USAID BUREAU FOR HUMANITARIAN ASSISTANCE (BHA) SUDAN PRIVATE SECTOR LANDSCAPE ASSESSMENT (PSLA)

March 2021 This study is made possible by the support of the American people through the United States Agency for International Development (USAID.) Its contents are the sole responsibility of SSG Advisors, LLC d/b/a Resonance and do not necessarily reflect the views of USAID or the United States Government. It was produced in collaboration with the US Global Development Lab’s Center for Transformational Partnerships and the Bureau for Humanitarian Assistance. TABLE OF CONTENTS

Executive Summary 4 Introduction 7 1.1 Context and Background 7 1.2 Methodology 10 1.3 Limitations 14 2. Private Sector Landscape in Sudan 14 2.1 Overview of Business Enabling Environment and Private Sector Constraints 14 2.2 Characterization of the Private Sector in Sudan 16 2.3 State of Private Sector Engagement in Humanitarian Assistance 23 2.4 Common Themes and Cross-Cutting Findings in PSE 27 3. Opportunities and Recommendations 32 3.1 Ways of Working with the Private Sector 32 3.2 Opportunity for Ecosystem-focused Partnerships that Amplify Impact 34 3.3 Opportunities To Engage with the Private Sector 35 Annex 1: Private Sector Survey Analysis 39 Annex II: Sudan PSLA Contacts 39 Annex III: PSLA Interview Notes 39 Annex IV: Interview Guide 39

2 ACRONYMS

BHA USAID Bureau of Humanitarian Affairs (Formerly FFP and OFDA) COVID-19 2019 Novel Coronavirus or 2019-nCoV CRS Catholic Relief Services CSR Corporate Social Responsibility DO Development Objectives FAO Food and Agriculture Organization FDI Foreign Direct Investment GAM Global Acute Malnutrition GDP Gross Domestic Product HRP Sudan’s Humanitarian Response Plan ICT Information and Communications Technology IDP Internally Displaced Populations KIIs Key Informant Interviews MSMEs Micro, Small, and Medium-Sized Enterprises NCA Norwegian Church Aid NGOs Non-Governmental Organizations PEPSE Promoting Excellence in Private Sector Engagement (USAID project) PSE Private Sector Engagement PSLA Private Sector Landscape Assessment RISING Recovery in Sudan for Improved Nutrition and Growth project (USAID-funded) SDG Sudanese Pound SDGs United Nations Sustainable Development Goals SMEs Small and Medium Enterprises SOW Scope of Work SST State Sponsors of Terrorism UN United Nations UNICEF United Nations Children's Fund USAID United States Agency for International Development USD U.S. Dollar WASH Water, Sanitation and Hygiene WFP World Food Program WHO United Nations World Health Organization

3 Executive Summary The humanitarian and development communities are beginning to engage the private sector more effectively, recognizing the skills, networks, and expertise companies can bring to disaster responses. Simultaneously, business leaders are seeking ways to partner with the development community to channel their capabilities and resources toward sustainable development. Given these shifts, the US Agency for International Development (USAID) Bureau for Humanitarian Assistance (BHA) sought support from the Promoting Excellence in Private Sector Engagement (PEPSE) project to conduct a private sector landscape assessment (PSLA) in Sudan. The main objective of the PSLA was to gain an increased understanding of the private sector landscape in Sudan, as well as private sector perspectives on challenges and opportunities relevant to USAID/BHA’s objectives in Sudan. In completing this assessment, the PSLA team spoke with companies across industries, including agriculture, finance and banking, energy, transportation and logistics, consumer goods, and communications and Information and Communications Technology (ICT). In addition to virtual interviews, the team also designed and distributed a digital survey to collect feedback from additional companies within Sudan. Private Sector Landscape in Sudan The Sudanese private sector faces several political, regulatory, and institutional challenges to its business enabling environment. These include the lasting impacts the Sudanese Revolution had on businesses, particularly MSMEs, many of which did not recover from the resulting business interruptions. And while the United States has lifted most of its sanctions on Sudan, companies still feel its long-term effects. Other challenges include poor infrastructure, most notably the lack of access to energy, and recent business lockdowns due to COVID-19. The Sudanese private sector has historically been dominated by large family-owned conglomerates and public sector companies, a select few of which have thrived in recent years by taking advantage of the lack of competition due to US sanctions. The base of wealth and growth strategy for most of these conglomerates is agriculture. This includes scaling up and diversifying products by expanding their business to livestock, meat production, and processing. The PSLA team observed an increased reliance on the contract farming model for conglomerates to cope with increased demand for crops and limited access to developed agricultural land. Micro-, small, and medium-sized enterprises (MSMEs) in Sudan are more diversified than conglomerates, but also experience more vulnerability to disasters. The PSLA team learned that MSMEs suffer from governmental policies that have a bias towards conglomerates, limiting MSMEs’ access to finance and rendering them vulnerable to shocks and business interruptions. At the same time, opportunities for MSMEs in the technology and solar energy sectors are emerging, with little competition from major conglomerates. PSLA interviews also uncovered company relationships with and perceptions of the Government of Sudan. Despite overall positive responses regarding the transitional government, companies argue the government needs a clearer framework to facilitate private sector development and business enabling environment. Some of the private sector’s primary complaints about the Government of Sudan include the failure to provide foreign currency through the banking system, unclear and unstable trade policies, land ownership and tenure issues, and infrastructure issues.

4 When asked about areas the Government of Sudan could further address, the most universal request was stabilizing the economy and currency and improving the business enabling environment. Many conglomerates have had generally positive partnership experience with development partners, particularly in the agriculture and food security sector. While MSMEs have had less exposure to the humanitarian and development communities, they understand the opportunities for collaboration that could contribute to Sudan’s long-term development but also support their business growth. Private sector interviewees responded with openness to the idea of partnering with USAID/BHA, due in large part to the private sector’s familiarity with humanitarian issues in Sudan and their willingness to advance common humanitarian and development goals. Sudanese companies are beginning to increase their focus on CSR efforts, which enables a platform for partnership with USAID/BHA. Common Themes and Cross-Cutting Findings in Private Sector Engagement (PSE) To gain a broad representation of the Sudanese private sector as it relates to potential humanitarian sector alignment, the PSLA team documented recurring feedback from interviewees related to the private sector’s relationship to and engagement with development initiatives and humanitarian assistance in Sudan, which is summarized below: ● Flooding is a primary disaster concern for the private sector, and many companies focus their CSR efforts on flood relief. ● The lack of energy access is a major barrier for reaching and developing remote areas. ● The lack of access to finance is a challenge for all sectors, but especially for small-scale farmers and MSMEs. ● The lack of access to skilled workers is a challenge for larger companies. ● A strong market push towards livestock presents a potential shift to future investment. ● Advancements in the technology sector create opportunities for innovative humanitarian solutions. ● A lack of sustainable storage infrastructure and warehousing is a major obstacle for supply chains.

Opportunities and Recommendations The PSLA highlighted several opportunities for both ways USAID/BHA can best approach the Sudanese private sector for potential partnership, as well as shared-value partnerships that advance the business goals of companies while also supporting USAID/BHA prioritized development objectives. These opportunities are summarized below. Ways of working with the private sector ● Build trust to develop partnerships. Try to understand the world views and motivations of the private sector. ● Find a common language. Establish an understanding of USAID/BHA’s mandate and objectives, ask questions when there is uncertainty, and explain partnership rationale. ● Include the private sector in the co-design process, either as a resource partner or as an implementing partner.

5 ● Set clear expectations and maintain transparency around timelines. Ensure clarity and transparency around processes, timelines, and contractual expectations. Short- and Medium-Term Opportunities ● Leverage RISING model to expand resilience. Build off the existing RISING partnership model to expand the humanitarian areas it covers. ● Support microfinance / agricultural finance. Facilitate the expansion of agricultural finance to rural and marginalized small-holder and contract farmers; encourage finance companies to meet the 12% legal microfinance requirement; connect finance companies with organizations that can help them understand needed financial products.

