united nations industrial development ......rural areas, with high variations between states....
TRANSCRIPT
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UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
PROJECT DOCUMENT OF THE REPUBLIC OF THE SUDAN1
1 Note: The Republic of the Sudan is the official name of the country. “Sudan” without article will be used throughout the document to
facilitate the reading flow.
Project number: 170074
Project title: “Fostering inclusive economic growth in Kassala State through agro-
value chains development and access to financial services”
Thematic area code Poverty Reduction through Productive Activities
Starting date: November 2017
Implementation Duration: 36 months
Project site: Kassala State, the Sudan
Government
Co-ordinating agencies:
Ministry of Agriculture, Kassala State
Microfinance Unit – Central Bank of Sudan (MFU – CBoS)
Counterparts: Kassala Union of Farmers Associations, Kassala Union of Artisans, Kassala
Women Development Network Association (KWDNA) and other local
CBOs.
Local Microfinance institutions (MFIs) such as Kassala Microfinance and
Small Industry Microfinance, under the supervision of MFU – CBoS.
Executing agency/ cooperating
agency:
United Nations Industrial Development Organization (UNIDO)
Italian Agency for Development Cooperation (AICS)
Project Inputs: EUR 1,991,300
Support costs (13%): EUR 258,700
- Counterpart inputs: In kind
- Grand Total: EUR 2,250,000
Brief Description:
The project builds on the results and recommendations stemming from the FAO-UNIDO jointly implemented initiative known as
the “Integrated Food Security Project in Kassala State”, carried out between 2011 and 2014 and funded by Ministry of Foreign
Affairs, Trade and Development, Canada. It aims at contributing in the improvement of livelihoods, food and nutrition security of
the target population in Kassala State, especially for women and youth. More specifically, by focusing on three strategic
components, i.e.: 1. value-chain development and agriculture productivity improvement at the household level; 2. community
participation in entrepreneurship development; and 3. access to finance through local microfinance institutions), the project plans to
create sustainable job opportunities and foster inclusive economic growth in the project target areas. Over a time-span of 36
months, the project will benefit around 3,000 households and in particular (small-scale farmers, micro-enterprises, women and
young people) by partnering with public institutions, local community-based organizations and the private sector.
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TABLE of CONTENT
A. THE CONTEXT .............................................................................................................................. 4
A.1. Background and problem identification ..................................................................................................... 4
A.1.1 Agriculture Sector in Kassala ................................................................................................................................................... 5
A.1.2 Livestock Sector in Kassala ..................................................................................................................................................... 8
A.1.4. Access to Finance .................................................................................................................................................................. 10
A.1.6 Key Project Interventions ....................................................................................................................................................... 13
A.2. Institutions and actors involved ................................................................................................................. 14
A.3. Origin of the project ................................................................................................................................... 15
A.4 Target Beneficiaries .................................................................................................................................... 15
A.5 Relevance of the Project in Relation to National and International Frameworks ....................................... 16
B. REASON OF UNIDO ASSISTANCE ......................................................................................... 18
C. THE PROJECT ............................................................................................................................. 19
C.1. General Objective ....................................................................................................................................... 19
C.1.1 Specific Objective .................................................................................................................................................................. 19
C.2 UNIDO approach ........................................................................................................................................ 19
C.2.1 Project Strategy ...................................................................................................................................................................... 19
C.2.2 Outcomes, outputs and activities ............................................................................................................................................ 21
C.2.1. Project Phases ........................................................................................................................................................................ 24
C.2.2. Project management .............................................................................................................................................................. 25
C.3. Thematic Area and Code .......................................................................................................................................................... 25
C.4 The UN Sustainable Development Goals .................................................................................................................................. 26
C.5. Risks ........................................................................................................................................................... 26
C.6. Sustainability .............................................................................................................................................. 26
C.7 Gender Mainstreaming ................................................................................................................................ 26
C.8 Communication and Visibility Strategy ...................................................................................................... 27
D. BUDGET ........................................................................................................................................ 28
D.1 Counterpart inputs ....................................................................................................................................... 28
D.2. UNIDO Inputs ............................................................................................................................................ 28
The miscellaneous expenses include: ................................................................................................................ 31
These costs have been estimated at €12,000 for the 12 months project implementation. .................................. 31
D.3. AICS Inputs................................................................................................................................................ 31
E. MONITORING, REPORTING AND EVALUATION ............................................................. 34
E.1. Reporting .................................................................................................................................................... 34
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E.2. Monitoring .................................................................................................................................................. 34
E.3. Evaluation ................................................................................................................................................... 35
F. PRIOR OBLIGATIONS AND PREREQUISITES .................................................................... 35
G. LEGAL CONTEXT ...................................................................................................................... 35
H. ANNEXES ..................................................................................................................................... 35
ANNEX A - LOGICAL FRAMEWORK ......................................................................................... 36
ANNEX B - RISK MANAGEMENT MATRIX .............................................................................. 40
ANNEX C – GENDER MATRIX ..................................................................................................... 42
ANNEX D - TIMELINE OF THE ACTIVITIES ........................................................................... 44
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A. THE CONTEXT
Sudan's economy has worsened after South Sudan’s secession with the loss of 75% oil revenue, resulting in a
significant GDP contraction, more than offsetting the loss of 21% of the population, compounded by lack of
external investments, economic and financial sanctions and an unsustainable external debt of over US$ 45
Billion. The formidable challenges stemming from a weak economy, high unemployment, soaring inflation, high
fiscal deficit, continuing sanctions, and binding domestic and international borrowing constrains are further
exacerbated by the unrestricted flow of migrants from neighboring countries. Sudan’s positive attitude towards
migrants seeking sustainable sources of livelihoods in Sudan is not an act of charity but an act of human justice.
The total population of Sudan was around 39 million in 2014 (World Bank 2016), growing at an annual rate of
2.8%. Sudan is at the bottom of the UN Human Development Index 2014, ranking 167th
out of 188 countries,
with about 46.5% of the population living below the poverty line, while 8% living in extreme poverty.2
Education, literacy and skills attainment is low, and the low level of enhanced adaptive capabilities and skills to
use modern devices and to commercialize new knowledge signifies the low level of functional literacy rate. High
levels of youth unemployment, inadequate or non-existent social services, social inequality and marginalization
are all recognized drivers of resentment and potentially radicalism, and ultimately drivers and root causes of
irregular migration and forced displacement.
A.1. Background and problem identification
The economic boom following the secession of South Sudan stemmed largely from high oil prices and significant
inflows of foreign direct investment. Although Sudan lost two-thirds of its oil revenues to the newly formed
South Sudan in 2011, there was a short-lived burst in economic activity in light of rising oil prices. In recent
years, the economy has been adversely affected by political instability, cross-border violence, and poor
infrastructure, undermining Sudan’s economic capacity to attract long-term investment as a potential source of
accelerating the pace of economic development. As the export sector is heavily reliant on oil exports, the sector is
strangled in the vagaries of oil prices. Currently the agricultural sector, which accounts for almost one-third of the
GDP, is the country’s biggest employer, making up for 80% of the workforce.3 Much of the economic resources
are focused in the capital Khartoum. Furthermore, the labor market is greatly underdeveloped, and the labor force
is largely employed in the informal sector, and where there is gross mismatch between available skills and the
needs of the formal manufacturing and service sector.
Since the economic shock of South Sudan's secession, Sudan has struggled to stabilize its economy and make up
for the loss of foreign exchange earnings. The sudden loss of oil income led to a dramatic drop in the
Government’s revenue, rising inflation, soaring food prices and a weakened currency. Austerity measures
brought in to help address this situation in June 2012 have in turn further fueled inflation, forcing prices to rise
further. These austerity measures involved government cuts, including federal transfers to the regions, tax
increases and the gradual lifting of subsidies on fuel, sugar and wheat. Were these measures to be accompanied
by the right mix of policies for revitalizing the non-oil productive sector, in particularly agriculture, in the
medium to long term, they should redress the domestic and external macroeconomic imbalances created by the
loss of oil income. The austerity measures caused rising social tensions and instability as evidenced by
demonstrations, followed by the partial lift of austerity measures.
Apart from being subject to comprehensive US sanctions, Sudan is further plagued by an inability to access
international finance. Large numbers of economic sanctions have further affected trade and investment. Spill-
2 World Bank (2017). [http://data.worldbank.org/country/sudan]
3 CIA (2016) “The World Fact Book - Sudan”. [https://www.cia.gov/library/publications/the-world-factbook/geos/su.html]
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overs of the Arab Spring have additionally led to a decline in capital flows and remittances from Arabic
countries. In addition to the large public debt, making out 70% of the GDP, the GDP growth remained subdued.
While in 2007, before the secession of South Sudan, the GDP grew by 11.5%, the GDP showed growth rates of
3.1% and 4.2% in 2014 and 2015, respectively. In 2016, the growth rate of 3.5% was driven mainly by the
agricultural sector, increasing gold exports and tax reforms.4 The tax reform revenue rates as well as the revenues
from oil transit fees from South Sudan have improved the fiscal deficit from -3.5% of the GPD in 2012, to -1.6%
in 2016.5 However, it is important to mention that neither oil revenues nor oil transit fees translate into new-job
creation in a big way.
Reforms are further needed to decrease inflation, which in 2016 averaged at about 17.6%. Currently, the
country’s GDP per capita accounts to 4,500 USD.6 However, despite the high GDP per capita, the wealth is
unequally distributed, being mainly focused in urban Khartoum. According to the National Baseline Household
Survey 2009, almost half of the Sudanese population is considered poor, while almost two-thirds of them live in
rural areas, with high variations between States. Furthermore, in contrast to the high GDP per capita, youth
unemployment rate stands at 22%, while the female youth unemployment is at 33%.7 The Sudan is now
attempting to develop non-oil sources of revenues, such as gold mining and agricultural resources. As the
world’s largest exporter of gum Arabic, Sudan produces 75-80% of the world’s total output, with limited value
addition. As for the other agriculture produce, most of the products are exported in un-processed or semi-
processed forms. Job creation and income growth, therefore, is essentially a function of value addition to primary
resources, as evidenced by the industrial development experiences of developed and newly industrializing
countries. With enhanced adaptive capabilities and skills Sudan’s resource-based advantages can be converted
into competitiveness to fetch higher margins on value added products in coveted market destinations.
In light of the above consideration, after two decades of negligence, agriculture, including livestock, forestry and
fishery is back on the Sudan’s growth agenda. With the significant potential it has, agriculture can still be the
pillar of growth and diversification of the economy, poverty reduction and exports growth. As poverty is
predominantly rural and high in agricultural households, the growth in agriculture should have a larger impact on
poverty reduction relative to growth in other sectors.
A.1.1 Agriculture Sector in Kassala
One of the most promising Sudanese States where agriculture could be developed is Kassala State, which
together with Red Sea and Gedaref, comprise what is known as Eastern Sudan. These states share a number of
characteristics historically, ethnically, socially and politically. They also share the experience of long standing
underdevelopment and chronic poverty. With the outbreak of armed conflict in 1995 and its resolution through
the Eastern Sudan Peace Agreement (ESPA) signed in October 2006, the inter-linkages among the states were
further entrenched. Over 80% of Kassala State consists of flat plains, whereas rocky outcrops and hilly terrain
comprise the rest of the area. Alluvial and volcanic deposits cover the state and beneath these clays lie Basement
Complex Formations that are only a poor repository for ground water. Water sources in the state tend to be
distributed along the cracks in the geological formations and in the few areas where alluvial deposits accumulate.
The largest of the state’s aquifers is the Gash Basin which has an estimated storage capacity of 600 million cubic
4 World Bank (2017). [http://data.worldbank.org/country/sudan]
5 Tradingeconomic.com, figures from the Central Bank of Sudan. [http://www.tradingeconomics.com/sudan/government-budget]
6 CIA (2016) “The World Fact Book - Sudan”. [https://www.cia.gov/library/publications/the-world-factbook/geos/su.html]
7History of fragility and conflict: Several internal and external (Interim Strategy Note (FY 2014-2015) for the Republic of the Sudan;
August 2013)AfDB
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meters and runs North, from the Eritrean highlands and through Kassala Town. The Gash River provides the state
with around 560 million cubic meters of water per year during its two to four months of heightened flow.
