrooms built or rehabilitated at the primary level • 2.2 million textbooks purchased and distributed • 751 qualified primary teachers added to workforce • 30 training rooms and dorms in multipurpose education centers built or rehabilitated To improve the delivery of basic • 67,069 children immunized health services in four states • 14 percent of childbirths taking place in health facilities To strengthen the stewardship • 60 percent of health facilities having at functions of the national least 10 essential drugs in stock health ministry • 54 percent of health facilities now submitting new monthly reports to the Health Management and Information System • 31,467 long-lasting, insecticide-treated malaria nets purchased and/or distributed • 24 months of supplies available in health service institutions • 0.4 outpatient visits per capita a year • Juba hospital rehabilitated and fully functional To increase access to safe • 528 targeted community water points constructed with an water and sanitation facilities established water committee and management plan • 2,527 improved community water points rehabilitated or constructed • 677,500 people with access to improved water sources • 1,011 additional households with improved sanitation facilities • Five water-quality laboratories established and adequately equipped in state capitals • 109 public latrines constructed • 250,000 residents in Juba with access to clean drinking water To increase access to • 10 states with functional AIDS commissions comprehensive HIV/AIDS services • Six HIV/AIDS ministry action plans implemented • HIV/AIDS monitoring and evaluation system put in place to collect strategic information at all levels • 662 pregnant women living with HIV given antiretroviral treatment to reduce the risk of mother-to-child transmission • 3,492 adults and children with HIV receiving antiretroviral combination therapy • 59,424 persons counseled, tested, and made aware of their HIV status • 182 service sites established 26 SOUTH SUDAN Table 1. MDTF-SS results by Joint Assessment Mission sector (continued) 6. Infrastructure MDTF-SS goals Key milestones reached and outputs achieved To improve access and quality of • 420 roads rehabilitated targeted roads in South Sudan • Rehabilitated roads and transport infrastructure network increased to 2,523 kilometers • Rural roads development plan prepared, including design for 1,500 kilometers of new rural roads and feasibility and detailed design for 560 kilometers of trunk roads • 55 technicians trained in carrying out road maintenance, construction supervision, and material testing • Environmental and Social Monitoring Unit established, equipped, and functional with minimal staff • Southern Sudan Roads Authority Act 2011 enacted, and South Sudan Roads Authority established as an autonomous body 7. Livelihoods and social protection MDTF-SS goals Key milestones reached and outputs achieved To improve access to existing • Gender assessment report to inform gender strategies submitted economic opportunities for women • New building for the Ministry of Gender, Social Welfare, To support the Ministry of and Religious Affairs being constructed Gender, Social Welfare, and • 5,000 women trained on agricultural production activities Religious Affairs in developing gender policies and strategies • 1,400 women trained on nonfarm income-generating activities 8. Information and monitoring MDTF-SS goals Key milestones reached and outputs achieved To make available reliable • Census pilot conducted in November 2006 and census and accurate demographic, completed in all areas of Sudan by December 2007 economic, and social data • Census results analyzed, evaluated, and released in 2009 a. Payams are small districts inside counties, which are comprised of multiple payams. b. Feddans are units of areas equal to approximately 1.038 acres or 0.42 hectares. Note: Some figures may reflect data gathered through the first quarter of 2012, when the revised results framework on which this table is based had been more extensively incorporated into results reporting. 27 3 Intensifying implementation: Robust processes to sustain the turnaround During the Trust Fund’s first few years, the many complexities from operating in South Sudan’s difficult environment, including the magnitude of needed assistance and the lack of functional infrastructure, led to unanticipated delays and a languid start. By 2009, however, the Multi-Donor Trust Fund for South Sudan (MDTF-SS) had begun to turn the corner, and Trust Fund leaders have since worked diligently to increase disbursements rates, promote better donor coordination, oversee efficient aid management, reduce transaction costs, and intensify the program’s focus on implementation and, by extension, results achieved. The Trust Fund’s place in South Sudan’s aid architecture emanated from the Comprehensive Peace Agreement’s (CPA) political process, which created an unrealistic vision of government capacity and led to broad mandates under a fixed timetable. At the outset, pledging events and aspirational statements heightened expectations. The MDTF-SS was loaded with mandates to provide a sweeping suite of immediate relief and reconstruction assistance: quick deliv- ery of goods and services, quick-start sector programs, capacity building for aid management and public financial management, support for institutional devel- opment, and the creation of efficient pass-throughs for implementing agencies, such as nongovernmental organizations (NGOs) and the United Nations. Once the high expectations raised by the CPA, the donor community, and the coun- try’s citizenry ran into operational roadblocks, disappointment was inevitable. For Trust Fund performance, one of the biggest initial problems stemmed from the ambitious implementation timetable and complex project designs. Once implementation began, the MDTF-SS project cycles and capabilities were misaligned with the sociopolitical and economic realities of life in South Sudan. This problem contributed to the lack of harmonization and coordina- tion among the MDTF-SS, its donors, and the government, and it was exacer- bated by a deficient grasp of South Sudan’s political economy. The Trust Fund recognized the problems and took action. By 2011, it was in its strongest posi- tion yet to deliver sound results and meet development objectives. 