● Encourage energy access for remote areas. Deploy renewable energy solutions as part of humanitarian relief; work with renewable energy companies to identify the sector’s needs for expanding solar energy solutions; consider renewable energy as a complementary component of holistic solutions. ● Invest in innovation and technology. Work with startups and entrepreneurs to fund, design, and co-create innovative solutions for farmers and vulnerable populations. ● Resilient warehousing and sustainable housing. Support the capacity and reach of construction companies to provide sustainable warehousing and housing solutions for farmers and rural populations; leverage the interest of agriculture companies in building warehouses and storage facilities to partner on these initiatives; support farming cooperatives to communally store their grain and other products for purchase. ● Support the shift to livestock. Expand the market push towards the cattle and poultry value chains by encouraging conglomerates to apply the contract farming model to livestock; explore the hyde and leather value chains; consider support through ecosystem- focused partnerships that also address market strengthening, finance, training, etc.

6 Introduction 1.1 Context and Background 1.1.1 Purpose of the Private Sector Landscape Assessment To address both immediate humanitarian challenges and longer-term development investments, the changing humanitarian and development landscape and the complex needs of vulnerable populations require integrated interventions. While the humanitarian community has traditionally seen the private sector as donors or suppliers of goods and services to aid agencies and governments in humanitarian response, they are increasingly viewing companies as critical strategic partners. The humanitarian and development community are beginning to more effectively engage the private sector and recognize that the skills, networks, and expertise of companies can build stronger resilience to disasters and more efficient responses. Simultaneously, business leaders are seeking ways to partner with the development community in systematic and strategic ways to channel their capabilities and resources toward longer-term sustainable development. Given these shifts, the US Agency for International Development Bureau for Humanitarian Assistance sought support from PEPSE project to conduct a PSLA in Sudan. The PSLA aimed to identify areas of aligned interest and opportunity for collaboration between BHA and companies operating in Sudan to create more resilient, sustainable, and inclusive humanitarian assistance and development programs. Based on findings from desk research, interviews with humanitarian actors, and interviews with private sector actors in Sudan, this PSLA identifies the range of relevant private sector actors, summarizes PSE activities implemented to-date, and provides recommendations for shared-value opportunities between the private sector and USAID that will enhance the impact and sustainability of USAID activities in Sudan. The PSLA focuses particularly on short-term and resilience-building opportunities that USAID/BHA can pursue through partnering with the private sector. The PSLA aims to help USAID: ● Gain an increased understanding of the current private sector landscape in Sudan, as well as private sector perspectives on business challenges and opportunities relevant to USAID/BHA’s objectives in Sudan, including an understanding of Corporate Social Responsibility (CSR) in Sudan; ● Summarize previous PSE activities in the humanitarian sector in Sudan and any related lessons learned that would strengthen USAID/BHA programming; ● Identify areas of alignment between private sector (e.g., business interests, priorities, key risks) and USAID/BHA priorities that could present a basis for future collaboration or engagement, including those that advance USAID/BHA’s humanitarian objectives, USAID’s development objectives (DOs), and leverage the efforts of private sector actors. 1.1.2 Context: Humanitarian Needs and Assistance Over the last three decades, Sudan has simultaneously experienced deep economic crises, rampant violent conflicts, large waves of displacement, and environmental disasters that have resulted in high food insecurity and low access to basic services. According to Sudan’s Humanitarian Response Plan (HRP), approximately 9.6 million people in 2020, a 9% increase

7 compared to 2019, will require humanitarian assistance; 6.2 million people are in need of food security and livelihoods assistance; and 3.3 million people need nutrition assistance.1 The country’s history of conflict and environmental disasters has resulted in large waves of population displacements, negatively affecting households’ livelihoods in the long term. Sudan continues to cope with the effects of protracted conflict, economic shocks, and recurrent environmental hazards, such as drought and flooding, resulting in a need for humanitarian assistance. This has also resulted in the displacement of roughly 1.9 million people across Sudan since 2003. This includes 1.7 million internally displaced persons (IDPs) in Darfur, 235,000 IDPs in the government-controlled parts of the “Two Areas” of South Kordofan and Blue Nile states, and up to 545,000 IDPs residing in parts of the “Two Areas” not controlled by the government. Across Sudan, people lack basic services, and natural disasters, like floods, affect people each year. The country also hosts nearly 1.1 million refugees including over 823,000 South Sudanese refugees, many of whom rely on food assistance.2 More recently, over 40,000 Ethiopian refugees have crossed into Sudan since the conflict in the Tigray region broke out in November, overstretching the already challenged humanitarian response.3 The UN Refugee Agency reports limited shelter capacity to meet the growing needs, and aid agencies are preparing for 200,000 more people who will need food, water and shelter. 4 Ongoing conflict, protracted displacement, and climatic events have exacerbated vulnerabilities and resulted in accrued needs related to water, sanitation, and hygiene (WASH) services, housing, and food security. Only a third of households in Sudan have access to proper sanitation, while about 68 percent of households have access to improved drinking water sources. Further, according to the United Nations (UN), in 2020, approximately 3.3 million people in Sudan require nutrition assistance. Seventy Localities in nine states are experiencing global acute malnutrition (GAM) rates above the UN World Health Organization (WHO) emergency threshold of 15 percent, while the nationwide GAM prevalence is greater than 14 percent.5 Overall, approximately 2.7 million children ages five years and younger are acutely malnourished, including 522,000 children suffering from severe acute malnutrition (SAM), with persistent food insecurity, conflict, displacement, poor hygiene practices, limited access to basic services, and disease contributing to high malnutrition rates. Finally, both the deepening economic crisis and the COVID-19 pandemic have worsened the situation and increased the need for humanitarian and development assistance. Following years of stagnation and insufficient investment in public services, the deepening economic crisis in Sudan is progressively increasing food insecurity, deteriorating healthcare, and stymying economic growth. 6 Poor economic conditions, characterized by elevated food and fuel prices, cash shortages, and high inflation rates, continue to worsen vulnerabilities and constrain household’s capacity to purchase food and other essential items. While trying to tackle the country’s many

1 https://www.usaid.gov/sudan/food-assistance 2 https://www.usaid.gov/sudan/food-assistance 3https://www.unhcr.org/en-us/news/briefing/2020/11/5fbcccbf4/ethiopian-refugee-numbers-sudan-cross-40000- mark.html 4 https://www.wsj.com/articles/ethiopia-what-we-know-about-the-war-in-the-tigray-region-11605530560 5 https://www.usaid.gov/sudan/food-assistance 6 https://reliefweb.int/report/sudan/sudan-humanitarian-needs-overview-2020-january-2020

8 challenges, the Government of Sudan and private sector companies are facing hurdles importing sufficient essential food items, further restricting households’ ability to purchase adequate food. 7 Furthermore, restrictions on movement and economic activities due to COVID-19 are exacerbating the macroeconomic crisis and reducing income-earning opportunities, particularly for poor urban and peri-urban households dependent on wage labor and petty trade. COVID-19 containment measures could also reduce market access, limiting income for farmers, pastoral communities, and exporters.8 The COVID-19 pandemic disproportionately affected MSMEs in Sudan. In April 2020, data collected from 135 MSMEs by 249 Startups, an incubation hub operating in Sudan, found that the pandemic affected the operations of all enterprises surveyed, with 19.7 percent reporting bankruptcy and 47.3 percent expected to close if the situation remains unchanged. 9 Many MSMEs reported an inability to continue their operations online (47.1%), while others (31.4%) reported halting operations altogether. For MSMEs in Sudan, the pandemic comprised their ability to meet salary obligations, as 50 percent of those surveyed reported they cannot continue to pay their employees’ salaries, and others (41.9%) said they were unable to provide a safe working environment for their employees. 10 Ultimately, 249 Startups established that the pandemic exacerbated challenges already felt by MSMEs in Sudan, specifically depressed demand, and low earnings. 11 1.1.3 Context: USAID/Sudan Programming and Priorities USAID, through USAID/BHA, is addressing the acute and protracted needs of conflict-affected populations in Sudan by prioritizing integrated activities in food security and nutrition, health, and WASH. Through its programming, USAID/BHA supports relief and resilience interventions to reduce food security among vulnerable populations and help build resilient communities facing conflict, chronic poverty, and current disasters, such as drought. USAID/Sudan’s portfolio includes a hybrid of humanitarian and development activities, including activities in agriculture, food security and nutrition, health, WASH, shelter, economic recovery, and market systems, as well as humanitarian coordination and information management, logistics support, and the provision of non-food commodities. 12 Further, USAID/Sudan is currently developing a high-level Strategic Framework with three Development Objectives to prioritize coordinated interventions in Sudan that leverage past lessons and successes in humanitarian assistance in the transition to long-term resilience building and sustainable development. While in draft form, the goals and priorities of each DO are described below:

7 https://www.wfp.org/countries/sudan 8 https://www.usaid.gov/sudan/food-assistance 9 Survey Report, 249 Startups https://drive.google.com/file/d/1Yq0NiJPwMW2hSeabL5lycx95SZo- cjY_/view?usp=sharing 10 Impact of covid-19 on MSMEs in Sudan https://drive.google.com/file/d/16mUusYCOEN8GiKyJPYEAQb_T5XwabQzJ/view?usp=sharing 11 Survey Report, 249 Startups https://drive.google.com/file/d/1Yq0NiJPwMW2hSeabL5lycx95SZo- cjY_/view?usp=sharing 12 https://www.usaid.gov/sudan/working-crises-and-conflict

9 USAID/Sudan Focus and Priorities Development Objective

DO 1 Civil society; elections; creating a national identify that will inspire a civilian-led democratic government.

