Sudan Multi -Donor Trust Fund

Sudan Multi -Donor Trust Fund Project Proposal Project name Graduate Employment Fund Program for 2005-2008 Applicant Ministry of Social Welfare, Women and Child Affairs “MSWWCA” Brief description During it’s four years period (2005-2008) the program aims at the recruitment of “297,050” graduates in government, private sector, national projects, transformational training, medium and small size projects and large projects. Project development objective It is a national project for combating the serious problem of unemployment among University and Higher Institutes graduates which is over 17%. Through financing community driven development projects initiated by the graduates they will be able to participate in the development of their rural environment and reverse the trend of rural urban migration. The graduates will also participate in illiteracy and malaria eradication campaigns and social awareness. The project will also help against drawing the unemployed graduates into conflict areas.

Performance indicators Comparing graduates targeted with realization and impact on poverty reduction among them. Sector Service sector Location All over the country Total project cost * The three years program total cost during the period 2006-2008 = 319 million U.S.$ * the total amount needed from foreign sources = 79 million U.S $ * The total amount required from MDTF during the period Sep 2006 to 31 Dec 2008 = 23.927.700 U.S $ (equal 30% of which is required from MDTF) (Details in page 6) Implementing agency Graduate Employment Fund Implementing period 4 Years “2005-2008” Contact for further information General Director- Mrs. Hiba M. Farid

1 1. Strategic Context and Rationale: a)Key development issues: The project aims at the creation of productive job opportunities to absorb the ever increasing number of university and higher institutes graduates seeking jobs. The rapid growth of higher education sector and the increase in the number of graduates and the lack of sufficient additional job opportunities in the different sectors of the economy led to the mismatch between supply and demand and the frustration of the unemployed graduates. The project aims at reducing poverty among the graduates and their families. Non-employment of graduates implies waste of valuable resources spent in the educational process. The government realized the importance of addressing the issue of graduate unemployment and included combating graduate unemployment in its strategy and policies and positive steps were taken in the year 2003 to create the Graduate Employment Fund. Frustrated unemployed graduates is a potential cause of social upheavals and disturbs social harmony and they can easily be recruited in conflicts areas in the South , Darfur and the East of Sudan. Since the impact of the project is to reduce participation of graduates in conflicts, as such the project fits well within the framework of Sustainable Peace, Development and Poverty Eradication document.(JAM) b) Rationale for MDF Involvement

The sources of finance for the program as stipulated in the plan are mainly from the Ministry of Finance, Banks, Private sector and organizations. The late receipt of funds affected adversely the program for the year 2005.No foreign funds from organizations is received and hence the importance of the involvement of DMF. The figures below reflect the budget estimates for the years 2006,2007,2008 respectively. The first year (2005)was financed from the Graduates Portfolio but the late receipt of the funds and its small amount did not facilitate the realization of all of the objectives of the first year of the program. However, all the funds received (1142500000SD) are allocated to small projects and in 20 July 2005 a deficit of (51125000SD) is recorded and a large number of projects are waiting for financing. The Fund has already started the activities in illiteracy eradication in co-operation with relevant offices at the ministry of education and processed the proposals for transformational training which will start soon. In the field of influencing general policies the Fund made a positive contribution including the adoption of combating graduates unemployment in the national strategy and government declared policies. A contribution was also made towards the revision of educational policies of higher education. Since the project is expected to have a positive impact on the GDP and the income of graduates through job creation and the improvement of the quality of

2 life in rural areas and encouraging urban-rural migration and discouraging the graduates from participating in the conflict areas and empowering rural communities, for all these reasons the involvement of the DMF is justifiable. For the continuity of this important project which enjoys high priority , the foreign exchange part for the three remaining years is expected to be Contributed by the DMF so as to enable the Fund to accelerate its operations and achieve the objectives