The River Atbara supplies the state with an additional 12 billion cubic meters of water each year. This source,
through the Khashim el Girba dam, is used to irrigate the State’s biggest irrigation scheme, namely the New
Halfa Agricultural Scheme, which spans some 500 000 feddans. Khashim el Girba dam is also used for fishing
purposes and returns a high yield on a regular basis. Silt accumulation in the dam reservoir has however limited
the state’s capacity to manage the resources efficiently and reduced the dam’s current storage capacity to only
27% of its original amount. The dominant soil types in the state are heavy dark clay soil formations (Eutric
Vertisols) which cover most of the land of the New Halfa scheme, the Butana range lands, Khashim al Girba
(badoba) and continue towards the state’s southern border. The predominant Vertisol formations in these areas
are agriculturally useful, but difficult to work as they swells significantly during rainy season and develop deep
cracks during dry season. “Karab” lands surround the major water courses in the state and supports natural
vegetation (such as the Seyal, Samar, and Tundub trees). These areas often function as a grazing reserve for
livestock during periods of drought.The total cultivable area in Kassala State is around four million feddans8 or
40.5% of the state’s total land. Of this land, between 1.1 million and 1.58 million feddans are actually cultivated
and around half of the total cultivated area is irrigated.9
The main crops cultivated in Kassala are sorghum,
sesame, wheat, cotton, sunflowers, onions, water melons, tomatoes, okra, groundnuts, cowpeas, hibiscus, as well
as other various vegetables and fruits (oranges, grapefruits, lemons, bananas, mangoes). Additionally farmers
grow various fodder crops like alfa-alfa, abu 70, Sudan grass, etc. Considering the type of water-sources used,
the following table shows their respective coverage.
Table 1: Arable land and cultivated area by type of irrigation
Type of Irrigation Scheme/area Cultivatable area
(fed)
Utilized area
(fed)
Artificial Irrigation Halfa Agricultural Corporation 500 000 -
Halfa Sugar Scheme 50 000 40 000
Seed Production Farm 4 000 4 000
Horticulture/Investment 30 000 30 000
Flood Irrigation Gash Agriculture Scheme 720 000 80 000
Gashdai 400 000 200 000
Kalahot 35 000 7 000
River Atbara – Gerf 12 000 7 000
Gash Horticultural Gardens 30 000 10 000
Rain-fed Mechanized Farming 1 700 000 1 080 000
Traditional Rain-fed 180 000 90 000
'Terus' (small terraces)
(Water harvesting)
Terus, Wadis 156 000 13 480
Pump-irrigation Kassala Gardens Wells 50 000 22 000
East of River Atbara 150 000 -
Total 4 017 200 1 583 480
Source: Kassala Strategic Plan (2007- 2011)
8 1 feddan = 0.42 ha.
9 UNDP (2009) “Kassala State – Situation Analysis”.
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According to the final evaluation report of the UNIDO-FAO joint project “Integrated Food Security Project in
Kassala”, financed by the Canadian International Development Agency between 2011 and 2014,10
and through
discussions with the stakeholders on different levels (governmental institutions, private sector, farmers’
organizations, unions, farmers and livestock keepers, etc.), the following challenges faced by the agricultural
sector were raised:
o Low production and productivity, especially of small-holder farmers;
o Poor organizational, managerial and institutional capacity of producers and their organizations, such as
the cooperative societies and unions;
o Lack of new and/or appropriate technology and equipment;
o Weak private sector in the field of agro-based food and non-food industries;
o Weak market linkages between producers and end markets;
o Lack of market information for smallholder farmers and their organizations;
o Insufficient access to finance for rural people and farmers;
o Middlemen-dominated marketing systems, often with unfavorable terms of trade for farmers and livestock
keepers;
o Recurring droughts and floods for over the past years;
o Under-resourced extension services, especially in remote areas;
o Heavy infestation, even of fertile land, with mesquite trees;
o Weak linkages of research to needs of farming community;
o Unavailability, inadequate or low quality of agricultural inputs;
o Scarcity of water, irrigation technology and management;
o Pest and disease management;
o Overgrazing and deterioration, desertification of pastures;
o Land use disputes between pastoralists and sedentary farmers;
o Fragile and deteriorating environment (deforestation, desertification);
o Institutional gap between technology generation and technology transfer;
o Weak institutions, especially which provide agricultural extension services (e.g. MAFIL);
o Weak in water management, especially underground water;
o Absence of water research (quality and quantity) in horticultural area;
o Landmines and UXOs;
o Illegal cross border trade in agricultural commodities.
Additionally, it was observed that rain-fed cropping is mostly done without fertilizer and although few improved
varieties are available, they are mostly not accessible to small farmers. At present, except for the fully
mechanized schemes, land preparation by smallholder farmers is either done through tractor hiring from the
larger farms or it is done manually. Animal traction, like the use of camel or oxen-drawn ploughs was practiced
in most of the border areas (Telkuk, Hameish Koreb), until about two-three decades years ago11
, but it is not very
common today.
The problem associated with hiring of tractors is usually the delay in their availability, since the large farms first
finish the cultivation of their own land, before renting it out to smallholders. This usually leads to late planting
and seriously reduced harvests, as for example reported by farmers in Wad El Heleio.
10
FAO (2015). “Integrated food security project in Kassala, Sudan – Project findings and recommendations”. 11
Johan A. Van Dijk, Mohamed Hassan Ahmed (1990) “International Institute for Environment and Development: Opportunities For
Expanding Water Harvesting In Sub-Saharan Africa: The Case Of The Teras Of Kassala” Gatekeeper Series No. 40.
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Most of the farmers (of the Beja ethnicity, which constitutes the largest ethnicity) are agro-pastoralists, relying
not only on cropping but also having animals like cattle, sheep and goats. However, due to the recent conflict,
consecutive droughts and loss of traditional grazing areas, due to development of irrigation schemes and
mechanized farms, animal numbers have decreased and thus, threatened their main source of livelihood.
According to farmer and key informant interviews, the most serious constraint to rain-fed agriculture is the lack
of crop water. Generally rainfalls and rainfall reliability deteriorated during the last decades, leaving farmers in
dire straits, often with completely failing crops. Rains are extremely localized and often one part of a given
village receives sufficient while the rest does not enjoy any rainfall at all. Hence, any attempt to increase
productivity of land, household production and cropping security must include measures of water harvesting as
one of the most important interventions. The effectiveness of this measure has been proven in practice and in
scientific trials12
, with yield increases due to water harvesting of between 32 and 45% could be observed. Under
the UNIDO-FAO IFSP Project, the catchment approach of water harvesting for production of sorghum was
highly effective in increasing the yield of farmlands, which in turn contributed directly to farmers’ income.
Reported increase in production was more than 50% under the improved terrace system compared to the control.
A.1.2 Livestock Sector in Kassala
Animal production is considered as the main cash source in Kassala state. 70% of the state is pastoralists and
agro-pastoralists. The total animal count is about 7.1 million animal heads and it also supports a high number of
additional livestock which pass through the state on a seasonal basis. The state has also a count of five million
poultry (layers & broilers) and 500 tonnes of fish resources. Table 2 shows the increase in herd size from 2006 to
2011, calculated in animal heads.
With regard to the challenges facing the livestock sector, around 50% of the pastoralists in the state depend
completely on animal and animal products for their livelihoods. Their rearing system is traditional and mainly
transhumant and depends on natural grazing. Most of the herd depends on bulk feeds, such as range grass and
crop residues, whereas concentrated feeds made of cereals, molasses, bran, press cake, etc. are only rarely used
and preferably given to dairy cows.
Pastoralists have certain routes for their seasonal migrations. However, these routes have been increasingly
affected by climatic shocks, desertification, overgrazing, and lack of services along the migration routes, such as
water points (hafirs) and animal health services.
Unclear or missing demarcation of the routes, as well as blockage of traditional migration routes due to
uncontrolled expansion of the mechanized and semi-mechanized agricultural subsector has further added to the
dire situation of the transhumant livestock keepers. This situation fuels conflicts between pastoralists and
sedentary farmers when livestock enters and destroys standing crops due to feed shortage.
12
Elamin, E.M. (2010). “Effect of in-situ water harvesting techniques and slope gradient on soil moisture and millet yield in North Gedarif
area” Sudan Journal of Agricultural Research, Vol. 15, 2010.
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Table 2: Number of different types of livestock during 2006 – 2011
Year Camel Goat Sheep Cattle Equine Total
2006 602 864 950 228 1 563 183 664 382 320 000 4 100 657
2007 614 488 1 219 014 1 606 951 679 866 340 000 4 460 319
2008 614 488 1 606 951 1 219 014 679 866 342 720 4 463 039
2009 830 000 1 900 000 2 980 000 830 000 345 462 6 885 462
2010 830 000 1 947 500 3 063 440 848 260 348 225 7 037 425
2011 830 000 1 996 188 3 149 216 866 922 351 011 7 193 337
Source: Ministry of Animal Resources, Fisheries & Range Land
Other major challenges facing the livestock sector concern the control of animal health hazards resulting in
increased mortality and morbidity rates and the limited availability and outreach of veterinary services in remote
areas. Marketing of animals has also been raised as an additional challenge, whereby producers are taken
advantage off by middlemen and mediators, thus leaving limited profits for them. Better marketing conditions are
expected to increase off-takes (sales) and ease the pressure of ever increasing herd sizes on the available pastures.
In order to counter the losses in income from traditional herding and to contribute to the household income, some
women at the villages started to search for income through rearing of small animals, such as chickens, sheep and
goats, and from selling milk products (ghee and fermented milk) and handicrafts.
A.1.3 Poverty, Food Security and Nutrition Situation in Kassala
Key indicators for Kassala, such as for poverty rates, malnutrition, levels of literacy and school attendance,
especially by girls, and access to health and clean water, are among the lowest in Sudan. The poverty rate stands
at 36.3%.13
According to a recent World Food Program survey,14
22% of the households in Kassala are suffering
chronic food insecurity, while an additional 26% are chronically moderately food insecure. Most of the HHs are
unable to build a margin of safety against economic shocks caused by natural disaster, lower market prices for
their agricultural produce, high prices for staple food on markets, outbreaks of disease in livestock, or family
health emergencies.
Anthropometric data for Kassala state exhibit the dire food security situation. “Severe wasting” stands at 5.8
percent, “global acute malnutrition” at 17.7%, “severe stunting” at 19.1 percent and “global chronic malnutrition”
at 43.8 percent.15
The dependency on only one or two sources of income further increases the vulnerability of the
households. Statistics from 2012 note that in Kassala State, the poorest segment of the population produces only
1% of the food consumed by the household, while the richest segments up to 9%.16
According to information
obtained from the Ministry of Agriculture, Forestry, Irrigation and Livestock, food security is insufficient even in
an average rainfall season. Only in one out of ten years the food balance in the state is positive. In all the other
13
International Monetary Fund (2012) “Interim Poverty Reduction Strategy Paper”. 14
World Food Program (2012). “A comprehensive food security assessment in Kassala State, Sudan”.
[http://documents.wfp.org/stellent/groups/public/documents/ena/wfp258759.pdf?iframe] 15
TANGO (2005), “A Livelihood Vulnerability and Nutritional Assessment of Rural Kassala and Red Sea State” 16
World Food Program (2012). “A comprehensive food security assessment in Kassala State, Sudan”.
[http://documents.wfp.org/stellent/groups/public/documents/ena/wfp258759.pdf?iframe]
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years consumption is higher than production. A large number of IDPs and refugees from Somalia, Eritrea and
Ethiopia with estimates going from 40,000 to 120,000 are compounding the state’s negative food balance.
The impact of environmental factors on agricultural sector was again stressed since 2004 when a recurrence of
drought cycles affected the majority of rural areas, impacting hard upon the spectrum of livelihoods and income
generating activities which relate to seasonal farming, herding, wood-cutting and charcoal production.
A food security assessment carried out under SIFSIA17
showed that Kassala during 2009 together with Red Sea,
North Kordofan, North Darfur, South Darfur and White Nile were the only six states showing 30 percent or more
prevalence of malnourishment. Looking at the data concerning “depth of hunger”18
, Kassala was ranked on third
place after Red Sea State and White Nile. The food expenditure ratio (FR), also known as the “Engel Ratio”19
, for
Kassala is 68 percent, the highest of all states of Sudan.