28 SOUTH SUDAN Reversing early setbacks The administrative improvements of After a detailed review process to reconcile expectations with what was actu- ally possible, the MDTF-SS made numerous adjustments to address gaps and 2009 and 2010 did shortcomings in project planning and preparation, improve communication more than boost among stakeholders, and better navigate South Sudan’s fledgling state struc- disbursements tures. The Trust Fund’s operational turnaround began in earnest in 2009 but really picked up in 2010, with bottlenecks easing and disbursements surging and steady project to $188 million for the year—almost the total amount of disbursements for progress—they also the previous four years combined. Such an escalation was especially affirm- laid the groundwork ing for the MDTF-SS, because it helped reverse the delays that marred early activities. for a more intensive focus on results The administrative improvements of 2009 and 2010 did more than boost dis- and outcomes bursements and steady project progress—they also laid the groundwork for a more intensive focus on results and outcomes. With the positive performance in 2010, and with basic MDTF-SS operations on more solid footing, the Trust Fund began 2011 with a strategic emphasis on intensifying implementation of the portfolio to ensure that activities were completed in a timely, efficient manner and achieved results. When planning for the remaining period of MDTF-SS operations, the team identified key objectives for 2011 (and, indica- tively, for 2012) in support of this goal: • To sustain steady disbursements. With a stronger group of project per- sonnel in place, the significant expansion of signed contracts, and better trained and equipped project counterparts, the MDTF-SS aimed to build on the disbursement surge in 2010. • To deepen partnerships. The MDTF-SS aimed to continue improving its relationship with the government, donors, and NGOs. With this in mind, officials commissioned a study on working with NGOs to be finalized in 2012, which will extract lessons learned during implementation. • To consolidate communications. The MDTF-SS aimed to carry out activi- ties highlighted in the previously prepared communications strategy to keep stakeholders better informed of the implementation process and ap- prised of the program’s evolving impact. • To strengthen implementation oversight. The MDTF-SS aimed to ensure that project teams and the monitoring agent had the right tools to closely monitor implementation on a sustained basis in order to align project ac- tivities and performance measures with their respective closing dates. 29 Most notable among With most contracts signed and project activities either in the mid-period or final stages of implementation, the Trust Fund was in its best position the efforts to intensify yet to refine how projects are measured (indicators and expected outcomes, implementation for example) and to enhance performance in areas previously identified by through better the monitoring agent as needing improvement, most notably monitoring and evaluation and procurement. According to Diego Garrido, a monitoring and reporting and M&E evaluation (M&E) specialist with the MDTF-SS, “It’s critical for the Trust practices was a Fund to have a strong performing portfolio, and a strong portfolio is highly new overall results dependent on being able to properly examine the results achieved and to en- sure those results are aligned with objectives—and expectations.� matrix that not only compiles results but Better results reporting, improved monitoring and evaluation also links them to Most notable among the efforts to intensify implementation through better the JAM objectives reporting and M&E practices was a new overall results matrix that not only compiles results but also links them to the Joint Assessment Mission (JAM) objectives and South Sudan’s national development strategy. The matrix is now part of the monitoring agent’s reports, and its development and deploy- ment marked a turning point for the Trust Fund in 2011. “All of the projects that went through restructuring as part of the extension process in late 2010 had the opportunity to strengthen their own results framework, to realign where necessary, and to give all projects more realis- tic targets,� Garrido said. The next step was to ensure that project staff had the opportunity to receive training and to be certain that everyone involved understood the value of the new results framework. “Project teams could revise their reporting and actually identify indicators that would show the results that the projects were delivering.� Monitoring and evaluation was also addressed in data quality and availabil- ity. One of the Trust Fund’s key constraints has been the lack of capacity, and specifically M&E capacity, in government institutions and project implemen- tation units. The restructuring process was an opportunity to devise a better reporting system and to ensure that all stakeholders understood the value of the new framework, as well as to make it a tool for tracking progress. Strengthening monitoring and evaluation was at the top of the MDTF-SS agen- da because it continued to rate unsatisfactorily, even as portfolio performance turned around. The monitoring agent’s final report for 2011 noted several on- going challenges contributing to the negative impact: the lack of M&E special- ists on many projects, the lack of baseline data for specific indicators, weak expertise and capacity, and a general absence of standard reporting forms. 