2. Project Description: a) Project Development Objectives and Key Performance

The Strategic Objective of the Project: Participate in solving the problem of unemployment by creating job opportunities for the graduates through securing financing their projects, absorption in social and economic development activities and provide them with training to aquire skills necessary for available jobs. The targeted group is the graduates during the period 1995-2004. Medium Term Program for the Years (2005-2008): General objectives:- Development of the basic database through collection from census, studies, surveys and reports. Retraining for securing the right skills for the available job opportunities in the market. Remedial activities through campaigns for promoting the culture of free jobs in the societies using the available media, visual aids etc… Strengthening and developing small enterprises and enhance their impact on beneficiaries. Creation of large productive projects funded through joint venture and different external resources. Review and work for the issue of new legislation that will lead to greater graduate employment opportunities. Development of free-job culture among graduates ,enlarge production base and improve the living conditions of the graduates and their families. B) Quantitative objectives: - The total number of graduates during the period 1995-2008 that will be seeking jobs is expected to be around (457000) graduates. The (2005-2008) medium range program aims at the recruitment of 297,050 graduates (i.e. 65% of the total) distributed as follows: - 35% direct recruitment by (Government, Private sector and Emigration). 15% In the National projects. 20% Retraining. 25% Medium size and small size projects. 5% Large projects. The year 2005 witnessed the completion of the institutional and legislative aspects of the project and work in the execution of the graduates projects from the Graduates Portfolio and co-ordination works and recruitment in the public

3 and private sectors training for the graduates to manage their projects and recruitment in national projects. Achievement can be measured by comparing actual employment and training of graduates realized with the targeted figures in the program. b) Project Components

1) Project Management This component is related to the activities of the project management to influence on the macro-level the general economic and educational policies to create productive employment opportunities and to assure consistency in the light of the needs of the economy. This will require the following: Building a data base for planning and studies by the Statistics and Research Section including data on higher education output, unemployment and job opportunities. Workshops and co-ordination meetings A campaign through media to change the attitudes of the graduates in order not to confine themselves to paid jobs only. Seek financial support for the project Training the staff of the project management Supervise approved sub-projects and transformational training Site visits for follow up of projects all over the Country

2) Direct Employment This component targets 55982 graduates distributed as follows: Direct recruitment by the Government 15%% The private sector 16.5% The Informal sector 3.5%

3) Jobs in the National Projects This component targets about 23992 graduates to work on national projects such as illiteracy, malaria and social awareness campaigns. Co-ordination with relevant authorities, planning and training of trainers started but funds are needed for launching the campaigns. 4) Small and medium size projects. This component is expected to adsorb about 31190 graduates in the small scale projects initiated by the graduates at the local community level to address their local needs. 5) Large projects This component is expected to adsorb about 8000 graduates. The large projects envisaged include services centers, Production cities, agricultural production companies, etc. 6) Retraining The training aspect will cover 91400 graduates during the period 2005-2008 Around 31190 graduates will be trained to manage their own projects

4 Training will also be provided for those working on national projects and the staff of the Funds administration and its branches in the states. The transformational training will provide the graduates with the skills necessary to compete for available jobs in the market.

5 b) Project costs by components (in SD. Millions)

2006 2007 2008 Total 3 years Recruitment in National Projects 2124 2268 2358 6750 Project Financing (Grouped) 18425 20075 21422.5 59922.5 Reraining 1038.4 1108.8 1152.8 3300 The administration 75.2 70.1 70.1 215.4 ------Total cost 21662.6 23521.9 25003.4 70187.9

Total cost for the period 2006-2008 in U.S.$ (one $=220 SD)

=319.035. U.S.$

The total number targeted for training and recruitment during the period of the three years is 243750 graduates.

c- Project cost by source: Local and foreign

Foreign financing from donors and credit:-

-2006:- 5,415,635,000 SD = 9.846.609 U.S.$ -2007:- 5,880,485,000 SD = 34.114.434 U.S.$ -2008:- 6,250,860,000 SD = 35.797.957 U.S.$ ------Total =17546980000 SD =79.759.000 U.S.$ Thus the total amount needed from foreign sources during the three years is the equivalent of about 79.8 million U.S .$ , 30 % of which is required from Sudan Multi -Donor Trust Fund as follows :