DO 2 Building the resilience of vulnerable populations to shocks (through increased household food security, increased adoption and maintenance of shock resilient livelihoods, reduction of barriers to social services).

DO 3 Promotion of inclusive economic growth (with an emphasis on the adoption of better pro-investment policies and improvements in agricultural production and market systems that generate income and opportunity, especially for women, as well as the expansion of private sector investment).

As part of its effort to align recommendations closely to the wider USAID/Sudan Mission development goals and priorities, the PSLA team took a broad sectoral view by speaking with a range of private sector actors, including agriculture, transportation and logistics, finance, technology, communication, and other relevant sectors as determined by desk research and initial interviews. 1.2 Methodology The PSLA team used a phased approach to understand the identified PSE priorities and opportunities for USAID/BHA in Sudan. For the Sudan PSLA specifically, and based on guidance from the USAID/BHA Sudan team, the PSLA team focused on obtaining an increased understanding of the overall private sector landscape in Sudan, while collecting information on the general interests and capabilities of private sector actors across sectors in order to find areas of alignment between private sector and USAID/BHA priorities.

Resource Number Reviewed

Public Sector Interviews 14 (USAID, USAID/BHA, Implementing partners)

Private Sector Interviews 18 (Large, Multinational, Conglomerate)

Private Sector Interviews 6 (MSMEs)

Digital Survey 24

10 1.2.1 PSLA Design The PSLA team and USAID/BHA co-created the focus and objectives of the PSLA through an introductory kick-off meeting (conducted on July 7, 2020) and subsequent conversations with USAID/BHA stakeholders based in Washington, D.C. and Sudan. Together, they designed the PSLA context, objectives, implementation plan, deliverables, team composition, and timeline. USAID/BHA approved the final PSLA Scope of Work (SOW) on September 14, 2020.

1.2.2 Stakeholder Identification The PSLA focused on a range of sectors within the Sudanese economy including agribusiness, technology and telecommunications, energy, consumer goods, transport and logistics, and finance and banking. Applying this broad sectoral lens helped to better understand the Sudanese private sector landscape. The team identified private and non-private sector stakeholders through a combination of recommendations provided by USAID/BHA, the USAID/Sudan team, contacts from the PSLA team’s network and desk research efforts. Using this information, the PSLA team identified over 70 contacts from a multitude of sectors, with a goal of including at least two contacts in the MSME category as well as the large, conglomerate, and multinational category. From there, the team ranked each contact to identify the preferred stakeholders for Key Informant Interviews (KIIs). 1.2.3 Desk Research and Remote USAID/BHA and Development Partner Interviews The PSLA team conducted an internal (e.g., USAID/BHA-material) and external (e.g., non- USAID/BHA material) desk review to gain baseline information on PSE within humanitarian assistance in Sudan as well as to better understand areas where USAID/BHA and the private sector have collaborated. The goal of this desk review was to summarize lessons learned and identify replicable models and activities that may be enhanced or leveraged in future development programming. This included research on the overall business environment and Sudan’s political economy and private sector environment. In conjunction with this desk research, the PSLA team conducted 14 semi-structured phone/web-based interviews with different USAID and USAID/BHA offices, implementing partners, and other external stakeholders in Washington, D.C. and Sudan. These initial interviews focused on eliciting nuanced feedback and input on USAID/BHA’s PSE activities to-date and exploring areas with the greatest opportunities for future engagement. Based on these initial interviews, the PSLA Team held a virtual “in-brief” with USAID/BHA on October 27, 2020 to present desk research findings, early hypotheses to test during private sector interviews, private sector outreach progress, and planned future interviews. The team collected and incorporated USAID/BHA’s feedback from the in-brief presentation into the private sector interview plan and guide. 1.2.4 Remote Private Sector Interviews As part of its private sector outreach and in collaboration with USAID/BHA, the team created a list of over 70 Private Sector contacts, out of which 48 were shortlisted for interviews and half of which accepted interview invitations. The PSLA team met with six representatives from MSMEs, and 18 from large, conglomerate, or regional enterprises within the agribusiness,

11 technology and communications, energy, consumer goods, transportation and logistics, finance and banking, and pharmaceutical sectors. In addition to virtual interviews, the team also designed and distributed a digital survey to collect feedback from additional companies within Sudan as described in the section below. The PSLA team was able to interview more companies in the large, conglomerate, and regional category than those in the MSME category. This was in part due to fewer MSMEs in general, e.g., the PSLA team did not have access to MSME contacts in the agribusiness and consumer goods sectors where the market is filled with large players. In order to address this gap in interviews, the digital survey was forwarded to multiple associations and hubs who have strong connections with MSMEs. The PSLA team used the interviews to understand the private sector landscape in Sudan and determine the company’s ability and willingness to engage with USAID/BHA and to identify areas of alignment. The questions in the interviews centered around understanding each company’s core business and reach, their experience with development partnerships and humanitarian assistance, and models of effective engagement between the private sector and USAID/BHA. See Annex IV for the interview questions. 1.2.5 Digital Survey The PSLA team used SurveyMonkey to augment data collection among private sector companies in Sudan, using an Arabic and an English language survey distributed via email as well as LinkedIn posts. The survey included questions on the private sector’s activities, feedback, and interests, and thereby gauged alignment to USAID/BHA’s interests. The survey included 19 questions total, with two preliminary questions to target the correct demographic, four business characterization questions, and six multiple selection questions that focused on interests and alignment content. An additional eight open ended questions, of which four were optional, asked for descriptions, feedback, and suggestions to follow up on their multiple selection answer choices. The team analyzed the business characteristics questions using descriptive statistics; business size and sector were used to disaggregate answers on the remainder of the survey. The team used frequency and other descriptive statistics to analyze the multiple selection questions and utilized content analysis for the open-ended questions. Answers were coded, tallied and analyzed based on frequency to draw conclusions. See Annex I for a full description of survey questions and methodology. The majority of respondents’ business size is under 30 employees (60%), corresponding to the “micro” enterprise in our analysis. Small (13%) and Medium Enterprises (3%), those with 31 to 100 and 101 to 249 employees are the smallest groups represented in the survey and are frequently combined for results and analysis. Large enterprises, those businesses with more than 250 employees, make up 23 percent of the respondents.

12 Most survey respondents were General Managers (37%) and CEOs (37%). Agribusiness, Consumer Goods and Service Sectors were the most frequent respondents, and Pharmaceuticals, Finance, and Associations were the least represented respondents. A handful of respondents selected multiple industries to represent their business; these mainly overlapped in Agribusiness, Consumer Goods, and Logistics and Transport.