30 SOUTH SUDAN The problems with monitoring and reporting for results go back to the be- “Right now, each ginning of the Trust Fund. In defining indicators, targets, and basic M&E project has a much arrangements, the original project papers were uneven and of mixed qual- ity, partly due to the vague structure of the JAM framework, which lacked a clearer idea of its clear method for ensuring that results were harmonized and aligned across data and its M&E all reporting channels. Since MDTF-SS activities began, projects have re- needs as we look ported to the South Sudan ministries, to the monitoring agent, and to the World Bank—and they were often giving different indicators and different toward the closure results. As the new framework was being devised, the Trust Fund team fo- of the program� cused heavily on harmonization, ensuring that everyone was using the same targets, tracking the same indicators, and employing the same definitions of those indicators for reporting. “One big discrepancy was always that the monitoring agent reports would have different data and indicators than the World Bank reports, and this led to frustration and confusion,� Garrido said. “After the positive gains made in getting contracts signed and disbursements increased, we were able to focus on the need to fix this, so we don’t have different numbers—and so the num- bers we do have are clear and in support of the JAM objectives. The JAM was based on a very political process and because of that it’s very high-level and very broad. That’s out of our hands. But with MDTF-SS operations, reporting can be much more specific.� Other challenges led to the Trust Fund’s poor monitoring and evaluation early on, such as the limited capacity in government institutions to track implementation progress and an initial reporting emphasis on fiduciary as- pects and outputs rather than on results. So after clarifying the indicators and targets, the Trust Fund first focused on improving coordination among ministries, the monitoring agent, and World Bank teams, and then on pro- moting clear understanding among all stakeholders. “This effort is ongoing, because projects have to stick with it and be sure to not fall back into the old ways of reporting,� Garrido said. “Right now, each project has a much clearer idea of its data and its M&E needs as we look to- ward the closure of the program. As a result, donors and other stakeholders, especially the people being helped, benefit. It’s a hugely important part of the process.� A focus on procurement, capacity building, and knowledge transfers The Trust Fund’s commitment to improving implementation extended be- yond the efforts to strengthen monitoring and evaluation. Other critically 31 “We have been important aspects of successful project implementation, such as financial management and procurement, were also targeted for improvement. focused on two goals: improving [the Special attention was given to training and capacity building. For instance, a MDTF‑SS projects’] series of short, one-to-two day sessions focusing on a wide range of procure- ment issues was held throughout 2011. The trainings were done with South performance until Sudan’s finance ministry, a key approach to maximizing benefit. “In the the Fund closes, and future, the kinds of procurement activities carried out under the MDTF-SS ensuring adequate will need to be conducted by the ministry,� said Prosper Nindorera, a senior procurement specialist. “So we have been focused on two goals: improving government capacity [the MDTF‑SS projects’] performance until the Fund closes, and ensuring is left behind� adequate government capacity is left behind.� According to the monitoring agent’s fourth-quarter report, procurement administration, planning, and processing were rated satisfactory for all on- going projects, and improvements were noted in areas like record keeping and plan updating. In September 2011, the monitoring agent’s office coor- dinated and led a workshop on its Independent Procurement Review, a de- tailed analysis of 14 MDTF-SS projects covering August 1, 2009–December 31, 2010. Its objective was to determine whether adequate procurement and contract management systems were in place and being used, maintained, and updated. (The review found a general improvement in the performance of the procurement units of the implementing agencies.) At the workshop, participants were involved in an open discussion that produced an action plan of recommendations for continuing the improvements. The recommen- dations covered a wide variety of potential problem areas: local counterpart staff, record management, bidding documents, procurement committees, thresholds and risk ratings, and training of management teams. Participants also stressed the need for the government to ensure sound proj- ect monitoring to keep implementation on track. And they expressed dissat- isfaction with the general failure thus far to transfer knowledge from con- sultants and project teams to government officials. The low capacity of the Procurement Policy Unit at the Ministry of Finance and Economic Planning, which is responsible for guiding and monitoring South Sudan’s public pro- curement, also came under focus. Awareness remains high that the long- term success of MDTF-SS interventions depends heavily on the ability of this unit to capably execute its functions. “We’re working with ministry officials on procurement but also on contract management issues,� Nindorera said, emphasizing that the proper manage- ment of a contract is equally critical to success as procurement. “In a volatile 32 SOUTH SUDAN environment, the situation on the ground can change very quickly and com- plicate implementation. Managing those situations—as well as understand- ing the need for transparency and public accountability—requires special knowledge and an in-depth understanding of processes.