Households with various demographic characteristics, such as aged and illiterate heads of households, and high
dependency ratios are more likely to be vulnerable to food insecurity. Illiteracy of the head of household
corresponds with low income, poor nutrition, and a scarce asset base. Livestock ownership was identified as
another robust indicator of vulnerability. Chronically vulnerable households have either few or no livestock.
Chronically vulnerable households either have few income sources or depend entirely on wood and charcoal sales
or casual labour while transitorily vulnerable households report a more varied income stream. Non-vulnerable
households rely on income sources which are resistant to drought and have fixed salaries.
Land access and water access were also identified as strong indicators of household vulnerability. Access to land
throughout the region has been distorted by conflict and population movement. Currently, land is often
inequitably controlled with sharecropping as the most common land arrangement. Access to water varies greatly
within each State. For many households, the cost of water is prohibitive and household members are forced to
compromise hygienic practices and consume poor quality water.
A.1.4. Access to Finance
According to the Interim Poverty Reduction Strategy Paper (IPRSP),20
one of the main determinants of poverty in
Sudan is related to a lack of “adequate incentives for private sector participation”. This reflects into Sudan’s
position within the 2017 Doing Business ranking: 168th out of 190 countries, 36th out of 48 developing-only
Sub-Saharan African (SSA) countries.21
In the ranking, which is obtained through a multidimensional indicator
on the business environment (from the facility of starting up a new business, to trading across borders), the access
to credit index for Sudan was equal to 15%, bringing Sudan to the 170th position out of 190 countries.22
Access to credit and more generally, financial inclusion stands at extremely low levels in Sudan. The 2014
FINDEX Report23
, based on the most comprehensive database available on financial inclusion, portrays the 17
Food Security Technical Secretariat Of The Ministry Of Agriculture (2010) “Analysis Of 2009 National Baseline Household Survey” 18
Depth of hunger is the amount of calories the deprived population have missed to reach the daily MDER per person level (MDER =
Minimum Dietary Energy Requirement) 19
Engel's law states, that for a given set of tastes and preferences, with higher income, expenditure on food (monetary value) gets higher but at
a slower rate than income. Hence, the share of food in total expenditure (Engel ratio) is lower as income is higher. 20
International Monetary Fund (2012) “Sudan - Interim Poverty Reduction Strategy Paper.”
[https://www.imf.org/external/pubs/ft/scr/2013/cr13318.pdf] 21
World Bank (2017). [http://www.doingbusiness.org/rankings] 22
World Bank (2017) “Doing Business 2017 – Sudan Economy Profile”. [http://www.doingbusiness.org/reports/global-
reports/~/media/WBG/DoingBusiness/documents/profiles/country/SDN.pdf] 23
World Bank (2014) “Global Findex 2014 Database”. [http://www.worldbank.org/en/programs/globalfindex]
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country as one of the least advanced in the region and globally. Only 15% of the total population (10% of women
and 10% of young adults24
), and only 2.1% in Kassala State,25
owns a bank account, against 29% of the
population in SSA countries (25% of women and 20% of young adults); and in Kassala State, this percentage
falls to only 2.1%. With respect to the credit market, only 4% of the population (3% of women and 1% of young
adults) borrowed money from formal financial institutions, against 6% of the population in SSA countries (6% of
women and 3% of young adults). Nevertheless, the demand for financial services in Sudan appears to be high,
especially in rural areas and among the poorest segments of the population. In 2014, in fact, 45% of the
population borrowed any money within the last twelve months, with a peak of 47% among the population in the
lowest two income quintiles. About 85% of these individuals borrowed money from family and friends, mostly to
answer urgent education or health-related needs. This is in line with the fact that for two-fifth of the population
(55% within the poorest 40% population segment), it is either “not at all possible” or “not very possible” to use
own savings in case of emergency; and it is “somewhat possible” for an additional fourth of the population.
In terms of access to credit for entrepreneurship development, only 13% of those who borrowed within the last
year used the money to start, operate or expand a farm or business. This percentage reaches 17% for borrowers
living in rural areas, while it falls to less than 10% in the lowest two income quintiles. Among better-off groups
(i.e. richest 60% population segment), almost one out of five borrowers used the money to support an already-
existing or new business.
The figures above show the presence of a high demand, as well as a great potential for a further increase, for
financial services in Sudan. This demand, however, is only marginally grasped by the supply side (i.e. the formal
financial market), which by contrast, appears to be relatively large. In Sudan, in fact, a total of 34 commercial
banks and 35 micro-finance institutions (MFIs), licensed and supervised by the Central Bank of Sudan (CBoS),
operate in the market.26
In 2008, the CBoS introduced the obligation for commercial banks to allocate at least
12% of their portfolio to micro-finance loans.27
As a consequence, some of the commercial banks decided to
open up a sister-company28
managing exclusively the micro-finance portfolio; while others, which could not
cover the high transaction costs related to providing micro-finance services given their size and market strategy,
started outsourcing to MFIs their portfolio compulsory share.
This policy ultimately boosted the Sudanese microfinance market. The number of licensed MFIs jumped from
only seven in 2012, to 30 in 2014; and with respect to the number of clients, from 50,000 in 200729
and 500,000
in 2012, up to one million in 2014. According to the study prepared in 2013 by the World Bank’s Consultative
Group to Assist the Poor (CGAP),30
in terms of client outreach and among nineteen countries offering Islamic
microfinance, Sudan ranked second after Bangladesh. Moreover, for the total outstanding microfinance portfolio,
24
Individuals aged between 15 and 24 years. 25
Ministry of Cabinet (2014). “Sudan – Multiple Indicator Cluster Survey”. [https://mics-surveys-
prod.s3.amazonaws.com/MICS5/Middle%20East%20and%20North%20Africa/Sudan/2014/Final/Sudan%202014%20MICS_English.pdf] 26
Central Bank of Sudan website. [http://www.cbos.gov.sd] 27
Micro-finance loans are up to SDG 50,000, equal to about EUR 5,000. However, according to the CBoS, only very few loans exceed the
amount of SDG 30,000 (approximately EUR 3,000). 28
For example, Bank of Khartoum, one of the biggest commercial banks operating in the Sudanese market, established the microfinance sister
company Irada. 29
Islamic Research and Training Institute (2015) “Islamic Social Finance Report 2015”.
[http://www.irti.org/English/News/Documents/ISLAMIC%20SOCIAL%20FINANCE%20REPORT%202015.pdf] 30
CGAP, 2013, “Trends in Sharia-Compliant Financial Inclusion”, Consultative Group to Help the Poor”, CGAP, the World Bank, Focus Note,
No. 84, March. [http://www.cgap.org/sites/default/files/Focus-Note-Trends-in-Sharia-Compliant-Finanicial-Inclusion-Mar-2013.PDF]
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Sudan ranked fourth after Bangladesh, Indonesia and Lebanon. In 2014, the World Bank estimated that the
micro-finance market accounted for about 0.06% of the total gross domestic product (GDP).31
However, notwithstanding the steep market acceleration, this policy alone did not prove to be entirely effective in
fostering financial inclusion among the groups left aside of the financial market – and in particular women, young
people and small-scale farmers, who traditionally lack collaterals to secure access to credit. Commercial banks, in
fact, are still bearing the risk of lending the compulsory 12% portfolio share to external MFIs, whose internal
policies are largely beyond their control. As a consequence, on the one hand, MFIs tend to focus on the less risky
population segments; while on the other hand, commercial banks are reluctant to fully comply with the CBoS
regulation, unless sufficient guarantees are provided.
In fact, according to the Microfinance Unit (MFU),32
the CBoS department in charge of the micro-finance market
supervision, in 2016 only 6.2% of the commercial banks portfolio was allocated to micro-finance loans, leaving
mostly unmet the requirement set by the regulator. Therefore, in June 2016, the CBoS, together with the Federal
Ministry of Finance, established a national facility aimed to guarantee the financing agreements signed by
commercial banks with MFIs. The facility, however, is still a “young” institution with limited experience; and
according to the MFU staff, its guarantee capacity can cover only part of the full market potential.
Moreover, important geographical gaps between States are still persisting. In 2014, about 40% of the MFIs were
mainly operating in Khartoum, which has the least poverty incidence (one-fourth of the population) compared to
the other states.33
In conclusion, access to funding sources does not seem to be an issue for MFIs operating in Sudan. On the
contrary, the main obstacle preventing an increase in the portfolio value and outreach seems rather to be the
higher risk exposure that serving specific groups, economic sectors and geographical areas implies. This barrier
hinders the local microfinance sector capacity to reach its full potential, which has been estimated at somewhere
between 7 and 8 million clients.34 35
Therefore, designing specific mechanisms aiming to redistribute the risk
between commercial banks, MFIs and micro-entrepreneurs, as well as to reduce the individual, local and systemic
risk itself, appears to be the most appropriate strategy to boost access to credit in rural areas and among less
wealthy groups.
31
World Bank (2016) “The Sudan Interim Poverty Reduction Strategy Paper Status Report”.
[http://documents.worldbank.org/curated/en/980991479985933855/The-Sudan-Interim-Poverty-Reduction-Strategy-Paper-Status-Report-a-
joint-World-Bank-Group-and-Sudan-s-ministry-of-finance-and-economic-planning-assessment] 32
Interview with the President, Deputy Manager and External Partnership Manager of the CBoS – Microfinance Unit, conducted in Khartoum
on April 28th, 2017. 33
World Bank (2016) “The Sudan Interim Poverty Reduction Strategy Paper Status Report”. 34
Islamic Research and Training Institute (2015) “Islamic Social Finance Report 2015”.
[http://www.irti.org/English/News/Documents/ISLAMIC%20SOCIAL%20FINANCE%20REPORT%202015.pdf] 35
UNICONS Consultancy Ltd. (2006) “A vision for the development and expansion of the microfinance sector in Sudan”.
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A.1.6 Key Project Interventions
Based on the results of the Inception-phase that will be conducted at the beginning of the project, this project will
look at the following Key interventions:
1. Value chain integration and productivity improvement at household level, with particular emphasis on:
Agriculture and Horticulture Development: Agricultural interventions will be geared towards increased
capacity for immediate contribution to improved household food-security, such as through propagating
and/or improving “home gardens”, and through indirect contribution by increasing a household’s income
through market-oriented production through either food or non-food commodities (such as sunflower,
sesame, fodder for livestock, etc.). Home gardens (“jubraka”) have proved to be a suitable approach to tackle
food insecurity in rural areas of Kassala and to enhance the capacity of individual women to produce
vegetables in their homes or together in so-called community or group gardens. Such interventions not only
increase a HH’s food production but also a HH’s dietary variety. Accompanying training measures in the
area of usage and preparation of vegetables will increase the project’s impact on improving the nutritional
situation of the targeted beneficiaries. These measures can be delivered in close collaboration with other
partners such as UNICEF or INGOs. Last not least home-gardening is a culturally acceptable way of
including and promoting women in developmental activities. In fact, home gardens are traditionally
cultivated by women.
Appropriate Technology and Mechanization: Interventions in this area will focus on vocational skills training
at identified VTCs or similar institutions and/or mobile training units, which can also reach the village level.
Emphasis is on skills needed along the functions of the value-chains, but especially also on the level of
primary production concerning farm mechanization and irrigation through appropriate technology. Focus is
on production and/or repair of such technologies. Training needs, especially for women and youth, will be
identified in this area and could involve appropriate technologies in conjunction with female dominated
agricultural or livestock activities.
Value addition and market development: At present population living in the rural areas have very limited
knowledge and skills on value addition, processing and post-harvest management and storage of crops.
Therefore, target beneficiaries will be trained on primary processing and improved post-harvest management
and storage practices to reduce post-harvest losses. Moreover, producer groups will be linked with the local
and nearby trading centers for marketing of surplus products.
The project will support selected farmer organizations within the target regions by building their self-help
development capacity by providing close support activities, training and exchange visits etc. and linking
them to new market opportunities and thereby improving their livelihoods and food security. This assistance
would include support to: (i) The development of organizational and managerial capacities and
empowerment of the group dynamic; (ii) The preparation of participatory development planes and farmers`
organizations business plans; and (iii) Better access to information on markets through the development of
market databases and linkage with established market information systems; and (iv) Support to self-
evaluation of the project and its impact.