1.2.6 Analysis and Recommendation Development Throughout the interview period, the team held brainstorming sessions to summarize and pull out key themes. After completion of the private sector interviews and survey data collection, the PSLA team reviewed and analyzed interview notes and survey data to identify key themes and initial recommendations. The PSLA team conducted a mid-point findings presentation with

USAID/BHA and others within USAID on December 17, 2020 to share analysis and initial observations from the PSLA’s interviews. The information collected from the survey, interview

13 notes, briefings, and interview debrief meetings were used to develop the recommendations referenced later in the report (see Section 3. Opportunities and Recommendations). 1.3 Limitations It is important to note that the PSLA team recorded the perceptions of the targeted sector representatives and this report represents the aggregated opinions of the interviewees. Their insights and suggestions informed PSE recommendations but do not represent a complete stocktaking of the private sector in Sudan. Further, the private sector survey gathered responses from several company representatives, but many companies began the survey without completing it. This was likely because they felt they were not the correct representative to respond on behalf of their company. The PSLA is therefore designed to offer opportunities and recommendations for USAID/BHA to choose from and pursue but does not represent a list of planned programming for USAID/BHA to implement. USAID/BHA must use its discretion to determine which recommendations best fit its needs and goals in Sudan and are the most feasible to implement given resources available. USAID/BHA should hold additional and/or follow-up conversations with potential stakeholders to determine whether the opportunities are viable for both parties. This report aims to surface initial high-level opportunities for strategic private sector engagement. The PSLA does not further develop relationships with potential partners or implement PSE opportunities identified under the assessment. Additionally, while this PSLA broadly identifies targeted opportunities it does not provide in-depth market analysis around a targeted sector opportunity. A deeper market analysis, due diligence analysis, and risk assessment is necessary to provide comparisons between potential partner firms in the same sector or trade-offs with other engagement opportunities. Finally, PEPSE conducted this PSLA remotely due to travel restrictions resulting from the ongoing COVID-19 pandemic. This involved using online platforms such as Zoom, WhatsApp, Skype, and Google Meet to schedule and hold interviews with stakeholders remotely. The PSLA team exceeded its target number of KIIs despite this challenge. 2. Private Sector Landscape in Sudan 2.1 Overview of Business Enabling Environment and Private Sector Constraints The Sudanese private sector faces a number of political, regulatory, and institutional challenges that have stunted the country’s business enabling environment and hindered strong economic growth. The impact of the Sudanese Revolution and the transition from the Bashir regime created a prolonged and recurrent interruption for businesses, and had a significant impact on MSMEs, many of which never recovered. The quick restructuring of the government led to unclear division of responsibilities and roles between ministries and departments and concern among business leaders that further changes of cabinet members may affect their businesses. Furthermore, changes in trade laws and regulations (i.e., import-export laws) have led to massive losses for businesses as they lead to imported goods being abandoned at the ports. Although the United States has lifted most of its sanctions on Sudan and recently took Sudan off the list of “State Sponsors of Terrorism (SST),” the negative effects of these sanctions have had

14 lasting effects on Sudan’s economy. Under these sanctions, Sudan was unable to access multilateral lending or outside investment for its economy. Additionally, its SST status imposed restraints that shut out international banks and businesses from Khartoum, preventing Sudan from accessing international finance. The lifting of US sanctions and SST designation is expected to benefit Sudan’s economy in the long-term as it will enable Sudan to engage with the global economy, including through market and investment expansion, trade deals, and foreign investments. On the other hand, the peace agreement has opened areas in Sudan for investment, such as the Blue Nile State, South Kordofan, and Darfur (e.g., to agriculture, mining, and cross border trade). Sudan’s economic challenges also create enormous strain for companies, especially MSMEs and startups. High inflation rates and a lack of access to finance inhibits MSMEs’ growth; this is due in part to the fact that Sudan only has two small venture capital funds (Dawish Bros and ANAFI Capital Partners), and the banks’ limited financial instruments are best suited for large businesses. Volatile exchange rates are another challenge for MSMEs, which include multiple prices for the USD. There was a massive drop in the Sudanese Pound to USD exchange rate in 2020, which has led to businesses struggling to price products and caused imported goods to become too expensive for consumers to buy. This creates imbalances in the market as companies who import strategic commodities have better access to the foreign exchange market than other companies, such as MSMEs. The near-constant shortage of USD in Sudanese banks has led MSMEs and individuals to rely on black-market dealers and unofficial or illegal networks for access to competitive exchange rates. Poor infrastructure, most notably lack of access to energy, is another challenge to Sudan’s private sector. More than half of Sudan’s population is not part of the national energy grid, and those with access face frequent power supply interruptions. Most businesses, especially those outside of major urban areas, must rely on diesel generators to power their facilities and deal with frequent diesel shortages. The country’s logistics and supply chains also suffer from limited railway coverage, unpaved roads, frequent road blockages due to flooding, and insufficient port and airport capacity. Finally, the COVID-19 pandemic and subsequent business lockdowns have impacted most companies in Sudan, but severely affected MSMEs and startups that lacked business continuity plans or resources to remain open. Other businesses that did not have mobile solutions lost revenue from not pivoting to a remote, work-from-home platform. The charts below capture survey responses for the most significant challenges faced by large businesses and MSMEs, the results of which are consistent with findings from the interviews.13

13 Micro, Small, and Medium sized businesses described their most significant challenge to achieve their five-year Growth Plan like large businesses as Economic stability (61%, 75%, and 100%, respectively). Second most common is the Business Enabling Environment (56%, 75%, and 0% respectively), specifically the need for fair laws and policies that fairly governed all people and businesses. governance and peace (33%, 50%, and 100%, respectively), access to finance (44% micro, 25% small) education, as in human resources (28% micro) and infrastructure (22% micro) were included in their descriptions.

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2.2 Characterization of the Private Sector in Sudan 2.2.1 Sectors Overview In completing a broad analysis of Sudan’s private sector, the PSLA team spoke with a range of actors across industries, including agriculture, finance and banking, energy, transportation and logistics, consumer goods, and Information and Communications Technology. A brief overview of each of these sectors is outlined below. Agribusiness. Agriculture is the largest and among the fastest growing sectors in Sudan’s economy. Nearly one-third of the country’s gross domestic product (GDP) comes from agriculture, and more than one-third of the national workforce is engaged in agriculture and agro processing industries.14 Sudan has vast areas of cultivable land, with 63 percent of the country’s land area consisting of agricultural land suitable for crops and animals. Despite its prevalence of agricultural land and farming workforce, Sudan’s agricultural sector faces significant weaknesses that inhibit its growth. This includes low levels of crops, outdated natural resource policies, poor rural infrastructure, and weak agricultural research and extension services. Furthermore, the sector is dominated by large, family-owned conglomerates in Sudan, leaving little space for growth for small farmers. 15 Finance and Banking. Sudan’s financial sector is dominated by banks operating under Islamic banking laws. The Central Bank of Sudan and the government fully or partially own 41 percent of the country’s banks.16 Despite recent growth in the banking sector, Sudan’s population continues to be under-banked due in large part to a lack of financial inclusion (e.g., few banks in rural areas) to its rural population. Further, the sanctions imposed on Sudan continue to have lasting negative effects on its liquidity and exchange rates, and its previous presence on the list of “State Sponsors of Terrorism” made it difficult for the country to access international loans.

14 http://www.fao.org/3/a-i4786e.pdf 15 http://www.fao.org/3/a-i4786e.pdf 16 https://www.howwemadeitinafrica.com/the-financial-services-sector-in-sudan/61452/

16 Technology and Communications. The telecommunication (internet and airtime) sector in Sudan is dominated by large companies (e.g., Zain, MTN, Canar, and Sudatel). Most are foreign companies or multinationals, with the exception of Sudatel, which is the country’s only national telecom company. Despite the lasting effects of US sanctions and economic challenges, these companies have enjoyed relatively stable growth over the past few years. In addition to the traditional telecom business, Zain, MTN, and Sudatel ventured into mobile money, fintech, business mobility solutions, and experimenting in venture capital. Energy. Sudan is a net importer of energy, and the lack of foreign and domestic investments in the energy sector are likely to continue to strain the energy market. 17 Moreover, Sudan has severe electricity deficiency, especially among rural populations who are not connected to the national grid. Recent statistics show that less than half of the country’s rural population has access to electricity. 18 This has led to a drive towards expanding the renewable energy market to meet the country's energy demands. Transportation and Logistics. Despite the country’s increasing “The big conglomerates were strong emphasis on economic development, Sudan’s logistics and and sophisticated enough to work supply chain network is inefficient in meeting the country’s during the sanctions, which gave economic demands. Its challenges range from limited them more opportunities to operate railway coverage and paved roads, frequent infrastructural and grow.” - U.S. Sudan Business damage from rain and floods, and a limited port and airport Council (USSBC) capacity which cannot meet exporting needs. Conflict and security, especially near the border between Sudan and South Sudan, are primary concerns for transportation companies. The sector is experiencing an increased demand for river transportation, which is expected to continue should the borders between Sudan and South Sudan open and business needs expand. Representatives in the transportation sector see river transportation as an opportunity to facilitate economic growth and development in Sudan and South Sudan, thus improving the livelihoods of communities in both countries. Consumer Goods. The consumer goods sector in Sudan has significant room to develop. Aside from a few national conglomerates that sell agricultural products, the market is currently dominated by regional food retailers from neighboring countries like Kenya. Because of Sudan’s high poverty levels, consumers dedicate budgets towards food and other necessities, which dominate the country’s consumer goods market. 19 Even so, high staple food prices and low household purchasing power have led to an increased number of people in Sudan experiencing food insecurity or crisis. 2.2.2 Large Businesses and Conglomerates The Sudanese private sector landscape has always been dominated by large family-owned conglomerates and public sector companies. The conglomerate sector was arguably one of the strongest in the region during the 1920s. However, conglomerates suffered from shocks and setbacks at certain points in history which hindered their growth. For example, in 1974 the military regime of President Gaafer Elnumiery nationalized most of the country’s conglomerates