- 2006 : 2.953.983 U.S $ - 2007 : 10.234.330 U.S $ - 2008 : 10.739.387 U.S $ ……………………. Total: 23.927.700 U.S $ Thus the total amount excepted from the TMDTF is twenty three million nine twenty seven thousand and seven hundred U.S $

6 3) Implementation :- a) Institutional and Implementation arrangement :

The Graduates Employment Fund is a body responsible for the implementation of projects, with headquarters at Khartoum and 22 offices in the states. The Director General is working under a Ministerial High Committee headed by the minister of the Ministry of Social Welfare, Women and Child Affairs. The Fund enjoys a degree of financial and administrative autonomy that facilitate the realization of it objective and provide flexibility and avoid red tape. 1. Creation of models of small projects to reinforce the concept of free-job and promote the market culture 2 . To concentrate on the collective projects to achieve the following:- * Providing job opportunities for graduates and others. * Getting communal governmental support. * Selection of sound projects. * To provide financing through the Graduates portfolio after being approved by the relevant committee in the state. * Selection of the best available investment opportunities that serve larger sectors. *Getting communal governmental support. * Selection of sound projects. * To provide financing through the Graduates Portfolio after being approved by The state committee.

* For providing financing the group must register under a business name so as to have legal status as one of the pre-conditions.. All graduates with approved projects are obliged to undergo the training course of "How to begin your project". Nominating a director for the project. He should not be a share-holder. A Feasibility study for the project is obligatory and has to prove to be both technically and financially viable. Its most important criterion is to provide job opportunities with reasonable salaries for share holders. Planning for transformational training is done by the Training Department of the Fund and executed by Consultants selected on competitive basis. 8. Co-ordinate work regarding the placement of unemployed graduates in public projects.(e.g. illiteracy campaign etc) b)Procurement arrangement: All procurement will be based on open competitive basis according to the government regulations and donors’ procurement procedures in tendering, evaluation and signing of contracts for the supply of goods or services The Fund follows clearly the financial regulations of the government and has its internal accounting unit and is subject to auditing by the General Auditor. Presently the Fund is securing goods and services the open competitive bidding. For the components of the project that will be financed from foreign sources, the Fund will follow closely the procurement guidelines of the organization concerned.

7 c) Financial Management Arrangements:

GEF administration follows the regulation of the government on budget disbursement and record keeping for funds allocated by the donors and other external sources. The accounting unit of the Fund will follow the processes and guidelines of the donors and will keep a special account to manage in accordance with the regulations of the donors. Accounts will be kept in the light of the above and subject to auditing. The Fund has its own internal accounting unit. The accounts will be open to the donors review whenever required. d) Monitoring and Reporting:

There is a system which is adopted by the general administration in following up the progress of the work. Quarterly reports are prepared every three months. The staff of the Fund makes periodically visits to the states to assess the progress of the projects and to resolve any problems that confront the graduates. Meetings are held periodically in certain topics and issues facing performance. In addition there is the annual meeting of the higher committee and central and at the level of the states and the centre. The Savings and Social Bank is managing the graduate portfolio and prepares periodical reports on their activities. The project and financial departments of the Fund prepare regular reports on the progress of the projects and the problems if any. Remedial measures are taken immediately to resolve problems and overcome obstacles. e) Sustainability and Critical risk : Sustainability elements: Selection of the best available investment opportunity. Availability of financing from the “Graduate Portfolio” A pre-requisite that a Feasibility study to prove that the project is both technically and financially sound. Training in formulating and management of the project precedes execution. Support of the government and society. The guarantee by the government of the banks shares in the Graduate Portfolio. Providing technical support for projects. Internal controlling (financial, working condition etc). Continuous follow-up and assessment. Providing minor investor's series: 1. Graduate directory for minor and medium projects funding. 2. Graduate projects fund. 3. How to make technical and economical feasibility study for projects. 4. Projects bank.