� One anticipated resource on the horizon for gaining and sharing important financial management and procurement knowledge is the Country Integrat- ed Fiduciary Assessment. The Trust Fund had long planned to conduct this study, but South Sudan’s government was not positioned to support the work before independence. In May 2011, clearance was finally given to start the assessment process. The integrated study consists of two parts: a public ex- penditure and financial accountability assessment and a country procure- ment assessment. The government is expected to receive the report in the second half of 2012. “The steps taken so far are very positive, but capacity building is a long pro- cess,� Nindorera said. “It’s not a one-year mission; it takes many years, par- ticularly in this country where we were starting from scratch.� 33 4 Financials: MDTF‑SS portfolio performance As of December 31, 2011, total funding available to the Trust Fund from donors and the Republic of South Sudan totaled $719.4 million. Projects had contracted $688.4 million, disbursed $664.6 million, and expended $624.7 million in total funds. Thirteen donors in addition to the World Bank had committed $541.3 million in signed grant agreements and deposited $548.6 million into the Multi-Donor Trust Fund for South Sudan (MDTF-SS), of which $486.3 million had been disbursed. During the same period, the matching funds committed by the South Sudan government totaled $178.3 million, all of which had been disbursed. For the 2011 calendar year, total disbursements were $85.5 million, an amount composed entirely of donor funds because all government counter- part funds had been disbursed. The undisbursed balance coming into 2011 was $141 million, so the 2011 total represented a robust 61 percent of undis- bursed funds. This figure is noteworthy, as it reflects a steady flow of dis- bursements despite year-over-year numbers that show a decrease from 2010. (Given the jump in disbursements from $59.5 million in 2009 to $188.7 mil- lion in 2010, a decline was inevitable.) In fact, the 2011 disbursement rate for donor-only funds was the second largest single-year amount disbursed since the Trust Fund began. Figure 4 looks at the quarterly status of commitments, deposits, and disbursements since the Fund became effective in 2005. The cumulative amount of deposits through 2011 rose slightly from 2010, the result of a $3.4 million deposit by Finland, the last installment of its commit- ment. Norway officially notified the World Bank in November 2011 that an outstanding commitment of $74.3 million would not be paid, resulting in a similar reduction in total donor commitments in the form of signed admin- istrative agreements from $607.5 million to $542.8 million.6 Table 2 breaks down total donor commitments and deposits. Cumulative expenditure at the implementing project level rose to $624.7 mil- lion, representing 86 percent of committed funds and 92 percent of disbursed 34 SOUTH SUDAN Figure 4. Trust Fund project portfolio trends, 2005–11 As of December 31, 2011 ($ millions) 750 Commitments 500 Deposits Disbursements 250 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 2009 2010 2011 funds (table 3). All active projects had unexpended funds remaining, with the private sector development project having the smallest balance of less than $1 million. The two worst performing projects in expenditures were the rapid impact and water and sanitation projects, due to procurement delays. The unexpended balance among all grant of all projects was $94.7 million. The projects with the highest undisbursed amount at the end of 2011 were water and sanitation (about $23 million) and health (more than $13 million). Together, the two projects accounted for 65 percent of all undisbursed funds. Other projects with fairly large amounts of undisbursed funds were agricul- ture and forestry ($5.9 million) and transport and infrastructure ($6 million). Still, the only project rated as poorly performing in disbursements was water and sanitation, according to the monitoring agent’s financial performance index. The MDTF-SS undisbursed balance totaled $55.9 million, or 10 percent of committed funds. Table 4 details the disbursement status of the 24 grant agreements for which the MDTF-SS has provided financing for operations. Cumulative investment income on the $548.6 million in donor deposits rose to slightly more than $40 million. International Development Association costs amounted to $2.2 million.7 The net commitment authority available 35 Table 2. Total donor commitments and deposits As of December 31, 2011 ($ millions) Donor Donor commitment Donor paid-in amount Netherlands 147.1 151.3 Norway 91.7a 91.7 United Kingdom 73.2 74.8 Canada 60.2 60.2 European Union 59.8 59.8 Sweden 34.0 34.0 Finland 30.1 29.8 Spain 16.9 16.9 Germany 12.0 12.0 Denmark 8.0 8.1 World Bank 5.0 5.0 Italy 3.4 3.4 Egypt 1.0 1.0 Iceland 0.4 0.5 Total 542.8 548.6b a. Revised in November 2011 from original commitment. b. Difference between total commitments and amount received is used for the administration of the Trust Fund. Note: Donor commitments are often legally defined in currencies other than U.S. dollars. As a result, the amount received may differ from the commitment depending on the exchange rate used at the time contributions were received and converted into U.S. dollars. Table 3. Disbursements and expenditures by the Trust Fund and the Republic of South Sudan, 2006–11 As of December 31, 2011 ($ millions) Disbursements Expenditures Republic Republic Trust of South Trust of South Year Fund Sudan Total Fund Sudan Total 2006 63.4 64.1 127.5 49.1 20.8 69.9 2007 42.3 46.4 88.7 41.2 32.9 74.1 2008 46.9 68.1 115.0 44.1 75.3 119.4 2009 59.5 0.0 59.5 55.2 22.6 77.8 2010 188.7 0.0 188.7 184.6 9.9 194.5 2011 85.5 0.0 85.5 81.0 8.0 89.0 a 664.9a Total 486.3 178.6 455.2 169.5 624.7 a. Figures may differ slightly from figures stated elsewhere in this document due to rounding in earlier reporting. 