17 https://www.mordorintelligence.com/industry-reports/sudan-power-market 18 https://africa-energy-portal.org/country/sudan 19 https://www.tralac.org/images/docs/6113/fast-moving-consumer-goods-in-africa.pdf

17 for more than a year before reversing the decision. As a result, the landscape changed as some conglomerates left the Sudanese market, giving space to new capitalists. During the Omer Elbashir regime, the landscape shifted again to enable the Islamic regime's allies and armed forces to own businesses that maintained a significant share of the Sudanese market and received special treatment from the Government. This special status gave those companies disproportionately higher access to finance, government tenders, and tax and customs relief, which caused severe distortion of the market. Despite these setbacks, a few select family-owned conglomerates have continued to grow and thrive in recent years. In some circumstances, they have taken advantage of the lack of competition due to US sanctions to further expand and exert influence on the landscape. The base of wealth and capital for most of these conglomerates is agribusiness, but the aforementioned conditions enabled them to diversify beyond the agriculture sector within value chains, including into the food industry, consumer goods, manufacturing, construction, automotive, and machinery dealership. Most of the conglomerates the PSLA team interviewed and “We are expanding from seeds surveyed base their core growth strategy on agriculture. and groundnuts to moving For example, they are expanding farming capacities, towards the livestock sector. This diversifying their crops, scaling up domestic supply and would involve the same contract distribution, developing value-added capabilities (e.g., light farming model we have been using manufacturing of agricultural products), and looking to for other products.” - SAY Group export to new markets (especially after the United States rescinds the Designation of Sudan as State Sponsor of Terrorism). Furthermore, almost all the conglomerates the PSLA team interviewed have begun to or are preparing to diversify products by expanding their business to livestock, meat production, and processing as the next expansion of their investment portfolio, building on their agribusiness success and experience. This includes research and development into the fattening process and quality enhancement, slaughtering, and export of live animals and/or processed meat products. To cope with the increased demand for crops and the limited access to developed agricultural land, the PSLA team observed a significant and increasing reliance on the contract farming model for conglomerates’ supply strategy. This might explain their new appetite to invest upstream in their value chains and work with farming communities and cooperatives to develop their production capacity and productivity. This model has helped to better connect the conglomerates with small-scale farmers, enabling more consistent incomes, access to more productive technologies and finance, and enhanced resilience and sustainable livelihoods. Furthermore, this has also enhanced the geographic reach of conglomerates to areas where more vulnerable populations reside and where humanitarian assistance is ongoing. More information on this can be found in Section 2.3.1, Successful Private Sector Engagement Models. Lastly, the PSLA team found that, in light of the post-revolution era and the opportunities associated with removal of Sudan from the SST list, almost all conglomerates interviewed are discussing potential partnerships, collaboration, investment (most notably those connected to the Middle East), and market expansion with international/regional and multinational companies. For example, representatives from Tenzeen spoke of the company’s collaboration with the Government of Egypt to help drive its exports, which included creating a “free zone” between

18 Egypt and Sudan to reduce the costs of exports. In the same “Based on the tax system in context, IHC Food Holding LLC (a fully owned subsidiary of Sudan, MSMEs are being taxed at the same rate as big businesses.” Abu-Dhabi’s International Holding Company [IHC]) and DAL - Alfal Microfinance Group announced a joint agreement to develop and cultivate farmland in Abu Hamad, River Nile State. The five-year investment plan will invest $225 million into the transformation and development of over 100,000 acres into farmland, expected to reach an annual output of over 400,000 metric tons for consumption and export. It is also expected to generate around $1 billion in export revenues over 10 years and to create more than 5,000 jobs in Sudan.

2.2.3 MSMEs The MSMEs in Sudan are more diversified than conglomerates. They cover almost all sectors, but are most active and successful in ICT, multimedia production, services, and trade. Despite being more diversified, compared to conglomerates, MSMEs experience more vulnerability. Many MSMEs were already in a fragile situation before experiencing significant business interruptions like the revolution, the COVID-19 pandemic, and other recent more localized disasters, such as flooding. Support sectors, such as logistics and transport, have suffered the most during the revolution, the COVID-19 pandemic, and the economic crisis. Interviews revealed that MSMEs suffer from governmental “Our goals for the future include policies that have a bias towards conglomerates, which narrowing our support to MSMEs limits their access to finance, precludes them from and start-ups by understanding the government support, and renders them vulnerable to gaps and opportunities the country shocks and business interruptions, such as those mentioned is facing and steering entrepreneurs above. This lack of differentiation causes significant to address these issues.” - 249 challenges and disincentives particularly during the business Startup Hub start-up phase, which is when most small companies due to Sudan’s challenging operating environment and the lack of finance. In the US, for example, policies and frameworks are specifically designed to provide incentives and benefits for MSMEs to enable them to navigate the difficult start-up phase and manage their growth through different business phases. This policy bias has significantly affected MSMEs in Sudan and reinforces a landscape that thwarts competition. Furthermore, the country’s inflation and currency fluctuations have impacted MSMEs significantly. The representative from Alfal Microfinance stated that in Sudan’s current “disastrous” economic environment, where the local currency depreciates by the day, “thousands of MSMEs have failed” due to currency devaluation and inflation. Further, whereas large companies typically have the resources and exporting capabilities needed to manage inflation and currency fluctuations, MSMEs do not have the financial support necessary to mitigate these challenges. However, some opportunities for the MSMEs in the technology and solar energy sectors are emerging, with little competition from major conglomerates. For example, innovation hubs in Sudan such as 249 Startup Hub and Impact Hub Khartoum focus on supporting MSMEs and entrepreneurs in Sudan, and are expanding their operations to Darfur, Gadarif, and Kassala states to create more opportunities for populations outside of the country’s urban areas. Business representatives in the energy space have also highlighted the opportunity for advancements in

19 solar energy, particularly in dry and remote areas of the country with little access to basic needs. Incubators, accelerators, and business associations will be important players to help expand, advocate for, and support MSMEs. When describing their five-year growth plans in the digital survey, micro-enterprises hope to expand domestically, with a few looking at regional and international expansion. They are interested in diversifying their services and products and improving branding, marketing, or awareness of their businesses. 20 Small and medium-sized enterprises (SMEs) across all sectors are most often interested in expanding their suppliers internationally or domestically. Both micro- enterprises and SMEs included goals toward social and environmental ends. 21

2.2.4 Relationship with the Government of Sudan Despite predominantly positive responses regarding the transitional Sudanese government, the private sector still holds grievances about the transitional government's policy agenda and vision. Specifically, they feel that the government needs a clearer policy framework or vision to facilitate private sector development, growth, expansion, and a healthy business enabling environment. When asked how well the transitional government understands and addresses business needs, most survey respondents answered “poorly” in the digital survey. A few respondents believe the government understands but is not addressing the business’s needs and a few others believe the transitional government understands and addresses their needs well. On average, survey respondents rated the government’s understanding of business’s needs at 49 out of 100 and the government’s effort to address their needs at 29 out of 100. 22 As indicated in the graphic below, the survey revealed that most large businesses (silver triangles) responded that the transitional government has a “Poor” understanding of business needs and is “Poorly” addressing business needs, while micro (red squares) and SMEs (blue circles) were dispersed. Although there is coordination and communication between the private sector and the government, the PSLA team observed that there is a lack of action or follow-through.