8 Critical Risks: 5. Lack of infrastructure in rural areas. 6. Lack of services in rural areas. 7. The graduates prefer paid jobs and not free business. 8. The shortages of paid jobs in the public sector. 9. The ever increasing number of higher education graduates and the mismatch with job opportunities. 10.The Influx of foreign Labour 11.Uncontrollable factors (e.g. No sufficient rainfall) 4) Social Issues: The growing number of unemployment among graduates at an alarming rate lead to the present social problems and frustration of the graduates and disappointment of their families who invested on their education/ Most of those graduates and their families are living below poverty line. Such situation has its potential repercussions on the economic and social life and may lead to social upheavals. Unemployed graduates can easily be tempted to join the fighting parties in conflict areas, and as consequence will affect negatively the process of peace building. Many social evils are the outcome of unemployment which will disturb social harmony and leads to criminal behavior. The frustration resulting from unemployment will endanger social and political stability and economic growth. The project targets 65% of the unemployed and those who will graduate up to the period 2008 through providing financing to the graduates projects and through training and other means and policies with no discrimination on religious, racial or political affiliation. The expected result from implementing such project is to increase production and create productive job opportunities to the graduates which will help in the reduction of poverty, defuse frustration and tensions and can help in realizing the declared motto of “an opportunity for free job and decent work to attain the society of sufficiency, justice and equality”.

6) Environmental issues:

The project considers and respects all the government regulations and international agreement in the areas of the environment. With the above in mind, the process of the graduate’s projects includes a part on the projects impact on the environment. No project will be approved if it has any damaging effect on the environment. Large projects need to provide in their design the safeguards relating to environment. Many of the small projects to be implemented by the graduates will have a positive effect on the environment especially those in agriculture and

9 forestation. Use of organic fertilizers will be encouraged. Recycling small projects (e.g. plastic) will also have a positive effect on the environment. The employment of graduates in the national projects as the awareness and illiteracy eradication and malaria campaigns will help in a positive way in the protection of the environment and will contribute also towards teaching the people how to protect and improve their physical and social environment.

10 Annexes 1- Detailed Implementation Arrangements: The organization of the Graduate Portfolio is composed of the Council of shareholders including Governor of the Bank of Sudan, the undersecretary of the ministry of finance The Secretary General of the Graduate Employment Fund and the participating banks (General Committee) for policies and an Executive Council for the execution of the policies. The custody and management of the Portfolio is with the Bank of Savings and Social Development and at the states level there are Project Committees to help in project preparation and the financial intermediary units which work under the supervision of the bank of savings in co-ordination with the state and the Graduate Employment Fund in the state. The legal institutional arrangements for setting up the Graduate Employment Fund has been completed and the institution has already started its activities. Special fund for graduate projects composed by saving and social development bank as a pioneer, together with the contribution of the commercial banks working in Sudan; its resources are 5% of banks funding ceiling. Methods: First stage: Creation of models of pioneer projects to reinforce the concept of free-job and promote the market culture. To concentrate on the collective projects to achieve the following:- Providing job opportunities for graduates and others.. Selection of the best available investment opportunities that serve larger sectors. Getting communal governmental support. Easy to evaluate; follow-up and assess which ensure its success. Availability of the financial blanket which increases the ability to compete with other projects and face the changes. Minor projects legal form stands on legal sharing registered under a business name. All admitted graduates are obliged to undergo the training course of "How to begin your project". Nominating a director for the project; he should not be a share holders. Feasibility study for the project and its most important selection criterion is to provide job opportunities with sufficient income for share holders. (i.e. with technical, financial and economic viability) Second stage (spreading stage 2005 -2008) The new basic system of the fund has been signed and according its mechanisms has been expanded to face the development of the project according to the new system the share holdings council includes: the governor of Sudan bank; representative of ministry of finance, the general secretary of the projects secretariat. The implementation council of the fund includes: Bank of Sudan representative, ministry of finance representative, all directors, of agricultural bank, bank of Khartoum, in addition to saving and social development bank as a pioneer. The implementation mechanisms have been expanded through banking implementation mediums and non-banking organizations.