36 SOUTH SUDAN Table 4. Donor commitments and disbursements by project As of December 31, 2011 Disbursed funds as a share of Commitment Disbursements committed funds Project ($ millions) ($ millions) (percent) Core Fiduciary Systems 8.1 8.1 100 Core Fiduciary Systems II 3.0 3.0 100 Census 5.3 5.3 100 Census II 7.9 7.9 100 Police and Prisons 5.3 5.3 100 Police and Prisons II 20.0 20.0 100 National Currency 15.0 15.0 100 Rural Water Supply and Sanitation 19.0 19.0 100 HIV/AIDS 17.6 17.6 100 Disarmament, Demobilization, and Reintegration 40.0a 40.0 100 Livestock and Fisheries 13.5 13.5 100 Capacity Building, Institutional, and Human Resource Development 12.1 12.1 100 Emergency Transport and Infrastructure (emergency roads) 30.1 30.1 100 Rapid Impact (public works) 8.8 8.8 100 Umbrella Health I 32.0 32.0 100 Road Maintenance 40.0 38.9 97 Education Rehabilitation 25.5 24.5 96 Private Sector Development 9.0 8.5 94 Rapid Impact (support to government) 27.5 25.0 91 Emergency Transport and Infrastructure 61.4 56.2 92 Umbrella Health II 70.0 56.6 81 Agriculture and Forestry 30.2 24.3 80 Gender 10.0 7.2 72 Water Supply and Sanitation 30.0 7.4 25 Total 541.3 486.3 90 a. In January 2012, United Nations Development Programme officials agreed to release $1.3 million in unused funds from the Disarma- ment, Demobilization, and Reintegration program to the Trust Fund to be reallocated to the Core Fiduciary Systems project. (or, net donor contribution minus commitments) remained at $586.4 million. Table 5 shows all sources and uses of fund and commitments for each year of the Trust Fund, with estimates through June 2013 (the revised Trust Fund closing date). 37 Table 5. Sources and uses of funds and commitments for 2005–11 and estimates for 2012–13 As of December 31, 2011 ($ thousands) Commitments and actualsa Estimates Total 2005– Items 2005 2006 2007 2008 2009 2010 2011 11 2012–13 A. Commitment authority carried forward from previous year 0 27,114 77,675 144,588 211,067 210,895 18,608 — (5,896) Sources of funds Direct and indirect donor contributions Donor contributions received 99,352 115,758 141,174 75,268 92,457 21,255 3,423 548,524 — Investment income 387 6,382 12,727 12,568 5,533 2,021 590 40,000 500 International Development Association fee (240) (579) (497) (357) (403) (85) (14) (2,200) — B. Net direct and indirect donor contributions 99,499 121,561 153,404 87,479 97,587 23,191 3,999 586,720 500 C. Total commitment authority (A+B) 99,499 148,675 231,079 232,067 308,654 234,086 22,604 586,720 5,396 Uses of funds Commitmentsb Grant agreements signed (Phase 1) 70,000 68,000 44,762 16,000 10,000 0 0 208,762 — Supplemental financing for ongoing project — — 35,873 — 81,320 0 21,000 138,193 — New projects (Phase 2) — — — — — 40,000 0 40,000 0 Financing of ongoing projects (Phase 2) — — — — — 167,864 0 167,864 0 Unused grant amount canceledc — — — — — (522) 0 (522) (4,200) Monitoring agent 1,385 0 1,856 0 1,939 2,136 2,200 9,516 — Technical secretariat (capital, recurrent, appraisal, and supervision) 1,000 3,000 4,000 5,000 4,500 6,000 5,300 28,800 — D. Total net commitments 72,385 71,000 86,491 21,000 97,759 215,478 28,500 592,613 0 E. Residual commitment authority (C–D) 27,114 77,675 144,588 211,067 210,895 18,608 (5,896) — 0 — is not applicable. a. “Actuals� refers to disbursements at the bottom of the table. b. Commitments made to projects and the program administration. c. Canceled amount is put in the main basket of the Multi-Donor Trust Fund for South Sudan and can be used for new commitments. MDTF-SS funding to projects is based on withdrawal applications from the re- spective projects. (Counterpart funding is based on requests from the projects or agreed disbursement schedules and availability of funds.) Program admin- istration actual costs in 2011—including Technical Secretariat administration, project preparation and supervision, strategy and policy studies, capacity-­ building programs, and the cost of the monitoring agent—totaled $6.4 million. 38 5 Moving forward: A continuing commitment to results and closure South Sudan emerged as a new nation in 2011, hopeful but bearing the brutal scars of a decades-long struggle that claimed the lives of millions, displaced most of the population, and crippled development. Despite large amounts of external assistance and relative peace and security after the signing of the Comprehensive Peace Agreement (CPA), development progress has been slow. But progress has been made nonetheless, as Trust Fund results underscore. Health and education services remain weak, yet under-five mortality has declined 9 percent and net school attendance has shot up from single digits to more than 40 percent. Gains like these do not erase all hardships, but they are notable, giving hope for the possibility of better times ahead. In fact, South Sudanese remain optimistic about their future despite the dif- ficulties. In an experimental telephone survey conducted by the World Bank in 2011, 41 percent of respondents said they or someone in their family had gone without enough food in the previous year, 70 percent said they had been victims of theft and crime, and almost 50 percent said their living conditions had worsened over the past 12 months.8 Yet analysts found a striking level of optimism. About 65 percent of respondents said that they expected their liv- ing conditions to be better or much better in the year ahead, compared with just 6 percent who expected conditions to worsen. And in the weeks leading up to the January referendum, almost 60 percent of respondents believed the vote would lead to long-term peace. As 2011 gave way to 2012, however, South Sudan’s challenges as a new nation never appeared greater. Disputes with Sudan over postindependence borders and oil transit fees, among others, began to worsen by the month. Moreover, the South Sudanese economy, in the months following independence, was plagued with high inflation—fueled mostly by severe increases in food prices that spiked above 80 percent—and