20 Agriculture microenterprises are focused on branding, expanding service models and markets, and strengthening their supplier relationships. Consumer goods are interested in diversifying products and consumer markets. The energy sector is looking for ways to utilize a social enterprise model and change the energy landscape through education. The logistics sector wants to use the media sector and create new demand through improved marketing. The manufacturing sector wants to invest in their people and machinery to expand production. The services and technology sectors want to promote STEM and education, innovate products, and are looking to international markets to promote their services. 21 Agriculture SMEs are looking to expand their supplier networks domestically. The consumer goods sector is aiming to move into garment manufacturing, exporting, and using a social enterprise model. 22 Scores were slightly lower for SMEs (36/100 Understanding and 22/100 Addressing) and slightly higher for large businesses (57/100 Understanding and 38/100 Addressing). The services sector had the lowest score for both scores (30/100 and 14/100, respectively), while logistics (63/100), agriculture (54/100), and consumer goods (54/100) had the highest scores for Understanding business’s needs. Agriculture’s score on Addressing business needs was higher than average as well at 39 out of 100.

20 Some of the private sector’s complaints about the Government of Sudan cut across industries, while others are more sector specific. The cross-cutting complaints include issues such as: ● The Government's chronic failure to provide foreign currency through the banking system forces the private sector to increasingly rely on the black market and informal means for money transfer. Having to rely heavily on these informal systems has increased the cost and risk of doing business for the private sector. As a result, the private sector has limited access to the international market. CTC (a major conglomerate) stated that they turned to exporting crops to help avail foreign currency to facilitate their other businesses to deal with this issue. This strategy is gaining popularity among big businesses to secure their foreign currency supply and dividend repatriation for foreign investors such as telecoms and agribusinesses. ● Unclear and unstable trade policies are one of the main concerns shared by the private sector. SAY Group and Cofftea Group mentioned an incident in which the Ministry of Trade issued a decree stopping the export of groundnuts, which led to exporting delays and business losses for both companies. The Ministry later reversed the ban, again allowing for the export of groundnuts; However, the delay led to environmental damage to the groundnuts as they were stored in poor conditions during the delay, leading to revenue losses for SAY Group and Cofftea. Agribusiness companies (surveyed companies are predominantly large companies) shared specific issues with the Government, which are summarized below: ● Land ownership and tenure issues: Many of the companies who acquire land (long term-lease or full ownership) from the Government to establish farming projects face issues with local communities that claim communal ownership of the land. The companies then must negotiate with the community leaders and members directly, which causes delays to their production and sometimes damage to company properties by the community. ● Infrastructure issues: Companies found themselves developing the infrastructure (roads, electricity, etc.) in areas where they have business. The private sector believes this is the Government's work, and that the private sector should instead focus on developing

21 their business. However, companies like DAL, Haggar, and SAY Group consider infrastructure development activities as part of their CSR commitment as they are also serving surrounding communities. ● Policy challenges: The Government lacks a clear policy towards contract farming, which sometimes causes conflict and disagreement between investors and farmers. Mahgoub Sons Group, SAY Group, and Haggar relayed many experiences in this area, and each company has developed their own contract farming terms acceptable to farmers.

2.2.5 Areas for Government of Sudan to Address When asked what the Government could further address, survey respondents’ most universal request includes stabilizing the economy and currency. The second most frequent request is improving the Business Enabling Environment through tax reforms, simplifying legal processes and procedures, addressing corruption, and creating more effective processes- single window, etc. Similarly, several respondents noted the need to digitize management processes the government controls. Tied for third are financial sector reforms, especially promoting policies that connect to international markets, making capital more available, and inclusive governance, meaning balancing who benefits from policies and ensuring even development across Sudan. A few micro and large businesses requested specific policies for their sectors, specifically agriculture, education (services), and tourism. Micro and small businesses requested technical and financial support for start-ups and SMEs. Both micro and large businesses suggested the government should increase engagement with the private sector, via partnership building, policy dialogues, and learning from the private sector for greater efficiency.

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2.3 State of Private Sector Engagement in Humanitarian Assistance 2.3.1 Private Sector Experience with Humanitarian/Development Partnerships Many conglomerates have generally positive partnership experience with development partners, particularly in the agriculture and food security sector (further described below). While MSMEs have had less interaction with the development community through traditional partnerships, they seem to understand the vast opportunities for collaboration that will not only contribute to longer-term development objectives in Sudan but will also support their growth and expansion. Lastly, certain service sector companies, such as those in “[I have seen that there is] a transportation and logistics, have maintained a close difference between communities relationship with humanitarian assistance organizations participating in an agricultural throughout the past decade, and in many cases their service partnership pilot and those who provision have kept these companies afloat through difficult continue to receive aid. If economic times. [interventions] are done through a development approach, we are Survey respondents discussed a variety of activities and more likely to scale and sustain engagements related to partnerships with humanitarian incomes.” - Haggar Group actors, most often in an area relevant to their own work. For instance, agriculture companies tend to have activities that support social, economic, or environmental objectives and policies relevant to agriculture, including environmental mandates or CSR activities related to their suppliers and smallholder farmers, WASH, and health. Technology companies tend to have community engagement for education, affordable services, and employment, while energy companies offer vocational training and environmental advocacy. Logistics companies’ activities included vocational training and general CSR.

23 2.3.2 Private Sector Interest in Partnerships 23

The private sector interviewees responded overwhelmingly with openness to the idea of partnering with USAID/BHA. This appeared in large part due to the private sector’s familiarity with humanitarian issues in Sudan and their willingness to advance common humanitarian and development goals and impact. Some companies even mentioned that their future business strategy included better engagement with the development community and donors to ensure impact. The private sector in Sudan is beginning to see an increased focus on corporate social responsibility, which enables a platform for partnership with USAID/BHA. As summarized in the graphic below24 of survey respondents, 63 percent have a social development mandate, 25 43 percent an environmental mandate, and 47 percent have active partnerships that address social, economic, or environmental objectives. As Sudan’s economy and investment open due to easing of sanctions and associated restrictions, the family-owned conglomerates and other larger companies will be influenced more by global development agendas and global targets like the UN’s Sustainable Development Goals (SDGs). This presents further opportunities for sustainability-driven partnerships that both support Sudan and meet reputational pressure from the global community. Furthermore, it is worth mentioning that a younger second or third generation is beginning to take over many of the family-owned conglomerates and with these leadership changes come shifts in new ideas, motivations, and priorities that will also encourage sustainability-focused partnerships.

23 Overall, survey respondents are most interested in the development partner’s assistance in getting access to finance (53%), they also desire technical support (47%) and assistance in networking (30%). Large businesses are also interested in the development partners’ influence to address the business enabling environment (43%), job growth (29%) and education (29%). In addition to the most common interests across all business sizes, micro businesses are most interested in the development partner’s assistance in accessing technology (22%), while SMEs want improvements to the infrastructure (40%) and education (40%) in Sudan. 24 Of the five types of company policies and practices, on average, SMEs have the lowest numbers established (1.67), including four companies that had none. Microenterprises were evenly distributed across the mandates and partnerships, while they often did not have departments, or funding for CSR specifically. Small and Medium enterprises (SMEs) have at least two of the types also most likely to be social development mandates or CSR departments. Large enterprises on average have more than three of these arrangements, most often having departments or personnel for CSR and philanthropy, but also active partnerships that support social, economic, or environmental objectives, or have social development mandates. 25 Led by 56% of microenterprises, 60% SMEs, and 86% of large businesses.

24 While certain companies see their partnership role within humanitarian assistance to fall within their CSR initiatives, others would consider a partnership with USAID/BHA as beneficial to their core business mandate. In fact, survey responses revealed a strong intersection between business models and humanitarian sector work. 26 Additionally, at least half of the survey respondents indicated that they do not have operations in rural areas, nor do they serve vulnerable populations. 27 Therefore, companies looking to expand their business operations to Sudan’s rural areas may recognize the importance of leveraging development partner’s knowledge, connections, and resources to penetrate these markets. A portion of companies interviewed expressed a desire for partnerships to go beyond humanitarian assistance to instead focus on long-term sustainable development and resilience building of communities, which would in turn improve business operations and economic growth and stability within Sudan. These companies mentioned that ideal engagements would fit within existing business models and/or help to improve and strengthen different components along the value chain in which they work. Interventions such as these will help to address the root causes of vulnerability, such as conflict remediation, food security, and poverty alleviation.