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2. Community participation in value chain integration and entrepreneurship development
Entrepreneurship capacity development for community-based organizations (CBOs) is a key development
measure for the sustainability of the intended interventions. Organizations of smallholder-farmers into
producer-, or marketing groups, common enterprise groups, cooperatives societies or associations will enable
the beneficiaries not only to make maximum use of economies of scale, but also to enter more lucrative
market linkages, and last not least to gain more lobbying power. Moreover, CBOs will be the main channel
to reach small-scale farmers and other micro-entrepreneurs having an investment project idea. Through
CBOs, the investment-promoters will be trained in entrepreneurship development (e.g. business planning,
marketing, communication and lobbying) and supported in assessing the feasibility and potential of the
project; based on the screening, promoters of sustainable projects will be assisted in approaching local MFIs
for financing (see Component 3). Village Development Committees will provide one of the entry points for
target beneficiary selection, participatory PM&E, and conflict resolution. Representation of women will be
encouraged and emphasized.
3. Access to finance through local MFIs
Small-scale farmers and more generally, micro-entrepreneurs are reluctant to approach financial institutions
while at the same time, lack the collaterals required by financial service providers against the risk of default.
Therefore, a set of financial instruments to promote access to credit among the target groups will be defined,
following a participatory approach involving MFIs and other partners - such as CBOs, cooperatives,
associations of producers, etc. Financial conditions, eligibility criteria and governance mechanisms will be
defined for the following two instruments:
(a) Subsidized loans, to stimulate the demand for credit and provide an incentive to fully repay the loan;
(b) Risk-sharing and/or coverage scheme, covering part of the risk involved with lending to “risky”
segments.
The financial instruments will work in synergy with activities foreseen for Component 2 above: the
entrepreneurship development services provided by CBOs will create a pipeline of promising investment
projects to be submitted to MFIs for financing. Once a relationship of mutual trust is established between
non-financial service providers (i.e. CBOs) and financial institutions (i.e. MFIs), it is expected that
information asymmetries between borrowers and lenders will decrease – and thus, financial service providers
will be less reluctant to serve the target group.
A.2. Institutions and actors involved
The overall counterpart ministry for this project will be the Ministry of Agriculture, Forestry Irrigation and
Livestock (MAFIL) of Kassala State. A representative of the Federal Ministry of Agriculture will be a member of
the project’s steering committee. Both ministries will provide Liaison Officers (e.g. Director General or Director-
Planning Department -) who will be in regular contact with the PMU and will be permanent members of the
Project Steering Committee (PSC). This arrangement will ensure maximum collaboration in any extension and
implementation activities in the fields of agricultural interventions. Depending on the type of interventions,
specific tasks may be implemented through collaborating partners. In such cases Letters of Agreement will be
agreed upon and signed. The Microfinance Unit at the Central Bank of Sudan (MFU-CBoS) will be an important
institution which will cooperate in the implementation of the Component 3 (Access to finance) of project.
Finally, the local CBOs, cooperatives and small-scale farmers’ associations (such as Kassala Union of Farmers
Associations, Kassala Women Development Network Association, Kassala Union of Artisans) and MFIs (such as
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Kassala Microfinance and Small Industry Microfinance) will be a crucial actor to be involved in the field
activities.
A.3. Origin of the project
The project builds on the results of the UNIDO-FAO joint project “Integrated Food Security Project (IFSP) in
Kassala”, financed by the Canadian International Development Agency between 2011 and 2014. The project
comprised the following three components, which were interlinked and reinforced one other in order to achieve
the maximum impact at minimum cost:
Increased agricultural and livestock productivity at household level in targeted communities.
Improved employment and livelihood possibilities for youth and the rural population, particularly women.
Strengthened community participation in economic growth and conflict mitigation practices.
The first component was led by FAO, the second by the United Nations Industrial Development Organization
(UNIDO), while the third was led jointly by the two agencies. Project activities were divided into horticulture,
fishery, sunflower, water harvesting, livestock and skill clusters. The activities were implemented mainly in
localities of Kassala State, namely Khashm Al- Girba, Reef Aroma, North Delta and West Kassala. Activities
were implemented on a limited scale in two enclave villages – Dweih and Al Muqataa – in Gadarif State, which
shares with Kassala the Al-Girba lake, an important area for the fishery cluster.
The project focused on the sustainable and equitable use of available resources with a gender-based approach to
poverty reduction, the promotion of development and addressing food security and malnutrition at household
level. Gender equality, however, remains an unfulfilled promise in Sudan, where men and women do not receive
equal treatment and where women face structural gender-based discrimination influenced by local culture. More
specifically, the project was implemented in remote villages with very poor services and with conservative
communities in which women have a high rate of illiteracy and are prevented from participating in outdoor
activities. The project invested in women within their limited private space, with the aim of increasing social
equity. In the final evaluation report, the main recommendation was to build on the initiative by “link[ing]
successful cluster beneficiaries to value chain and microfinance institutions (MFIs)”, which are the main areas of
work in this project.
A.4 Target Beneficiaries
Considering the duration of the project, i.e. 36 months, it is expected that 3,000 households will directly benefit
from the project activities. This number of households represents an estimated population of around 15,000
people, tentatively distributed over 10 villages or clusters of villages. The project will aim at the following target
beneficiaries that are (or would be) directly involved in agricultural production, agro-based processing and/or
marketing or other income generating activities related to the selected value chains:
Smallholder farmers and their associations36;
Women and their associations, especially also female-headed households;
Disadvantaged youth and youth who are not in school or are school drop outs or ex-combatants;
Micro, small and medium enterprises and industries, especially those involved in agro-based processing.
36
In this context the term “association” is a generic term and includes cooperative societies, producer and marketing groups, common interest
groups, craftsmen groups, etc.
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Youth who never had the chance for formal education or training form a particularly important target group.
Another specific activity for youths will be involving them in agro-based processing activities. Other
opportunities are the acquisition of marketable skills through the skills training offered by the project.
Women and female headed households are a specifically vulnerable group. The Project will target women and
women groups through gender-sensitive value-chain selection and with specific packages for food production and
productivity enhancement. Other options include access to appropriate technologies for cultivation, storage and
processing, such as small power tillers, water pumps for horticultural production, solar vegetable dryers, grinding
machine, hermetic storage bags, metallic bins, etc.
Final project site selection will be based on the following considerations:
i. Areas with severe food deficiencies but potential to reach food security and production of marketable
surpluses beyond subsistence;
ii. Suitability for agricultural and/or livestock production and income generation activities along identified
short-listed value chains;
iii. Utilization of existing rural and social infrastructure already created through other development
initiatives of the state, UN agencies, NGOs and other organizations; and
iv. Accessibility by considering security and travel restrictions.
A.5 Relevance of the Project in Relation to National and International Frameworks
The Federal Ministry of Agriculture has already launched its next five year plan, namely the “Second Five-Year
Plan 2012-2016” for the agricultural sector. The Ministry’s vision is stated as “Comprehensive national socio-
economic renaissance based on a dynamic agricultural sector that is capable of rapid and sustained growth”. Its
mission statement reads as “Transform the agricultural sector from predominantly traditional ways and low
economic efficiency to a market economy driven sector with mechanisms of increasing productivity and high
quality with significant contribution to the local production and export through sustainable management of
resources”. The Strategy’s goals and objectives are outlined as follows:
a) Achieving food security;
b) Raising the rates of production and productivity to the global level;
c) Development of the agricultural exports including plants and animals;
d) Reduce poverty by 50% by the end of the year 2015 and provide employment opportunities and increase
the income of the individual;
e) Increase the income of farmers;
f) Rehabilitation of existing agricultural projects;
g) Achieve balanced development of all regions of the country to encourage stability in the rural areas;
h) Development and protection of natural resources to ensure sustainability and renewed its potentiality for
production;
i) Maximize the added value of agricultural production in line with the needs of manufacturing industries;
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j) Encourage and support the scientific and applied researches in the areas of land use, water and plant
production, livestock and fisheries;
k) Encourage the national and foreign private sector to increase its investments in the agricultural sector,
both plant and animal;
l) Development of forests and forest products;
m) Maintain the strains of national plants and animals and register their intellectual property;
n) The full exploitation and optimization of the Sudan share of Nile water, groundwater and other sources
and increase water use efficiency through the selection of appropriate crops and modern irrigation
systems.
Due its two-pronged approach of food security and value-chain development, this project results fit very well into
this broad strategy, and especially supports the Strategy’s objectives (a), (b), (d), (e), (h), (i) and (k).
On state level, the Kassala State Government has endorsed the “Kassala State Strategic Plan 2012 – 2016 which
outlines the strategic direction of Kassala’s economic sectors37
. In this document the sectoral ministries have
outlined their vision and mission, as well as their strategic and general development objectives. In the following
the main collaborating ministries and their respective objectives are presented.
The State Ministry of Agriculture, Forestry, Irrigation & Animal Wealth and Fisheries (MAFI) has outlined its
vision as “A food secure and environmentally and developmentally balanced Kassala State”, and its mission as
“Food security achieved and living conditions improved for the whole state population”, as well as its objectives:
Strategic objective:
To increase productivity, introduce improved technologies and protect the environment
General objectives:
a) To achieve food security in the state;
b) To finance horticultural production for export;
c) To assist establishment of food processing industry in the state;
d) To increase agricultural production through introduction of modern technologies including water
harvesting and land preparation techniques;
e) Legalization of agricultural activity in the state and identification of farmers and farm workers;
f) Better utilization of the available land, water and human resources in the state including Gash river
harnessing project;
g) Increasing the tree cover up to 10% of the state land area including mesquite eradication and alternative
energy projects;
h) Improve agricultural services including capacity building and apply quality assurance standards.
37
State Strategic Planning Council (2011) “Kassala State Strategic Plan 2012 – 2016”.
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Again this project intended outcomes and outputs to the respective Ministries objectives is established in the
areas of food security, increased production in the crops, horticulture, linkage to processing facilities, as well as
improved water harvesting and extension services. Furthermore, the CBoS Policies 2017 for microfinance stress
on the importance to stimulate the demand by “encourag[ing] the establishment of centers for the selection and
development of projects and provision of non-financial services”, with the goal of reducing information
asymmetries (and therefore, risk) and creating a pipeline of sustainable investment projects to be financed by
MFIs. “Enhanc[ing] the value-chain projects by integrating microfinance projects with small & medium
enterprises” is also defined as a CBoS priority for financial inclusion in rural areas. Moreover, the MFU-CBoS
Strategic Vision document emphasizes on the importance of taking advantage of the already-existing guarantee
facilities, while foreseeing new and innovative risk-sharing and/or coverage mechanisms, especially at the
community level.38
Within the framework of the Sustainable Development Goal n. 8 “Decent work and economic growth”,
increasing access to credit is among the tools identified to reach the target: “Promote development-oriented
policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and
encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through
access to financial services”.39
In the “United Nations Development Assistance Framework” (UNDAF) 2013-16
for Sudan,40
MFIs are considered as a key partner in pillar n.1 “Poverty reduction, inclusive growth and
sustainable livelihoods”, with the goal of “reform[ing] and develop[ing] microfinance policies and institutions
that are pro-poor and responsive to the market, with training of small-scale producers in microfinance
management and linkages to national funding institutions”.
B. REASON OF UNIDO ASSISTANCE
UNIDO41
has been actively involved in similar projects funded by EU Sudan since 2003, with projects covering a
wide range of technical assistance interventions, such as vocational training, cluster building and value chain
development. Moreover, between 2011 and 2014, UNIDO and FAO jointly implemented the project “Integrated
Food Security in Kassala”, financed by the Canadian International Development Agency. The project comprised
the following three components, which were interlinked and reinforced one other in order to achieve the
maximum impact at minimum cost:
Increased agricultural and livestock productivity at household level in targeted communities.
Improved employment and livelihood possibilities for youth and the rural population, particularly women.
Strengthened community participation in economic growth and conflict mitigation practices.
38
UNICONS Consultancy Ltd. (2006) “A vision for the development and expansion of the microfinance sector in Sudan”. During the
interview, the MFU-CBoS mentioned that even though it dates back to 2006, it is still the document defining the strategic vision of CBoS in the
sector. 39
UNDP website. [http://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-8-decent-work-and-economic-
growth/targets/] 40
United Nations (2012) “United Nations Development Assistance Framework for the Republic of Sudan”. [http://www.unfpa.org/undaf-
sudan-2013-2016] 41
In this context, UNIDO, as the United Nation’s specialized agency for industrial development, has been providing technical assistance for
developing countries for social and economic development and environmental sustainability, through specialized technical services in the areas
such as poverty reduction, trade capacity-building, developing private-public partnerships, innovation, technology transfer and productivity
enhancement, industrial infrastructure and institution building, clean energy, and in the domain of gender, the projects formulated by UNIDO
specifically addresses the empowerment of women through access to education, training, science and technology to enable them to engage in
productive activities.