constricted by its overreliance on oil. The country depends on oil for almost all its exports and for around 80 percent of GDP. So the government’s decision in January 2012 to shut down all its 39 Given the critical oil fields as part of its dispute with Sudan posed serious political and socio- economic threats to the critical development process. importance of not losing ground Because South Sudan depends so much on oil revenue and external assis- after the Trust tance, the long-term division of oil proceeds and economic diversification are some of the most pressing issues facing the government, its citizens, and Fund’s successful its donor partners. The national budget for 2012, for example, was about $3 turnaround, and billion, supplemented by $1 billion of development assistance. Prior to the after the successful shutdown, oil accounted for 98 percent of the government’s fiscal revenues. With fundamental governance arrangements in flux, South Sudan remains efforts to intensify highly vulnerable. To not lose the gains made, a continuing commitment by the implementation all development stakeholders is critical. process in 2011, Extending the Trust Fund: A mutual desire to ensure completion it became clear that a final, no- Despite positive rates of disbursement and expenditures throughout 2011, cost extension the time constraints of the pending June 2012 end date left the successful clo- sure of many projects in question. At a meeting of project directors and coor- would be needed dinators in October, project teams expressed concern about completing proj- ects in the allotted time. The water and sanitation project, which at that point had disbursed only 19 percent of its funds, requested more time to carry out activities, due partly to the unalterable limits caused by South Sudan’s wet and dry seasons. Other project teams, including gender, rapid impact, and agriculture, also expressed concern about reaching full disbursements and expenditures. By the end of 2011, the full portfolio was not expected to be disbursed until August 2012, assuming the steady continuation of the 2011 monthly aver- age disbursement ($7.1 million). Expenditure estimates ranged even farther, until January 2013, based on the $7.4 million monthly average of the preced- ing year. In its 2011 fourth-quarter final report, the monitoring agent de- clared the need to consider an extension to ensure that “all funds are fully disbursed and expended for satisfactory completion of projects and achieve- ment of projects’ development objectives.� Given the critical importance of not losing ground after the Trust Fund’s successful turnaround, and after the successful efforts to intensify the im- plementation process in 2011, it became clear that a final, no-cost extension would be needed and that preparing and making the case for it would be one of the most immediate goals of early 2012. “Project teams were concerned not only about utilizing all funds but ensuring those funds were put to their most effective use,� said Helen Mbao, a senior operations officer. “South 40 SOUTH SUDAN Sudan is still a fragile environment, and it’s very important that successful Going forward, completion is the main goal.� it would be highly Government officials shared this sentiment. In early 2012, project teams desirable to presented a status report that confirmed projects were moving forward and consolidate and important achievements had been made, but that a few remaining opera- expand some of the tions would not be completed by the closing date (box 4). In a letter to the Technical Secretariat, South Sudan Minister of Finance and Economic Plan- more successful ning Kosti Manibe reiterated the “very important financial and economic activities, such as the gain� expected of the projects and warned that the government, “operating gains in strengthening under an austerity budget due to the shutdown of the oil pipeline,� would not have the funds to finish projects that were not finalized by June 2012. An livestock and official request was made to table a six-month extension at the March 2012 agriculture livelihoods meeting of the Oversight Committee “to allow orderly completion of ongoing activities.�9 Sustainability and the need for continuing commitment The support provided by the Multi-Donor Trust Fund for South Sudan (MDTF-SS) has been modest given the needs of the country, and assistance has largely meant to target immediate, basic needs. Going forward, however, it would be highly desirable to consolidate and expand some of the more suc- cessful activities, such as the gains in strengthening livestock and agriculture livelihoods. This requires a continuing commitment—not just of financial re- sources but also of engagement—from both the government and donors, as well as a willingness to communicate openly and cooperate constructively. The sustainability of MDTF-SS operations after completion depends largely on two factors: the extent of public spending in South Sudan at the time of the Trust Fund’s closure, and the extent to which the government and its partners pursue implementation of the South Sudan Development Plan. As noted, the ongoing negotiations—and tensions—between South Sudan and Sudan have created many uncertainties in the wake of postindependence op- timism. With the suspension of oil production, those uncertainties have only heightened. The austerity budget enacted by the government in response to the shutdown is expected to sharply curtail future public spending, so it’s unclear how severely activities intended to support and sustain development will be affected. The World Bank, International Monetary Fund, and many other development partners have offered advice and suggestions to the Re- public of South Sudan on how to manage in this uncertain environment, so as to protect the development gains made since 2005 under the MDTF-SS and other supportive trust funds. 