26 When asked if their business intersects with any traditional development and humanitarian sector work, survey respondents were most frequently engaged in agriculture (67%), food security (57%), and nutrition (40%) related work. Large companies dominated in the nutrition sector (86%) and had significant presence in the WASH sector (57%). A few businesses working the disaster and emergency areas (27%), across all sizes while five businesses had no intersection (17%), with one business having a CSR project focused on education. 27 See Annex 1: Survey Responses

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2.3.3 Successful Private Sector Engagement Models Through its interviews and desk research, the PSLA identified examples of successful engagement models between the private and humanitarian sectors in Sudan. The two most common partnership models include one in which the private sector was the supplier of services and inputs, and the other in which the private sector jointly implemented activities with humanitarian actors. The successful models included multiple partnerships, including the private sector, donors, non-governmental organizations (NGOs), research institutions, local financial institutions, and the local Government. The PSLA team identified several attributes that contributed to the success of these partnership models. First, the projects or initiatives were flexible and open to adding more partners as needed or which allowed for changes in scope and methodology. Additionally, many partnerships leveraged innovation and technology to evolve and deliver more favorable results. Some of the innovations adopted are the use of improved inputs, the introduction of mechanization, and using contract farming arrangements, which gave solutions for issues like access to finance and access to markets for farmers. Furthermore, most of these partnerships consisted of multi-year initiatives, which allowed partners to adaptively manage and improve on the approach as time went on. The USAID-funded Recovery in Sudan for Improved Nutrition and Growth (RISING) project stood out as a successful partnership model. USAID awarded Catholic Relief Services (CRS) with implementation of the RISING project from 2019 to 2020, which aimed to support 7,598 vulnerable food insecure returnee and resident households in Darfur and set the foundation for economic recovery and increased resilience. CRS led a consortium of international, national, and private sector partners to implement RISING, including World Vision International, Norwegian Church Aid (NCA) and the Catholic Agency for Overseas Development, along with private sector partner Central Trading Company (CTC) Group Limited. After a review of the communities by partners, the project found that it was critical to design and deliver relief services that meet the needs of all inter-connected communities to help diversify livelihoods and bring about meaningful development. The target goal of 7,598 was therefore increased to 10,360

26 vulnerable households. The RISING project’s inclusion of multiple partnerships, as well as its flexibility and openness to changing scope design and methodology as new findings arose, were key components of its success. 2.4 Common Themes and Cross-Cutting Findings in PSE In order to gain a broad representation of the Sudanese private sector as it relates to potential humanitarian sector alignment, the PSLA team documented recurring feedback from interviewees related to the private sector’s relationship to and engagement with development initiatives and humanitarian assistance in Sudan. These themes spanned across the PSLA’s focus sectors and therefore offered a glimpse of the Sudanese private sector’s challenges and experience in the humanitarian space more generally. The common themes and findings are summarized below. 2.4.1 Flooding is a Primary Disaster Concern Companies cited flooding most frequently as either the highest risk to their own business and employees, or as a primary disaster concern for the Sudanese private sector. The risk of flooding spans across sectors; for example, the telecommunications company Sudatel cited flood damage to their infrastructure and fibers as one of their company’s top disaster concerns. However, flooding disproportionately affects the agricultural sector, from large agribusinesses to smallholder farmers, and causes extensive damage to a variety of farmland and livestock. And while large agricultural companies like Cofftea have the resources available to increase their flood resilience, smallholder farmers lack the necessary technical knowledge and financial flexibility to invest in flood mitigation measures. Because the frequency and effects of flooding are so widely “We have quite a large CSR understood, some of Sudan’s private sector provide program; in terms of disaster assistance, we mobilize our own staff solutions to flooding, and many of the country’s larger or and resources to help people regional companies focus their CSR activities on flood affected by flooding. This includes relief and other aid for affected communities. According driving people to safety and donating to the representative from DAL Energy, the company has vehicles, food, and blankets to mobilized its own staff in the past to help people in need affected populations.” - DAL Group of flood relief and donated food and blankets. Additionally, the representative from Alfal Microinsurance participated in a government-led program called PDMA, which focused on flood resilience and recovery. 2.4.2 Lack of Access to Energy is a Major Barrier for Reaching and Developing Remote Areas The PSLA team learned through interviews that the lack of infrastructure, especially in energy, is a primary constraint for private sector expansion and impact in remote and rural areas. While poor road infrastructure poses a challenge for companies to travel to areas outside of major cities like Khartoum, the lack of energy is a fundamental barrier to establishing markets or services in rural regions. Specifically, the lack of access to energy in remote areas prevents companies from being able to establish the necessary connection to clients, either through physical infrastructure or through electronic connectivity. For example, the representative from Sudatel told the PSLA team that lack of electricity was the company’s primary barrier to expanding telecommunications services outside of major cities, saying: “if we had a wish list of

27 three things that would make it easier for us to expand to remote areas it would be: power, power, and power.” Part of the barrier to energy connectivity is that Sudan’s remote communities, especially farming populations, are not connected to Sudan’s national grid and instead rely on diesel for energy. In fact, only 30 percent of the Sudanese population is connected to its national grid, according to the interviewee from BAMS for Irrigation & Agricultural Services Co. Another problem is the lack of government policy and support regarding energy access for remote areas. Company representatives told the PSLA team that private sector energy generation is currently illegal in Sudan, though they expect legislation next year that would allow the private energy market to enter rural areas. To help address the issue of energy access, some energy companies in Sudan have focused efforts on creating off-grid energy solutions for rural communities as their core business. For instance, MD Energy, a relatively new MSME, provides solar energy solutions for Sudan’s agricultural and residential sectors. However, companies both within and outside of the energy sector cited challenges to establishing and expanding the use of solar energy in Sudan. One challenge with regards to renewable energy is “One of the biggest challenges the lack of data or awareness of its benefits to make it appealing. is that people [in rural areas] The representatives from MD Energy relayed that Sudan’s rural do not have access to the populations do not trust the reliability of the renewable energy national grid. We are targeting these populations with mini- currently available in most markets due to low quality. grids and solar grids for rural Additionally, conventional energy from the national grid is much villages.” - MD Energy cheaper than solar energy, so little incentive exists for people to invest in solar as an alternative. Survey responses revealed additional ways that energy companies in Sudan are seeking to improve the sector. For instance, respondents indicated a growing trend among large energy businesses in developing new products like aquaculture and domestic ethanol products from sweet potatoes. Additionally, some companies responded that they are looking for ways to utilize a social enterprise model to change the energy landscape through education. Energy solutions therefore present a clear opportunity for further development. 2.4.3 Lack of Access to Finance is a Challenge for all Sectors but not all Companies Many interviewees spoke of the lack of access to finance as a major limitation generally, but it is especially challenging for small-scale farmers and MSMEs to access microfinance. Part of the challenge is that most Sudanese banks do not provide financial products, such as microfinance or micro-insurance, for MSMEs and instead focus on larger companies. While banks have a legal requirement to set aside 12 percent for microfinance, the requirement is not widely enforced. Further, the current economic climate, caused by hyperinflation and devaluation, has driven banks to become extremely risk averse and banks believe that lending to these groups increases risk. High transaction costs when working directly with individual small holders further deters lending to this population. Furthermore, Islamic banking principles and regulations currently govern the finance sector in Sudan. Islamic banking includes principles that adhere to Sharia law and prohibits charging or paying interest. These principles have caused challenges for microfinance as strict requirements

28 exist for installments, ceilings, and specific sectors where lending is permissible. For example, financial technology companies are considered service companies and therefore are not allowed access to credit under Islamic banking principles. While an effort to shift toward standard banking prices and expanding credit to small-scale producers is underway, through engagement of associations or cooperatives, minimal progress has been made to date. The lack of finance and capital prevents farming communities in Sudan’s remote and rural populations from purchasing technology or machinery that could help improve production and create more sustainable livelihoods. In addition to affecting farming communities, the lack of financing mechanisms is also a challenge for agribusinesses who rely on small-scale farmer production. Instances where blended finance facilities or risk-sharing funds incentivized banks to provide access to small-scale producers has resulted in increased production, yield, and improvements to the value chain. The lack of access to capital and financing mechanisms is a major barrier for farming communities to develop the capacity they need to be resilient to economic downturns and other shocks. Based on interviews, financial institutions and agribusiness are interested in enhancing access to insurance products, both from the perspective of the financial institutions to de-risk their investments, as well as insurance to cover/mitigate risk. Finally, mobile money is gaining attention within Sudan, but the general lack of infrastructure impedes reach to populations most in need of digital money services. Furthermore, fintech companies, who could enable better mobile money payment systems, are unable to access finance due to Islamic banking principles.