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Therefore, UNIDO accumulated an extensive experience and knowledge of the local context in Kassala State.
Moreover, strong relationships of mutual trust between UNIDO and public institutions, private sector and CBOs
were developed, making possible to build on the results of the initiative, through the present project.
C. THE PROJECT
C.1. General Objective
To contribute to improved food, nutritional security and livelihoods of the target communities in Kassala State
(Sudan), especially for women and youth.
C.1.1 Specific Objective
To create sustainable job opportunities and foster inclusive economic growth in Kassala State through agro-
value chains development and access to finance.
C.2 UNIDO approach
C.2.1 Project Strategy
The project is pursuing an integrated approach in order to meet its objectives in improving livelihoods, food and
nutrition security. Within the perspective of a value-chain development approach, integrating access to financial
and non-financial services, it seeks market-oriented sustainable solutions to create sustainable job opportunities
and foster inclusive economic growth. It combines interventions in the sphere of agricultural production and
processing with interventions in the agricultural technology and agro-based micro- to small enterprise
development sphere, including facilitation to access to finance through existing MFIs operating in the local
market.
The entry and focal point will be CBOs, including associations gathering small-scale farmers and more generally,
micro-entrepreneurs; already-existing civil society organizations will be involved in a technical assistance and
coaching to better answer their members’ needs and lobbying for their interests.
The figure in the next page portrays the general approach that will be followed throughout the project. In this
context a VC-analysis will be used to design the interventions. It will map the respective VC functions (such as
input supply, production, collection, processing, marketing and trade), describe their operators (farmers,
pastoralists, middlemen, traders, private sector business, etc.) and supporters (service providers such as the public
and private sector in the field of extension, financial services, lobbying), and last not least the general enabling or
hindering framework conditions and prevailing attitudes surrounding the respective value-chain. Furthermore the
project is guided by core programming principles, namely promotion of participation, gender equity, sustainable
resource management and sustainability.
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The up-grading and improvement of a selected agro-value chain(s) would see UNIDO focusing on the
strengthening of agro-based micro-enterprises, thus creating additional income and employment opportunities. It
will also lead to the identification of opportunities for Private-Public-Partnerships (PPP)42
.
Logical approach to agro-value chain analysis and development
1. Selecting and prioritizing the value chain: Sub-sector, product of commodity
2. Analysing the selected value chain
Mapping Market analysis Technical capacities Economic performance
3. Formulating upgrading strategy for the selected value chain
Identify constraints and development opportunities Roles, responsibilities and coordination mechanisms
4. Implementing the value chain upgrading strategy
Enabling environment Capacity building for
support institutions or
services
Development of basic
infrastructure
Knowledge and
technology transfer
Partnership building
investment promotion
5. Monitoring and evaluation
Designing a monitoring tool Impact assessment
In order to contribute to the achievement of this overall goal, three interlinked components have been identified,
and namely:
Component 1: “Value-chain integration and agriculture productivity improvement at the household level”
Component 2: “Community participation in value chain integration and entrepreneurship development”
Component 3: “Access to finance through local MFIs”
42
PPPs are linkages and collaboration between public (e.g. governmental actors, donor funded projects and their executing agencies,
etc.) and the private sector (e.g. an oil mill, a dairy plant, an export company, etc.). While the private sector is expected to contribute
financially and technically within his core business, the public sector can support accompanying measures of more public interest such
as formation and capacity building of cooperative societies, producer and marketing associations, HIV/AIDS awareness campaigns, etc.
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C.2.2 Outcomes, outputs and activities
The project aims to achieve the following outcomes:
1. The value-addition in the agriculture and food-processing sector is increased and small-scale farmers’ access
to local and regional market is improved.
2. Small-scale farmers and micro-entrepreneurs’ capacities and skills in the field of entrepreneurship
development are improved and promoters of sustainable investment projects are supported in applying for
financing through MFIs.
3. Small-scale farmers and micro-entrepreneurs’ access to financial services from local MFIs is improved.
In order to achieve the above stated results, seven outputs are to be accomplished (see Annex A – Logical
Framework for more details, including indicators, baseline and targets):
Output 0.1: “Project launched and the Project Management Structure established (inception phase)”
Activities:
Establish a Project Coordination Unit (PCU) incl.:
Establish TORs for project personnel and recruit project personnel;
Set up office and procure office equipment;
Prepare operational budget and implementation work plan.
Conduct an Inception Phase including:
Market study to analyse market potential and opportunities for promising value chains
Identification of potential value-chain(s) and the preparation of an upgrading strategy for at
least two (2) value chain(s);
Selection of stakeholders and beneficiaries;
Selection of target areas and villages;
Update of the LOGframe, outputs/activities, the work plan and budget (re-distribution if
required).
Establishment of Project Steering & Management structures incl. convening first Project Steering
Committee meeting and the validation of the IP report.
Set-up and implement an M&E Framework.
Output 1.1: “Value-chain analysis for selected agricultural commodities conducted and upgrading
strategies formulated”
Activities:
Analysis and validation of identified value chains and upgrading strategies by the stakeholders;
Finalize capacity building and other support required by the producer groups and stakeholders in the
identified value chains;
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Design and finalize approach and methodology for provision of tools and equipment to the producer
groups on cost sharing basis.
Output 1.2: “Value chain upgrading strategies implemented”
The objective of this output is to involve village common enterprise groups and individuals in becoming involved
in agro-processing and repair of related equipment with a view to add value to agricultural and livestock products
at community level. Activities under this component will include training in improved preservation and
processing according to market needs; procurement of essential equipment, tools and starter kits; training on how
to use and maintain equipment procured. Based on the chosen technologies need based training curricula will be
developed and training will be conducted in basic business management and marketing skills for self-
employment. Other activities include linkages to local companies for additional employment opportunities, and
provision of starter tool kits.
Activities:
Procurement and delivery of tools and equipment and start up kits, on cost sharing basis;
Identify training institutions and service providers;
Finalise different training curricula;
Training of producer groups on improved production and post-harvest management techniques;
Training of farmer and women groups on primary/secondary processing, storage and packaging;
Training of youth groups on basic repair and maintenance of tools and equipment;
Capacity building of producer groups and CBOs on collective marketing;
Identify markets for the processed products and develop market linkages at local and regional level.
Output 1.3: “New marketable and innovative products explored”
Activities:
Identify and explore new marketable products for value addition and marketing (Moringa, honey,
essential oil, etc.);
Piloting for production, processing and marketing of new product(s).
Output 2.1: “Technical capacity of CBOs and stakeholders in value chain approach enhanced”
Activities:
Training of stakeholders and CBOs on value chain methodology;
Capacity building of CBOs on organizational and leadership skills, conflict management and group
dynamics;
Equip CBOs with necessary start up kits and related support.
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Output 2.2: “Technical knowhow of CBOs, stakeholders and target beneficiaries in basic entrepreneurship
and business management improved”
Training of CBOs and stakeholders in business planning and management and entrepreneurship
development;
Training of target beneficiaries in basic accounting, book keeping and numeracy, preparing business
plan, etc.
Output 3.1: “Financial instruments to facilitate micro-entrepreneurs’ access to financial services, including
a KPI system, designed and made operational”
Activities:
Selection of national and local partners to be sub-contracted - In close coordination with UNIDO
consultants, the AICS expert in financial inclusion will participate in the activities foreseen for 0.1
Inception phase, with the objective of selecting specific MFIs and other local and national partners to
be involved in the implementation of activities falling within Component 3. Potential partners will be
screened taking into consideration their field of specialization, value-added and socio-economic
outreach. A due diligence exercise will be conducted specifically for MFIs and financial institutions
in general.
Design of the financial instruments to facilitate micro-entrepreneurs access to financial services - An
in-depth analysis of the microfinance market in Kassala will be conducted, taking into account the
needs and gaps both on the demand and supply side of the market. Based on the results, a set of
financial instruments to promote access to credit among the target groups will be defined, following a
participatory approach involving MFIs and other partners selected through activity 3.1.1 above.
Financial conditions, eligibility criteria and governance mechanisms will be defined for the following
instruments (the final design will be endorsed by the project Steering Committee):
Subsidized loans – Financial packages made of a loan plus a conditional grant component will be
designed, with the objective of stimulating the demand for microfinance loans among the groups
who are financially excluded and reluctant to approach formal financial institutions. At the same
time, subsidized loans will also offer financial incentives to encourage micro-entrepreneurs to
repay the loan. Upon the disbursement of a loan to a micro-entrepreneur fulfilling a set of socio-
economic criteria, and upon his/her timely and full repayment of the loan, the borrower will
receive a grant between one-fifth and one-third of the loan capital. With a budget allocation of
EUR 150,000, it will be possible to subsidize a total loan portfolio between EUR 450,000 and
EUR 750,000. Assuming an average loan amount of about EUR 600, this translates into a total
outreach from 750 to almost 1,250 micro-entrepreneurs, depending on the loan subsidy
percentage;
Risk-sharing and/or coverage scheme – A mechanism for a risk sharing and/or coverage scheme,
such as a credit guarantee scheme (“loan-by-loan” or portfolio approach) and/or equity fund,
rooted at the local level and compliant with the Islamic finance principles, will be defined, with
the goal of improving access to finance among the target groups. By reducing the individual,
local and systemic risk, the scheme will work in close synergy with activity Component 2
(Entrepreneurship development), whose goal is to create a pipeline of sustainable investment
projects, ready to be financed by microfinance service providers. Trainings and coaching
activities, in fact, will aim at reducing information asymmetries between non-financial service
providers, MFIs and borrowers; while the risk-sharing and/or coverage scheme will provide an
24 | P a g e
incentive to MFIs to finance the investment-promoters (i.e. micro-enterprises benefitting from
the project non-financial services). Assuming a risk-coverage percentage reaching 80% of each
loan, with a budget allocation of EUR 150,000 will make possible to cover a total loan portfolio
between EUR 375,000 and EUR 562.500, depending on the leverage (between 1:2 and 1:3).
With an average loan amount of about EUR 600, about 600 to 900 micro-enterprises could
benefit from the scheme.
Activation of the financial instruments and definition of a KPI system - Agreements and other
contractual documentation will be stipulated with MFIs and other partners, to activate the above-
described financial instruments. MFIs loan officers and partners’ staff will be trained in the
management and use of the financial instruments. A set of indicators, measuring the performance of
the financial instruments in terms of financial additionality (i.e. the capacity of including “new
comers” to the financial market) and sustainability, will be defined and constantly monitored.
Technical assistance in provision, monitoring & evaluation - Technical assistance will be a crucial
aspect to ensure the achievement of the expected results; therefore, it will be provided to MFIs and
other partners in a constant and timely manner, by the AICS expert in financial inclusion.
Exit Strategy for a hand-over to local MFIs and other partners.
C.2.1. Project Phases
1. Inception phase: 4 months
The Inception phase is required for assessing and fine tuning different areas of implementation related to the
outlined outputs. This period will also provide inputs for possible adjustments to be made in the project
document. In addition, it is foreseen that a system for developing the elements of an “Exit Strategy”, and
participatory monitoring and evaluation culture to contribute to project sustainability, including following-up of
identified risks (risk mitigation), will be formulated. Documentation, baseline data and analytical reports will be
compiled and finalized by the inception team based on the above mentioned review and activities, for submission
to the AICS, the local authorities and stakeholders for approval/endorsement.
2. Implementation phase: 28 months
The Implementation phase is the core component of the project and will generate virtually all of the outputs and
success indicator products/KPIs if the project evolves as planned. Nonetheless, project management and its
steering committee and advisory boards must be open to possible alterations required in focus and in operational
activities if changing conditions and/or new information suggests that modifications to implementation plans will
better facilitate project objectives, results, downstream and upstream as well as long term desired results.
3. Phasing-out & closure phase: last 4 months
Handing over, disseminate results, end-of-project evaluation, final reporting.