11 The Fund is planning to provide funding for 114250 graduates during the four years of the program. Regarding the other activities for the realization of the components of the project, the Fund with its four departments and the twenty offices in the states all over the country has already started the preparatory activities in the area of policy co-ordination, training, and inspection visits to assess performance in the implementation of approved projects and resolving any problems that may arise.

12 2- project costs: For the year 2006 Number of Cost in SD Percentage graduates (000) ------Recruitment in National Projects 17700 2124000 10% Project Financing (Grouped) 35400 18425000 85% Retraining 23600 1038400 4.7% The administration ------75141 0.3% ------Total cost 76700 21662541 100%

For the year 2007

Recruitment in National Projects 18900 2268000 10% Project Financing (Grouped) 37800 20075000 85% Retraining 25200 1108800 4.7% The administration ----- 70141 0.3% ------Total cost 81900 23521941 100%

For the year 2008

Recruitment in National projects 19650 2358000 10% Project Financing (Grouped) 39300 21422500 85% Retraining 26200 1152800 4.7% The administration ----- 70141 0.3% ------Total cost 85150 25003441 100%

Foreign financing and Credit:- -2006:- 5,415,635,000 SD -2007:-5,880,485,000 SD -2008:-6,250,860,000 SD Local:- (in 000 SD) 2006 Governmental finance:- 8,665,016 SD Banks:- 5,415,635 SD Private sector and Organizations:- 2,166,254 SD 2007:- Ministry of finance 9,408,776 SD Banks : 5,880,485 SD Private sector Organizations: 2,352,194 SD 2008 Ministry of finance 10,001,376 SD Banks : 6,250,860 SD -Private sector and Organizations : 2,500,344 SD

13 3-Initial Implementation Plan

The program has already started in 2005. The institutional arrangements were completed and the Fund with its relevant department started its activities at the headquarter and 22 regional offices in the states. The following four tracks were followed to realize the objectives.  to influence policies  to provide financing for small and medium size projects from the “graduate portfolio”  to conduct retraining  adsorption in national projects The Fund succeeded in influencing policies in favour of unemployed graduates and the government adopting unemployment as the declared policy in addition to the review of the educational policies and foreign labour legislation. Financing has been extended to 273 projects mainly in the states from the graduate’s portfolio absorbing 2069 graduates. The participants in the Graduates Portfolio made the contributions shown on the table below: Status of Fund shareholdings till 20.7.2005 SD 1 Bank of Sudan 345.000.000 2 Saving and social development bank 100.000.000 3 Financial investment bank 10.000.000 4 Sudanese French bank 30.000.000 5 Farmer's commercial bank 25.000.000 6 Live stock bank 25.000.000 7 Agricultural commercial bank 15.000.000 8 Bank of Khartoum 100.000.000 9 Nilain bank 50.000.000 10 General Secretariat Graduates project. 442.500.000 Total 1.142.500.000

The actual amount actually disbursed or committed for graduates projects up to30 November 2005 is 1223179706 SD. i.e. a deficit of 80679706 SD. Contacts are being made by the Fund with additional banks to participate in the portfolio in line with the policies of the Bank of Khartoum. The contributions of the banks are guaranteed by the Government. A number of Consultancies were invited to make offers for undertaking transformational training in areas identified by the fund through the survey of 250 firms. The proposals were received and evaluation is completed and waiting now for funds for the start of the retraining. In the National projects13000 jobs were secured for the graduates in the public sector and 3500 in the illiteracy campaign in co-ordination with the ministry of education and national service, a plan is under preparation for the

14 training and recruitment of graduates in Malaria and social awareness campaigns. Since the institutional set -up is made and the core staff recruited and the operations already started and plans are prepared, the Fund can - on receipt of Funds- proceed along the four tracks at a fast

4. Initial Procurement Plan

In the area of the small and medium size projects, the graduates present their feasibility study to the state project committee and on a approval and meeting all the conditions it is presented for financing from the portfolio. Procurement is in accordance with the procedures adopted by the banks and stipulated in the contract with the graduates. Performa invoices and execution proposals are required. As far as the other tracks of the activities of the Fund are concerned, the requirements of the project for commodities or services will be decided according to the sources of financing. For the government financing the Fund will continue following the government regulations on purchases as the case now. For the part receiving foreign financing the Fund will follow the regulations of the donors which normally follow open tendering procedures, or local tendering or shortlists of suppliers of goods or services or direct ordering from the supplier when there is only one manufacturer. The Fund under all circumstances will follow closely the donor’s procurement guidelines. The Fund will seek the approval of MDTF for subsequent procurement activities or change in procurement methods.