41 Box 4. Key activities expected to benefit from additional time in 2012 Based on time and progress estimates by the Technical Secretariat, adhering to the planned closing date of June 30, 2012, would have resulted in at least three major operations remaining incomplete, with minor elements of another four operations likely to remain unfinished. The Oversight Committee and the Tech- nical Secretariat expect all activities will be concluded in an acceptable manner given additional time, though the three major operations at risk face considerable challenges. • All-too-common obstacles have hindered the construction of office buildings for the Gender Ministry and the South Sudan Anti-Corruption Commission, such as the high cost of raw materials, scarcity of skilled labor, and, of particular relevance, delays in processing tax exemption papers for equipment and other materials. Another hurdle has been the dispute with Sudan, which has limited the govern- ment’s ability to attend to other important but less pressing priorities, such as project implementation bottlenecks. Even so, the construction process for these offices is under way with expected comple- tion in 2012. • The construction of the Office of the Auditor General has proved problematic. Roadblocks arose linked to enlisting contractors, identifying a suitable site location on which to build, and resolving internal government issues over site ownership once location was determined. Going into 2012, Trust Fund and government officials were still discussing how viable the completion of this project might be. • The effort to increase water supply has faced many challenges. The construction of boreholes, sanita- tion facilities, and laboratories in Bentiu and Malakal has been delayed after materials expected to arrive from Sudan were held up following the border closure. Meanwhile, the construction of a hafir, an in-ground reservoir for storing rain water, in Jonglei state was slowed because of area’s recurrent insecurity. The government attempted to address the insecurity problem, though the rainy season was expected to create further operational hardships ahead of completion. Two other operations, the core fiduciary and disarmament and demobilization projects, offered unique situ- ations. Core fiduciary includes financing to support the government’s ability to account for all funds, so it will not close until all other activities have officially closed. Meanwhile, in November, the Disarmament, Demobilization, and Reintegration (DDR) project, initially scheduled to close ahead of other projects, was extended to mid-2012 to ensure project activities are wrapped up in alignment with government planning. In late 2011, the government approved a new DDR policy and circulated a strategic framework to donors for feedback. The DDR project, overseen by the United Nations Development Programme, expected to fin- ish activities within the agreed period and was commended by government officials for including female ex-combatants in the reintegration program. For its part, the World Bank is following up on some development activi- ty supported by the MDTF-SS. In 2011, the Board of Executive Directors of the World Bank approved the creation of the South Sudan Transition Trust Fund, financed through the International Bank for Reconstruction and De- velopment. The $75 million fund is expected to support three project areas: 42 SOUTH SUDAN private sector development, roads, and health services. All three operational Without activities will seek to build on MDTF-SS successes and in turn provide some reconstruction efforts sustainability for those sectors, even in the current environment. Also, as 2011 ended, South Sudan was expected to become a member of the World like the MDTF-SS, Bank Group in the year ahead, at which point it would gain access to conces- conditions would be sional financing from the International Development Association (IDA), the even worse, and the Bank’s fund for the poorest countries.10 As with the transition fund, a key consideration in deploying IDA resources will be how to build on, and pro- postindependence tect, the development gains since 2005. optimism that greeted the new nation Into the homestretch—and beyond would likely not have MDTF-SS activities have had an undeniably positive effect on South Sudan, been as strong from the capital city of Juba to the most rural and underdeveloped regions across all 10 states. But the country continues to be one of the world’s most disadvantaged, in need of large-scale assistance and continuing engagement from the international community. Simple welfare measures place South Sudan among Africa’s poorest countries, and data from large household sur- veys carried out in 2006 and 2010 indicate little overall improvement in ser- vice delivery since the signing of the CPA. Without reconstruction efforts like the MDTF-SS, conditions would be even worse, and the postindependence optimism that greeted the new nation would likely not have been as strong. Throughout 2011, the Trust Fund worked closely with all stakeholders in South Sudan’s development process to build on the improvements made to the portfolio’s performance in recent years. By strengthening the important elements of implementation that had previously proved problematic, such as monitoring and evaluation, the MDTF-SS showed stronger results on de- velopment objectives, intensifying the turnaround that began a few years earlier. That momentum carried into 2012 as well. As the Trust Fund embarked on its final months, a full-day information-sharing session was held for donors in January. Each project management team presented a comprehensive re- view of all individual operations—implementation issues, results so far, and anticipated gains yet to be made. Site visits to project areas were also offered. According to country manager Laura Kullenberg, the event was well attend- ed and well received, and it set a positive tone for the Trust Fund’s home- stretch. “This was a heavy time investment, but it was also very important to give a thorough and transparent status report entering the final months,� Kullenberg said. “This helped get everyone on the same page and focused on the Fund’s successful closure.