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C.2.2. Project management
The project management structure foresees two organizational units:
1. UNIDO Project Implementation Unit (PIU):
UNIDO project component will be under the supervision of the Agri-Business Development Department
(PTC/AGR) - Agro-Industries Technology Division (PTC/AGR/AIT) - PTC/AGR/AIT, in close cooperation with
the AICS Office and UNIDO Field Office in Sudan.
UNIDO – PIU will be performing the technical coordination and monitoring functions in the field. UNIDO will
be responsible for the delivery of different activities under all Results, as stipulated in the project document and
work plan.
The PIU will be composed of:
A Junior Project Technical Advisor (JPTA - international), in charge of leading the PIU/project
coordination
A National Project Coordinator
National and International experts (to be defined during the Inception Phase)
Gender Expert
1 Driver
Admin and Finance Officer
2. Project Steering Committee (PSC):
In particular, the main Terms of Reference of the PSC will be to:
A. Provide the Project with strategic direction in terms of implementation of project activities;
B. Ensure the effective coordination and cooperation between all stakeholders;
C. Review and approve, at the end of the Inception Phase, the documents containing the reviewed version of
the Project and the relevant Action Plan, prepared by the PCU;
D. Monitor the progress of project activities against the planned outputs; and
E. Review and approve the work plans prepared by the PIU. Members of the PSC will be representatives of
the counterparts involved. During the PSC’s meetings representatives of associations of the sectors and
the unions can be invited to attend, but shall not be entitled to cast a vote.
The Project Steering Committee will meet quarterly and have the main task to monitor the implementation of the
project as defined in the work plan, provide relevant input and also to offer the opportunity of coordination
between stakeholders.
C.3. Thematic Area and Code
The thematic area: EC11 and code PRP
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C.4 The UN Sustainable Development Goals
The proposed project will contribute towards “SDG 1”: End poverty in all its forms everywhere”. It will also
contribute to “SDG 5”: Achieve gender equality and empower all women and girls, and “SDG 9”: Build resilient
infrastructure, promote inclusive and sustainable industrialization and foster innovation.
It also falls into UNIDO’s poverty reduction portfolio (EC1) and in particular Agribusiness and Rural Enterprise
Development (GC11); its thematic area is poverty reduction through productive activities (PRP).
C.5. Risks
The Risk Management Matrix can be found in Annex B
C.6. Sustainability
The term “sustainability” in the context of this project relates to the potential for self-sustaining development
after project interventions have been phased out. It concerns the capacities of the intermediaries and beneficiaries
to continue with economic and social activities initiated under the project without further heavy dependence on
external support and also without compromising environmental sustainability.
This will be achieved through implementing the project under the guidance of local authorities in Kassala State
through the Project Steering Committee, as well as through identifying solutions in a participatory way in
collaboration with beneficiaries and their associations and a wide variety of stakeholders, specifically the
respective government agencies at various levels, research stations, other donor agencies, NGOs, and the private
sector.
By investing in basic infrastructure and equipment, as well as comprehensive training of extension workers,
small-scale farmers and micro-entrepreneurs, and encouraging member participation in community social and
economic groups, the potential for long-term sustainability can be realized. In particular Component 3, and more
specifically the risk-sharing and/or coverage system, can have (under certain conditions43
) a multiplier effect in
terms of number of beneficiaries; and a long-term impact to ensure the project sustainability and broadly
speaking, to foster financial inclusion in Kassala State. If all the parties (MFIs, CBOs and micro-entrepreneurs)
are committed and rather than focusing on short-term individual gains, understand the full potential of the scheme
in promoting investment in rural communities, the scheme can continue for decades. Mutualistic credit guarantee
schemes, in fact, have a crucial role in promoting development in communities with limited or no access to
credit.44
C.7 Gender Mainstreaming
Gender mainstreaming will be achieved through the assistance of a National Gender Expert who will be initially
supported and backstopped by an International Gender Expert. Whereas the International Gender Expert will 43
i.e. if properly designed and loan portfolio managed within a perspective of sustainability; if the beneficiary micro-entrepreneurs’
delinquency rate (i.e. share of unpaid loans) is limited; and all parties (MFIs, CBOs and micro-entrepreneurs) avoid to adopt moral hazard
behaviours. 44
FAO (2013) “Credit guarantees systems for agriculture and rural enterprise development”.
[http://www.fao.org/docrep/017/i3123e/i3123e00.pdf]
27 | P a g e
assist in building capacities concerning gender mainstreaming concepts, approaches and tools, as well as advising
the project’s technical officers on gender sensitive programming and monitoring, the National Expert ensures
utilization of local knowledge and experience.
Considering the conservative and very tradition-based culture of Kassala, the National Gender Expert will ensure
appropriate access to and acceptability within the communities. The main partners for promoting gender
mainstreaming and considering gender-aspects of the project will be the Ministry of Social Welfare, but also the
existing networks of women groups like Kassala Women Development Association Network (KWDNA).
The project will orient itself along UNIDO gender mainstreaming guidelines in order to develop the project’s
gender-strategy during the inception phase in order to inform further PM&E and implementation activities.
Within each of the project components, the following measures will be taken: (i) specific needs of both men and
women will be taken into account; (ii) inputs will be equally accessible for men and women; (iii) women will be
encouraged to participate in the existing women associations; (iv) training of project staff and potential sub-
contractors/partners involved in the project in gender analysis and mainstreaming; and (v) monitoring the impact
of activities on both men and women.
As part of the baseline key quantitative and qualitative indicators will be measured as in order to monitor,
evaluate, and draw lessons learnt from the project’s achievements in gender mainstreaming and women
empowerment. These indicators include the following: (i) the proportion of women participating in currently
existing community groups;(ii) the proportion of community leader positions held by women; (iii) women’s
perception of control over income generated by the economic activities in which they participate; and (iv) what
was the attendance record of men and women during workshops and trainings.
Experiences in other states also show that the approach provides an excellent platform for the transition from
emergency to recovery and normal life especially among women and vulnerable groups.
Regarding project staff, a gender balance in the recruitment of project management and staff will be emphasized,
and efforts will be made to ensure that recruited staff either has existing knowledge on integrating a gender
perspective or their capacity will be built in this area, or will be trained (e. g. I Know Gender Course on UN
Women’s eLearning Campus: https://trainingcentre.unwomen.org/ and UN Women Training Centre
https://trainingcentre.unwomen.org/course/index.php?categoryid=1).
A Gender Matrix has been included as Annex C.
C.8 Communication and Visibility Strategy
In the inception phase of the project, a communication and visibility plan will be drafted and discussed with the
AICS Office in Sudan. Elements which will be considered are inter alia press releases, press conferences, press
visits, brochures and newsletters, web site activities, photographs and other suitable measures. The
communication and visibility plan will be drafted according to AICS template and will include overall objectives,
the target groups within Sudan and specify detailed activities and indicators of achievement. During the whole
duration of the project, UNIDO will report on the implementation of the communication and visibility plan as
well as milestones and outputs achieved as agreed to in the plan. A mechanism for awareness creation and
highlighting the facets and progress of programme implementation in local media should also be established.
28 | P a g e
D. BUDGET
D.1 Counterpart inputs
Both at inception and implementation phases, UNIDO will facilitate the involvement of relevant local National
Counterparts that will be requested to provide relevant inputs in kind and to participate in the project’s activities
for ensuring an effective project implementation.
The local Government of Kassala State will, with the assistance of the project stakeholders:
Guarantee timely and effective full support throughout the implementation of the various project phases;
Contribute to the collection and analysis of available related national data and material with its own
professional field capacity;
Provide all necessary regional government authorizations to carry out field activities, taking into
consideration that the absence of these authorizations could prevent or delay field project activities;
Make available, when possible, office space with telephone facilities for use by the experts during the
missions and provide meeting rooms for official meetings and workshops.
D.2. UNIDO Inputs
UNIDO will be responsible for:
Maintaining the project management unit, recruiting national and international experts and consultants
required for the project. The project will strive to achieve a gender balanced structure;
Organizing and implementing all the activities planned in the validated action plan in synergy with the
local institutions and with the private sector for assuring project sustainability; and
Managing and monitoring the overall implementation of the project, making sure priority is given to
national expertise whenever applicable, insuring the gender balance through the entire project cycle.
The following international and national staff will be recruited /involved through UNIDO:
1. International staff
Project Manager at UNIDO Headquarters, including technical support managers (in kind)
An administrative project assistant at UNIDO Headquarters (in-kind)
One Junior Project Technical Advisor as Project Technical Coordinator based in the PIU in Kassala,
Sudan. The cost is estimated to be up to a maximum of €7,000 per month to be paid as a lump sum
including fee45
, travel costs (i.e. air-return ticket in economy class from home to duty station), ad hoc
DSA rate, R&R every 3 months, terminals.
45
The fee will be calculated by UNIDO Project Personnel Services
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International experts in specific areas will be recruited (however the required number of experts and w/m
will be determined during the Inception Phase based on findings and recommendations). The cost is
estimated to be up to a maximum of €15,000 per month to be paid as a lump sum including fee46
, travel
costs (i.e. air-return ticket in economy class from home to duty station), DSA and terminals.
2. National staff
National Staff Estimated Unit Cost in
€ No .of m
Nat.-Project
Coordinator
3,000 36
Mechanization/VC
National Expert
2,500 36
Gender Expert 2,200 30
Financial
expert/translator (part
time)
1,000 12
Admin/Fin Assistant 1,000 36
1 driver 625 36
Additional staff requirements will be eventually defined during the Project Inception Phase.
Explanatory NOTE for the position of a JPTA and NPC
A Junior Project Technical Advisor (JPTA)
The JPTA will be a internationally recruited technical professional with the expertise required for the Sudan
Project. Overall, He/She, as an impartial professional, has the direct responsibility for technically managing the
implementation to achieve the expected project results, providing technical inputs and taking initiatives for
translating the project strategy and methodology as well as HR needs to sustain project outputs and impact. Close
collaboration with the Inception team will be essential. The JPTA, acting as the Technical Manager on location
for directing project management in all its aspects with the Unit(PMU/PIU,) will be the international contact
person or interlocutor for meetings with AICS and other development partners, the Project Manager at UNIDO
HQ, the private sector and Government counterparts at Ministerial level.
The National Project Coordinator (NPC)
The services of a full time experienced Sudanese NPC, a senior technical professional in agro value chains
development, who understands the implementation requirements and its management implications of the
project is essential for the following: he/she will closely work with the JPTA and all other team members to
provide details for six-monthly planning exercises that need to be updated, technical inputs within his/her Terms
of Reference (TOR) and to oversee/manage with the Finance/Admin Officer, the logistics for implementation.
In the absence of the JPTA, the NPC is also expected to manage the Project Team. The NPC is to link up with
different stakeholders and local project partners at several levels during day-to-day project implementation, in
line with the planned outputs/results. His/her strength in interpersonal communication with stakeholders, the
Inception Phase team and several project beneficiaries' groups will be a must for project implementation.
46
The fee will be calculated by UNIDO Project Personnel Services
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3. Sub-contracts
Based on the experience gathered during the implementation of UNIDO-FAO joint Program in Kassala and in
view of the 36 months duration of the project, 4 sub-contracting services have been forecasted to facilitate the
smooth implementation of the project as follows:
Output Nature of sub-contract Estimated Costs
in €
Output 1.2 Sub-contract to local NGOs on selected agro VC (s) for their development 300,000
Output 2.2 Sub-contract to local NGO to conduct Capacity Building Programs in VC
development to CBOs
105,600
Output 2.3 Subcontract to local NGO to conduct Capacity Building Programs in
entrepreneurship development and business management to CBOs
150,000
Output 3.1 Subcontract(s) for the implementation of financial instruments to facilitate access
to micro-finance for MSMEs
255,000
The 4 Sub-contracts will be confirmed during the Project Inception Phase and detailed ToRs will be prepared. All
sub-contracts will be awarded following UNIDO rules and regulation for procurement of equipment and
services.47
4. Training48
All project team members will undergo gender-sensitization trainings;
Training programs for target beneficiaries will be designed based on findings during the Inception Phase.
Other specific training on income generation and employment oriented sector development will be implemented
as required.
5. Equipment and supplies
Office facilities including:
o 4 laptops
o 2 printers
o Office furniture (chairs, desks etc.)
o Internet connection
o Air-conditioning system
o Generator
The total amount estimated is €20,000.
It should be noted that UNIDO will put at disposal one vehicle (pick-up) utilized during the implementation of
the joint UNIDO-FAO program in Kassala closed at the end of 2014.