5. Detailed Financial Management Arrangements

For the Graduates Portfolio the new basic system for the management of the fund has been signed and according to its mechanisms have been expanded to face the development of the project . The shareholdings Council includes: the Governor of Sudan bank; representative of the ministry of finance, the General Secretary of the Projects Secretariat. The Implementation Council of the Fund includes: Bank of Sudan representative, Ministry of Finance representative, all directors, of agricultural bank, bank of Khartoum, in addition to Saving and Social Development bank as administrator of the Portfolio. The implementation mechanisms have been expanded through banking implementation mediums and non-banking organizations. The above relates to the graduates projects financed out of the portfolio. As for the other activities, one of the six departments is concerned with the accounts and book keeping of the project within the regulations of the government. The financial department is responsible for the management of financing the activities of the project and its administration. Under the supervision of the Secretary General the Controller of accounts assisted by an accountant and an administrative office prepare the budgets of the administration and its activities. After approval the department follow the procurement procedures and rules for

15 obtaining goods and services. The necessary documentation is followed and the books reflect the expenditure and amounts received to the credit of the Fund. The financial situation is reviewed periodically. The books are open to the subject to auditing by the Auditor General. When funds of foreign source are received then special accounts will be opened to reflect the movement of the account (i.e. payments and expenditure with the proper documentation.

6. Economic and Financial Analysis General Objectives:-

 Development of the basic data base by studies and statistics according to different surveys.  Abilities informant by adopting plans of transformational trainings in addition to site visits to have a close in sight.  Remedial work for the roots of the problem by an approach aiming at promoting the culture of free-job in the society using media and visual aids.  Re-inforce and develop minor enterprises and expand their beneficiaries.  Creation of greater productive projects funded by a sharing system and different external funding gates.  To review and influence legislations supporting new job opportunities and graduate employment

B/ Quantitative Objectives:

The program aims during its four years at the recruitment of (297.050) graduates

The Fund started executing the program of the first year but was constrained with the late receipt of funds of limited funds.

The project is expected to contribute to the national income and to the incomes of the graduates. The graduate’s projects are going to be in the different sectors of the economy and will be based on feasibility studies reflecting technical viability, economic and financial justification and social acceptability. Since each project will be feasible, then the total sum of the projects will contribute positively towards the increase of the national income. The four tracks followed by the Fund will result in more job opportunities for the unemployed graduates. This is going to have a positive effect in poverty alleviation among the graduates and their families. Their projects will also lead to the creation of jobs directly or indirectly for other workers in production or related services. The job opportunities will mitigate the unemployment situation and the limit the chances of the use of unemployed graduates in conflict areas. Thus the economic, financial, social and political impact of the project and its direct and indirect positive effects are unquantifiable, but obvious.

16 7. Social and Environmental Safeguards Policies:

The nature of the present project which targets unemployed graduates is different from the Large National Projects which may trigger disputes or hazards. The element of training is an important and sizeable component and includes no hazards. The graduate’s projects are all subject to assessment of their impact on the environment as reflected in the guidelines for the preparation of the projects prepared by the Fund and made available to the graduates.

The projects to be prepared centrally by the Fund will observe the impact on environment consideration. The Fund will keep in mind the importance of the Natural Habitats, Pest Management, Forests Conservation, Cultural Property, Resettlements and the interest of the local communities in the sustainability of their environment.

In cases with doubtful results -if any-the Fund will consult and seek the approval of MDTF.