� 43 In addition, with the end of the Trust Fund on the horizon and South Sudan’s needs still great, the MDTF-SS team began the process of analyzing the dif- ferent operational components of the Fund in its entirety. Further studies on capacity-building efforts and the effectiveness of implementation partnerships with nongovernmental organizations were expected to be finalized in 2012, providing helpful programmatic insights and building on key considerations already identified to help guide future interventions in South Sudan (box 5). Box 5. Key considerations for future development work in South Sudan Much has been written about the Multi-Donor Trust Fund for South Sudan (MDTF-SS), including studies or performance reviews by the independent advisory group Scanteam in 2007, the Joint Donor Team in 2009, the government of the Netherlands, the Organisation for Economic Co-operation and Development, an evalu- ation by a World Bank high-level mission in early 2010, and an update review in early 2011. Most of the lessons from MDTF-SS implementation are captured in those studies, but the Trust Fund team has identified a few key considerations that should be taken into account for future multidonor trust funds in South Sudan. • Consider the context. Upfront decisions on how to form a multidonor trust fund should be based on a thor- ough and ongoing contextual analysis—shared among all development partners—of the operating environ- ment. A multidonor trust fund must integrate political, technical, and capacity realities within a partner- ship framework to enable other necessary elements of operation: building political consensus, shaping policy dialogue, pooling resources, and sharing risk. All these elements must be aligned with government priorities and budget parameters. This was all only partly taken into account with the MDTF-SS. • Balance the need for immediate results with long-term goals. Without tangible benefits to the popula- tion in the short term, a long-term agenda cannot be pursued effectively. But the big picture should not be compromised in the pursuit of quick wins. Project design should accommodate concurrent implementation of projects supporting both objectives while allowing work to continue, even if some projects or components encounter difficulties. Broadly integrated programs, incorporating several proj- ects that can be adjusted as needed, to address the causes of fragility and build a basis for develop- ment may be preferable to conventional sector-based projects in South Sudan. • Align, harmonize, and coordinate. A multidonor trust fund should be aligned and its program harmo- nized and coordinated with the government in support of the government’s own development strategy, planning, and budget. In countries like South Sudan, where these instruments of governance are still emerging, the trust fund must adapt and ensure integration and support. The MDTF-SS had been in operation for a few years before it and its stakeholders developed a strategic dialogue and communi- cation strategy to work in alignment and harmonization with the government. • Ensure solid administration. As earlier studies examining the program have pointed out, a pooled fund such as the MDTF-SS simply requires stronger administrative leadership and technical capacity. Any future pooled-fund mechanism in South Sudan can learn a great deal from the early experiences of the MDTF-SS. It must have, from the outset, enough staff and the necessary skills on the ground. And it must have at its disposal the technical resources needed to avoid early delays and setbacks during project preparations. 44 Notes 1. A separate trust fund, the Sudan National Multi-Donor Trust Fund, supports recovery efforts in 10 of Sudan’s 15 states. 2. In all, the MDTF-SS has provided financing for 24 separate grant agreements for operations through December 31, 2011. 3. One ongoing project—the Disarmament, Demobilization, and Reintegration Program for South Sudan—was not rated by the monitoring agent because it was being implemented by a UN agency. 4. The measurement scale used for project performance rating, ranging from 1 (highly satisfac- tory) to 6 (highly unsatisfactory), is determined by seven parameters: project management, financial management, procurement administration, monitoring and evaluation, achieving grant objective performance, implementation of grant, and provision of counterpart funding. 5. Because this project was implemented by a UN agency, the monitoring agent did not rate its performance. The project was not subject to an Implementationl Completion Report by the World Bank. 6. Due to exchange rate differences, the donors had paid-in more funds than committed to the MDTF-SS. 7. This cost aligns with the administration agreement. 8. The survey, not affiliated with the MDTF-SS, was conducted with the South Sudan Center for Census, Statistics, and Evaluation and through the distribution of mobile phones to a repre- sentative sample of 1,000 households in the 10 state capitals. For more details, see http://blogs. worldbank.org/africacan/collecting-survey-data-via-mobile-phone-in-southern-sudan. 9. The MDTF-SS Technical Secretariat presented a document outlining options and implica- tions for closing the Fund, including a six-month extension, at the March 28, 2012, Oversight Committee meeting. Shortly thereafter, an extension was approved for project operations until December 31, 2012. Final closeout of all administrative operations will take another six months. 10. South Sudan gained World Bank membership in April 2012, and in that month received its first World Bank grant to help create jobs and increase access to finance for entrepreneurs, especially youth and women. 45