47
Specifications for sub-contracting services will be included in a document, i.e. the Terms of Reference that will be published on UNIDO
WEB site and offers will be collected within a set deadline. The offers received will be evaluated and the most technically and economically
offer will be selected as winner and awarded the sub-contract. 48
Capacity Building programs are going to be implemented through sub-contracting services.
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Furthermore, small equipment and tools will be purchased by the project for the selected VC(s)
development/processing. The required equipment for implementation phase will be identified during the
Inception Phase. A budget allocation of €150,000 has been estimated for this purpose.
All purchases will be subject to UNIDO rules and regulation for procurement of equipment and services49
.
6. Miscellaneous
The miscellaneous expenses include:
Fuel and operation/maintenance of the vehicle;
Communication costs (mobile cards, telephone, internet etc.);
Printing and stationary;
Cleaning of premises and security services.
These costs have been estimated at €36,000 for the 36 months project implementation.
D.3. AICS Inputs
Given that AICS is currently implementing a set of projects in the Kassala State, and over the last years AICS has
developed an extensive experience and knowledge of the context, the project will be implemented in
collaboration with AICS-Khartoum staff working in on-going initiatives in the field of agriculture and poverty
alleviation, as well as gender equality. Moreover, with respect to Component 3 (Access to finance from MFIs),
AICS-Khartoum will provide a full-time expert in financial inclusion, with experience in microcredit and design
of credit guarantee schemes. The cost of the expert in financial inclusion will be borne by AICS-Khartoum, with
own funds above the budget in this section.
49
Specifications for the equipment/machinery will be included in a document, i.e. the Terms of Reference that will be published on UNIDO
WEB site and offers will be collected within a set deadline. The offers received will be evaluated and the most technically and economically
bid will be selected as winner and awarded the purchase.
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D4. Tentative Outputs-based project budget for three year operation:
Budget
lines Cost p. unit N. of units TOT Y1 Y2 Y3
OUTPUT 0.1 - Project launched (inception phase) and the Project Management structure established
11-00 JPTA 7,000 36 252,000 84,000 84,000 84,000
15-00 Project travel (National staff) 15,000 3 45,000 15,000 15,000 15,000
16-00 UNIDO staff travel 5,000 3 15,000 5,000 5,000 5,000
17-00 National experts & admin staff
National project coord 3,000 36 108,000 36,000 36,000 36,000
Mechanization / VC expert 2,500 36 90,000 30,000 30,000 30,000
Gender expert 2,200 30 66,000 13,200 26,400 26,400
Admin/Fin assistant 1,000 36 36,000 12,000 12,000 12,000
Driver 625 36 22,500 7,500 7,500 7,500
30-00 In service training, conferences, workshops 2,000 3 6,000 2,000 2,000 2,000
43-00 Premises 1,000 36 36,000 12,000 12,000 12,000
45-00 Equipment (office facilities) 20,000 1 20,000 20,000 0 0
51-00 Miscellaneous (operational and maintenance of vehicles;
communication incl. internet costs, mobile phone cards;
printing; cleaning of office premises and security;
stationary) 1,000 36 36,000 12,000 12,000 12,000
SUBTOT OUTPUT 0.1 732,500 248,700 241,900 241,900
OUTPUT 1.1 - Value chain upgrading strategies implemented
11-00 International experts 15,000 2 30,000 30,000 0 0
17-00 National experts (VC) 7,000 1 7,000 7,000 0 0
30-00 In service training, conferences, workshops 6,900 2 13,800 13,800 0 0
SUBTOT OUTPUT 1.1 50,800 50,800 0 0
OUTPUT 1.2 - Value chain upgrading strategies implemented
21-00 Subcontract to local NGOs on selected agro-VC(s) for
their development 300,000 1 300,000 200,000 0 100,000
45-00 Equipment (depending on VC(s) selected, provision of
small equipment to start processing / value addition) 150,000 1 150,000 100,000 0 50,000
SUBTOT OUTPUT 1.2 450,000 300,000 0 150,000
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OUTPUT 1.3 - New marketable and innovative products explored
11-00 International experts 15,000 2 30,000 0 15,000 15,000
30-00 In service training (creation of awareness) 20,000 1 20,000 0 10,000 10,000
45-00 Equipment (Small equipment to be verified during the
inception phase) 46,400 1 46,400 0 40,000 6,400
SUBTOT OUTPUT 1.3 96,400 0 65,000 31,400
OUTPUT 2.1 - Technical capacities of CBOs and stakeholders in value chain approach enhanced
21-00 Subcontract local NGO to conduct capacity building
programs in VC development to CBOs 105,600 1 105,600 50,000 35,600 20,000
SUBTOT OUTPUT 2.1 105,600 50,000 35,600 20,000
OUTPUT 2.2- Technical knowhow of CBOs, stakeholders and target beneficiaries in basic entrepreneurship and business management improved
21-00 Subcontract to local NGOs to conduct capacity building
programs in entrepreneurship development and business
management to CBOs 60,000 3 150,000 30,000 60,000 60,000
SUBTOT OUTPUT 2.2 150,000 30,000 60,000 60,000
OUTPUT 3.1 - Financial instruments to facilitate micro-entrepreneurs’ access to financial services, including a KPI system, designed and made
operational
11-00 International experts 15,000 2 30,000 15,000 15,000 0
17-00 National experts & admin staff (financial
expert/translator) 12,000 3 36,000 12,000 12,000 12,000
21-00 Subcontracts for the implementation of financial
instruments to facilitate access to microfinance 255,000 1 255,000 75,000 180,000 0
30-00 In service training, conferences, workshops 45,000 1 45,000 15,000 10,000 20,000
SUBTOT OUTPUT 3.1 366,000 117,000 217,000 32,000
Final evaluation 40,000 1 40,000 0 0 40,000
TOTAL INPUTS 1,991,300 796,500 619,500 575,300
13% OVERHEAD 258,700 103,500 80,500 74,700
GRAND TOTAL 2,250,000 900,000 700,000 650,000
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E. MONITORING, REPORTING AND EVALUATION
Monitoring and evaluation will be done with the use of the key performance indicators (KPIs) at the level of
project outcomes and outputs, respectively. The indicators and their means of verification are included in the
LOG Frame. The key performance indicators as well as contextual qualitative information will be collected
according to the following indicative Monitoring & Evaluation Work plan.
Type of M&E activity Responsible Parties Time Frame
Inception report UNIDO Project Manager
Steering Committee
Within first four months of
project start up
M&E design and tools to collect and record data
(performance indicators)
UNIDO Project Manager
PIU (Chief Technical
Advisor + National project
coordinator)
Start of project
Regular monitoring and analysis of performance
indicators PIU
Regularly to feed into project
management
Quarterly progress reports PIU, Stakeholders’ PRC,
consultation workshops Every three months
Mid progress report
UNIDO Project Manager
PIU (Chief Technical
Advisor + National project
coordinator)
After six months
Terminal project report on lessons learned
UNIDO commissioned
international consultant,
local evaluation service
provider
Evaluation at least one month
before the end of the project;
report at the end of project
implementation
Visits to field sites UNIDO Project Manager Six in the total 36 months
PIU = Project Implementation Unit
Collection and processing of baseline data and specific information on project related relevant details regarding
socioeconomic conditions of beneficiaries involved is foreseen through household surveys and surveys with
training groups. These baselines will be regularly updated by the project.
E.1. Reporting
a) For regular monitoring, there will be quarterly project progress reports which provide information and analysis
about the progress of planned activities, which may lead to adjustments in project work plan.
b) One half-yearly report prepared not later than 30 calendar days after the end of a six-month period.
c) Final report. This will be prepared within three months, after the end of implementation phase.
E.2. Monitoring
As prior indicated, the Project Steering Committee (PSC) will be formally responsible for the overall monitoring
and supervision of the Action. The PSC will meet on a quarterly basis to review progress against the work-plan.
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The indicators and their means of verification are included in the LOGframe. Based on the outcome of different
monitoring exercises these verification indicators could be modified.
E.3. Evaluation
The Project will be subject to independent review processes assisted by the UNIDO Evaluation Group. The
indicative budget allocated for the evaluation activities is EUR 40,000. The project counterparts, stakeholders and
beneficiary groups will be informed at least two months in advance of the dates foreseen for the external
evaluation missions.
F. PRIOR OBLIGATIONS AND PREREQUISITES
The Ministry of Agriculture of Kassala State has presented to AICS - Italian Agency for Development
Cooperation the letter of request here attached. AICS-Khartoum Office has therefore asked UNIDO to prepare a
project proposal, based on this request.
G. LEGAL CONTEXT
The present project is governed by the provisions of the Standard Basic Cooperation Agreement between the
Government of the Republic of the Sudan and UNIDO, signed on 8 March 1988.
H. ANNEXES
Annex A: Logical Framework
Annex B: Risk Management Matrix
Annex C: Gender Matrix
Annex D: Timeline of the Activities
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ANNEX A - LOGICAL FRAMEWORK
Intervention logic Objectively verifiable indicators of
achievement
Sources and means of
verification Assumptions
Overall objective
To contribute to improved food, nutritional
security and livelihoods of the target
communities in Kassala State (Sudan),
especially for women and youth
% of HH who during the last seven days,
borrowed food or money for food
(baseline: 24%; target: 12%)
% of HH with Food Consumption Score
less than 28 i.e. “poor consumption”
(baseline: 30%; target: 15%)
% of HH expenditure on food (baseline:
75%; target: 55%)
WFP (2012) and baseline
study
Project survey reports and
monitoring reports
Political situation remains stable
in Sudan and enabling
environment ushered in by all
stakeholders involved in
formulation, implementation and
monitoring of the programme
components.
Specific objective To create sustainable job opportunities and
foster inclusive economic growth in Kassala
State through value chain development and
access to finance
N. of job/micro-enterprises created
(baseline: 0; target: 1,000)
Increase in the household income
(baseline: 0; target: 25%)
- Baseline study
- Annual assessment reports
- Annual statistics report
Enabling environment ushered in
by all stakeholders involved in
implementation and monitoring
of the programme components.
Outcomes 1. The value-added in the agriculture and
food-processing sector is increased and
small-scale farmers’ access to local and
regional market is improved.
2. Small-scale farmers and micro-
entrepreneurs’ capacities and skills in the
field of entrepreneurship development are
improved and promoters of sustainable
investment projects are supported in
applying for financing through MFIs.
3. Small-scale farmers and micro-
entrepreneurs’ access to financial services
from local MFIs is improved.
% of targeted HH reporting
production/productivity increases
(baseline: 0; target: 60%)
% of targeted HH selling part of the
production (baseline: 0; target: 60%)
N. of trainees (baseline: 0; target: 3,000)
N. of loans disbursed / N. of loan
applications (baseline: 0; target: 50%)
N. of loans disbursed (baseline: 0; target:
1,200)
% of borrower micro-entrepreneurs who
have never had a loan (baseline: 0; target:
60%)
% of small-scale farmers out of the total
number of loan beneficiaries (baseline: 0;
target: 60%)
- Baseline study
- Project survey reports and
monitoring reports
Valid, reliable and authentic
data available adding to the
correctness and completeness
of assessments
Full participation of
stakeholders and target
beneficiaries during the project
implementation
Favourable climate for
cultivation of crops
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0 Management Component
0.1 Output 0.1: Project (inception phase) launched
and the Project Management Structure
established”
- Market Study and Inception
Phase report prepared and
endorsed by local authorities;
- Project Management and
Governance mechanism in
place.
- Market Study and
Inception report
- PSC meetings
report
- Progress reports
Full cooperation from local
authorities and counterparts
Activities
0.1.1
Establish a Project Coordination Unit (PCU) incl.:
Establish TORs for project personnel and recruit project personnel;
Set up office and procure office equipment;
Prepare operational budget and implementation WP.
0.1.2
Conduct an Inception Phase including:
Market study to analyse market potential and opportunities for promising value chains
Identification of potential value-chain(s) and the preparation of an upgrading strategy for at least two (2) value chain(s);
Selection of stakeholders and beneficiaries;
Selection of target areas and villages;
Update of the LOGframe, outputs/activities, the work plan and budget (re-distribution if required).
0.1.3 Establishment of Project Steering & Management structures incl. the convening first Project Steering Committee and the validation of the IP report.
0.1.4 Set-up and implement an M&E Framework.
1 COMPONENT 1: “Value-chain integration and agriculture productivity improvement at the household level”
1.1
Output 1.1: “Value-chain analysis for selected
agricultural commodities conducted and
upgrading strategies formulated”
- Number of VC selected,
analyzed, and VC upgrading
strategies developed and
implemented;
- Number of stakeholders trained
in the VC-development concept
and methodology.
- Baseline study
- Project survey
reports and
monitoring
reports
Full cooperation from local
authorities and counterparts
Activities
1.1.1 Analysis and validation of identified value chains and upgrading strategies by the stakeholders
1.1.2 Finalize capacity building and other support required by the producer groups and stakeholders in the identified value chains
1.1.3 Design and finalize approach and methodology for provision of tools and equipment to the producer groups on cost sharing basis
1.2
Output 1.2: “Value chain upgrading strategies
implemented”
- Number of tools, equipment and
“starter tool kits” provided
(disaggregated by gender and
age);
- Number and type of agro-
processing equipment provided;
- Number of farming groups
trained to apply improved
farming equipment for increased
productivity (disaggregated by
gender & age).
- Project survey
reports and
monitoring
reports
Target beneficiaries adopt
project approach and
implementation plan
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Activities
1.2.1 Procurement and delivery of tools and equipment and start up kits, on cost sharing basis
1.2.2 Identify training institutions and service providers
1.2.3 Finalize different training curricula
1.2.4 Training of producer groups on improved production and post-harvest management techniques
1.2.5 Training of farmer and women groups on primary/secondary processing, storage and packaging
1.2.6 Training of youth groups on basic repair and maintenance of tools and equipment
1.2.7 Capacity building of producer groups and CBOs on collective marketing
1.2.8 Identify markets for the processed products and develop market linkages at local and regional level
1.3 Output 1.3: “New marketable and innovative
products are explored”
Number of innovative products/value-
chains explored
- Project survey reports and
monitoring reports
Availability of
technology and market
for new products
Activities
1.3.1 Identify and explore new marketable products for value addition and marketing (Moringa, honey, essential oil, etc.)
1.3.2 Piloting for production, processing and marketing of new product(s)
2 COMPONENT 2: “Community participation in value-chain integration and entrepreneurship development”
2.1 Output 2.1: “Technical Capacity of CBOs and
stakeholders in Value chain approach
enhanced”
- N. of CBOs supported
- N. of training sessions
- Project survey reports and
monitoring reports
Full support from
local CBOs.
Activities
2.1.1 Training of stakeholders and CBOs on value chain methodology
2.1.2 Capacity building of CBOs on organizational and leadership skills, conflict management and group dynamics
2.1.3 Equip CBOs with necessary start up kits and related support
2.2 Output 2.2: “Technical knowhow of CBOS,
stakeholders and target beneficiaries in basic
entrepreneurship and business management
improved”
- N. of CBOs and target beneficiaries
trained
- N. of training sessions
- Project survey reports and
monitoring reports
Full support from
local CBOs.
Activities
2.2.1 Training of CBOs and stakeholders in business planning and management and entrepreneurship development
2.2.2
Training of target beneficiaries in basic accounting, book keeping and numeracy, preparing business plan, etc.
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3 COMPONENT 3: Access to financial services from local MFIs
3.1 Output 3.1. “Financial instruments to
facilitate micro-entrepreneurs’ access to
financial services, including a KPI system,
designed and made operational.”
- A package of incentives operational
- A risk-sharing and/or coverage
mechanism operational
- Project survey reports and
monitoring reports
Full support from
national and local
partners and
stakeholders in the
microfinance sector.
Activities
3.1.1 Selection of national and local partners to be sub-contracted
3.1.2 Design of the financial instruments to facilitate micro-entrepreneurs access to financial services
3.1.3 Activation of the financial instruments and definition of a KPI system
3.1.4 Technical assistance in provision, monitoring & evaluation
3.1.5 Exit Strategy for a hand-over to local MFIs and other partners
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ANNEX B - RISK MANAGEMENT MATRIX
Title
Country, Region/
The Sudan, Kassala State Budget 2,250,000 € Duration
36
months
Risk Definition
Risk Level
Indicate
Investment
LM Result
Level
Risk Response
Operational Risks rating
Op1 Implementation is delayed or prevented due to conflict Low
Whole project
Depending on the nature of the conflict negotiate with the
ministrty and with AICS on alternative implementation methods
and/or areas, review of project scope, time frame and budget, or
premature closure.
Op2 Security situation does not allow UN staff to visit project areas Low
Whole
project
Depending on the causes prompting the restrictions, an
assessment will be done and response will be same as under Op1
Op3 Delays or unavailability of security clearances for field missions for
international staff High Whole project
Increased communication with the respective stakeholders and
support from Ministry of Agriculture and UN-RSCO
Op4 Implementation is delayed due to inadequate collaboration of partners Low
Output
Analyse causes for inadequate collaboration and agree with
governmental and/or implementing partners (IPs) on corrective
actions. Foster ownership of project in partner institutions and
communities
Op5 Low implementation and techncial capacity of governmental and IPs
High Output
Include capacity building measures for partner organizations for
specific skills needed for achievement of intended results.
Op6 Covering too large geographic areas resulting in logistical problems Low
Output
Careful selection of project sites (village clusters) considering
selection criteria such as minimum availability of infrastructure
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and accessibility
Financial Risks
Fin1 Funding may not be sufficient to meet needs of project due to price
increases since 2011 (inflation of Sudanese Pound due to oil crisis) High Whole
project
Review targets and scope and adjust number of beneficiaries and/or
scope of activities to fit available funding. Engage in fund-raising.
Development Risks
Dev1 Continued and severe drought during the project’s lifetime Low
Ultimate
outcome
Support processing of agricultural raw materials for value addtion
to mitigate risk of low farmer incomes.
Dev2 Inaccesability of villages due to impassable roads during rainy season High Outputs
Integrate agricultural calendar into work plans with due tolerance.
Involve village extensions and leaders into project implementation.
Dev3 Community development approach insufficiently understood by members Low Output
Traditional village elders and leaders need to be
incorporated/involved in the process.
Dev4 Complications with the financial approach and high default rate.
High Output
Careful analysis of financial issues, and close work with experts on
the subject as well as the ground work carried out by AICS expert
in financial inclusion. Effective and sincere partnerships with
CBOs, small-scale farmers/micro-entrepreneurs and MFIs.
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ANNEX C – GENDER MATRIX
Outputs and
Activities
Possible Gendered Outputs Possible Gender Indicators Indicative Gender Outcomes
Inception phase
Gender impact assessments.
Sex disaggregated data and
gender information for the
project implementation phase
are collected.
Consultation with women
trainees are undertaken
continuously.
Dialogues are facilitated
among key stakeholders from
government, civil society,
private sector and community
leaders to discuss gender
implications of the project
initiatives.
Value chain(s) are identified
and assessed, for developing
job opportunities for young
women & men.
# Reports produced.
# Gender impact assessments
undertaken.
# Activities planned for supporting
gender main-streaming.
# Women supported through
training, coaching and other
services.
# Gender specific targets included
in the framework.
# Specific recommendations for
equitable access to benefits for
male and female trainees and
entrepreneurs.
# Dialogues on gender
implications of the project’s
processes facilitated.
Projects design reflects women’s participation in
training and promotes women’s economic
empowerment.
Policy makers and enforcers make use of gender
sensitive information for decision-making.
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Implementation
Phase
Monitoring system, with a
clear Gender matrix is set up.
The plan of action for the
project implementation has to
take in account technology
transfer and capacity building
activities, target female and
youth, in synergy with local
institutions.
Training materials and
infrastructures are developed/
provide in synergy with the
local institutions taking into
account the women needs.
Encourage all stakeholders
involved to offer equal
opportunities for female and
male professionals involved in
the project.
# Gender analysis/ assessments
carried out with participation of all
partners.
# Female participation in
technology transfer and capacity
building events/ initiatives.
# Promotional material prepared
for supporting gender
mainstreaming.
# Women farmers and managers
engaged in project activities.
# of measures taken to support
women’s and men’s professional
to be involved in the project
initiatives.
% Women trained.
# Events undertaken to sensitize
trainers on gender equality.
Women’s income increase.
Working conditions for women improve through
application of appropriate technologies.
Design and development of machinery and tools are
increasingly appropriate to specific women’s work.
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ANNEX D - TIMELINE OF THE ACTIVITIES
“Fostering inclusive economic growth in Kassala State through agro-value
chains development and access to financial services”
YEAR 1 YEAR 2 YEAR 3
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
0 Management Component
0.1.1
Establish a Project Coordination Unit (PCU) incl.:
Establish TORs for project personnel and recruit project personnel;
Set up office and procure office equipment;
Prepare operational budget and implementation WP.
X
0.1.2
Conduct an Inception Phase including:
Market study to analyse market potential and opportunities for
promising value chains
Identification of potential value-chain(s) and the preparation of an
upgrading strategy for at least two (2) value chain(s);
Selection of stakeholders and beneficiaries;
Selection of target areas and villages;
Update of the LOGframe, outputs/activities, the work plan and
budget (re-distribution if required).
X
0.1.3 Establishment of Project Steering & Management structures incl. the
convening first Project Steering Committee and the validation of the IP
report.
X X X X X X
0.1.4 Set-up and implement an M&E Framework. X X X X X X X X X X X X
1 COMPONENT 1: “Value-chain integration and agriculture productivity improvement at the household level”
Output 1.1: “Value-chain analysis for selected agricultural commodities conducted and upgrading strategies formulated”
1.1.1 Analysis and validation of identified value chains and upgrading strategies by
the stakeholders X X
1.1.2 Finalize capacity building and other support required by the producer groups
and stakeholders in the identified value chains X X
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1.1.3 Design and finalize approach and methodology for provision of tools and
equipment to the producer groups on cost sharing basis X X
Output 1.2: “Value chain upgrading strategies implemented”
1.2.1 Procurement and delivery of tools and equipment and start up kits, on cost
sharing basis X X X
1.2.2 Identify training institutions and service providers X
1.2.3 Finalize different training curricula X X
1.2.4 Training of producer groups on improved production and post-harvest
management techniques X X
X
1.2.5 Training of farmer and women groups on primary/secondary processing,
storage and packaging X X X
1.2.6 Training of youth groups on basic repair and maintenance of tools and
equipment
X X X
1.2.7 Capacity building of producer groups and CBOs on collective marketing X X X
1.2.8 Identify markets for the processed products and develop market linkages at
local and regional level X X X X X X X X X X
Output 1.3: “New marketable and innovative products are explored”
1.3.1 Identify and explore new marketable products for value addition and
marketing (Moringa, honey, essential oil, etc.) X
1.3.2 Piloting for production, processing and marketing of new product(s) X X X X X X X
2 COMPONENT 2: “Community participation in value-chain integration and entrepreneurship development”
Output 2.1: “Provision of services in (a) access to market; and (b) entrepreneurship development through CBOs, farmers' organizations, cooperatives and similar
common enterprise groups”
2.1.1 Training of stakeholders and CBOs on value chain methodology X X X
2.1.2 Capacity building of CBOs on organizational and leadership skills, conflict
management and group dynamics X X X
2.1.3 Equip CBOs with necessary start up kits and related support X X X X X X X
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Output 2.2: “Technical knowhow of CBOS, stakeholders and target beneficiaries in basic entrepreneurship and business management improved”
2.2.1 Training of CBOs and stakeholders in business planning and management
and entrepreneurship development X X X X X
2.2.2 Training of target beneficiaries in basic accounting, book keeping and
numeracy, preparing business plan, etc. X X X X X X X X X X X
3 COMPONENT 3: Access to financial services from local MFIs
Output 3.1: Design and activation of financial instruments to facilitate micro-entrepreneurs’ access to financial services, including a KPI system
3.1.1 Select MFI to be sub-contracted in order to implement the newly-developed
system for an improved micro-entrepreneurs access to financial services X X
3.1.2 Design a system to facilitate micro-entrepreneurs access to financial services
incl. a monitoring system X X
3.1.3 Implement the newly-developed system for an improved micro-entrepreneurs
access to financial services X X X X X X X X X X
3.1.4 Monitor and Evaluate the implementation X X X X X
3.1.5 Elaborate an Exit Strategy in order to hand over the system to a local MFI X X X