2.4.4 Lack of Access to Human Resources is a Challenge for Larger Companies Many large businesses cited the lack of access to skilled workers and human resource capacity as a significant challenge. This is in part due to a mismatch between the education system and skills that the market demands, as well as a general lack of expertise in business skills and a greater need for knowledge transfer and training. Many interviewees spoke about the youth in Sudan studying subjects and building skills that the market does not desire. Additionally, while many large agribusinesses provide technical training for small-scale “The microfinance sector is and contract farmers, a gap persists in soft skills like completely supervised by the negotiation, financial literacy, vocational skills, or other Central Bank of Sudan. Most business skills desired by the private sector. Regarding the banks are not focused on agricultural sectors’ needs for more storage infrastructure, the microfinance because they see interviewee from Professional Hands Co. said that “one of the this sector as competition; most crucial areas will be to provide training to local instead, they work primarily with big companies.” - Alfal communities so they can independently maintain and repair Microinsurance the infrastructure.” The PSLA found human resource constraints to be a challenge across sectors. For example, the finance sector noted a lack of skills related to accounting, loan distribution and collection, and finance mobilization while the logistics sector noted the approaching retirement of those knowledgeable about the passage from Sudan to South Sudan (a concern for humanitarian actors). Furthermore, human resource issues extend beyond the private sector with challenges in government staff turnover that sets back relationship building and institutional knowledge around policies.

29 A few interviewees mentioned the sanctions' effect on Sudan’s human capital. Multinational companies, based in Sudan before sanctions, upgraded workers’ skills to meet international standards. As sanctions forced these international companies out of the country, brain drain followed. The sanctions all thwarted knowledge transfer and growth in the banking sector as relationships with international banks diminished. There is hope that the lifting of sanctions will likely bring back multinational companies and relationships with banks that will not only invest in human capital, but will also pressure Sudanese companies to meet international standards in training, social safeguards, environmental compliance, safety, etc. 2.4.5 Shifts to Future Investment: Livestock The interviews revealed a strong market push toward “[We] want to cover the entire investment in the cattle and poultry value chains as a strategic value chain from fed to meat.” - expansion for the conglomerate's interest in agriculture and Haggar Group the food industry in general. This new interest trend includes livestock fattening, slaughterhouses, meat processing, and “[We] see tremendous export (both live animals and meat products). DAL Group, potential to help people have SAY Group, and Haggar Group are among the companies better quality meat.” - DAL independently piloting and incubating livestock projects by Agriculture initiating their own research on the best formula for livestock breeding and fattening (best breed, fattening program, and feed types). The lack of proper and applied livestock and animal production research in the country had pushed these companies to invest in their research capabilities before expanding their investments in the sector. For example, the interviewee from Haggar Group told the PSLA team that the company recently completed its own feasibility study for slaughterhouses and is also pursuing a study around livestock and poultry. Although most of these projects are currently based in Khartoum, companies are exploring different supply models such as contract farming in Khartoum, Kordofan, Darfur, and the Jazeera states. Sourcing cattle from western Sudan offers a greater opportunity as they can travel far distances, whereas poultry is more sensitive to distance so sourcing must be close to slaughterhouse. The representative from SAY Group mentioned that the company was looking into expanding their products from seeds and groundnuts to livestock, and that the company would employ the same contract farming model as it does for its existing product line. Despite the conglomerates' value chain thinking, the hyde and leather sectors are not considered in the portfolio yet. 2.4.6 Technology is the Future Compared to other African countries, Sudan has historically been slow to develop and innovate in the technology sector. This is due to sanction-related trade challenges, lack of access to finance, as well as a difficult business enabling environment, among other factors. However, lessons learned, proven business models, and development-focused technologies and services from other country contexts are now being applied in Sudan. The technology sector also has increasing opportunity to scale and innovate solutions designed to reach vulnerable populations. Interviews revealed that the agribusiness sector is particularly focused on expanding distribution of technology for smallholder and contract farmers (including through access to finance to

30 purchase technologies) to improve agricultural output and efficiency. Technologies of focus include seeds and pesticides, engineering and mechanization, and export efficiency. The Sudanese telecommunications sector is dominated by large companies that have seen relatively stable growth. While telecommunications companies have ventured into mobile money, fintech, business mobility solutions, among other types of technologies, they have not adequately scaled these technologies, nor are they easily accessible to more remote or vulnerable populations. The ICT sector includes a group of MSMEs focused on a variety of computer programming and web-based services, including those targeted to the agriculture sector, mobile banking, and eCommerce platforms. For example, Sabal ICT’s focus includes developing solar energy solutions for Sudan’s rural farming populations. Many of the burgeoning Sudanese incubators and accelerators provide business development support for MSME technology companies, which will further enhance growth and stability of technology products and services. Additionally, the COVID-19 pandemic gave rise to a demand for mobile banking and eCommerce solutions after businesses were forced to close and enforce social distancing. The PSLA team spoke with companies, such as EBS, who stated that they aim to expand into fintech services to meet this new demand. Other companies, such as Sabal ICT, are developing software solutions to assist with the distribution of sanitation products and other equipment as part of local organizations' pandemic response efforts. Although the large telecommunications companies typically have CSR programs, they have had little to no direct engagement in development or humanitarian assistance to-date. Further, while many of the MSMEs have provided their services to local organizations and local government partners, they have had minimal connection to development donors or major humanitarian actors in Sudan. Company interviewees attributed the lack of collaboration to the absence of a proper engagement platform with these actors. 2.4.7 Lack of Sustainable Storage Infrastructure and Warehousing Many interviewees mentioned the lack of storage “A critical challenge for Sudan’s infrastructure in Sudan as a major obstacle to the agricultural agricultural value chain is grain sector’s economic development, especially for smallholder storage; there is currently not farmers. According to Professional Hands Co, a critical enough warehousing for the challenge facing the country’s agricultural value chain is the country’s production. lack of proper storage of grain and other agricultural products. Additionally, much of the existing As most smallholder farmers do not have access to proper storage is open to the elements, storage or warehousing facilities and, as existing storage is which leads to erosion and open to the elements, their harvests face high levels of erosion damage of the grain.” - and damage. Mahgoub Son Group confirmed this point by Professional Hands Co. Ltd citing high crop losses among farmers and stated that silos would play a major role in building more capacity and keeping existing crops safe and secure. However, some companies are making progress in this area, with representatives from Mahgoub Sons and CTC including small and medium storage facilities as part of their future investment plans. In addition to the lack of sustainable storage, Sudan’s poor road infrastructure affects the transport of goods throughout the country. This leads to delivery setbacks and delays for many of the country’s large agribusinesses. Representatives across family-owned conglomerates

31 referenced the frequent supply chain challenges due to Sudan’s poor infrastructure. For example, Cofftea stated the company depends on independent trucking companies to transport their goods but, due to the poor infrastructure in the country, they experience major delays in product delivery, especially to remote and rural areas. Additionally, CTC spoke of poor logistics at the country’s ports and the state of roads and other transport infrastructure negatively impacting the firm. 3. Opportunities and Recommendations 3.1 Ways of Working with the Private Sector As previously mentioned, companies in Sudan are overwhelmingly open to working with donors, NGOs, or governmental actors towards development and humanitarian goals. The interviews also revealed private sector experiences, perceptions, and expectations of partnerships. This feedback, coupled with insight from Resonance technical experts, presents advice on ways that USAID/BHA can effectively approach and build trust with companies in Sudan to increase chances of success, scale, and sustainability of partnerships.

Build trust to develop partnerships. The most important factor in partnership development is nurturing trust between parties. Many of the points below describe ways USAID/BHA can build trust with the private sector. The PSLA team acknowledges that building relationships takes time and requires patience and continued engagement. Additional suggestions on building trust include: ● Try to understand the world views and motivations of the private sector. For example, the private sector is often interested in partnerships that not only maximize impact but also support business drivers, create profitable business models, and advance business outcomes. Understanding the drivers and motivations of the private sector will help to build trust and ultimately more impactful partnerships. ● Shift perspective and underlying assumptions about private sector motivations. While the private sector wants to gain from partnerships, it does not necessarily hold unsavory or ulterior motives. Creating shared-value partnerships that help both parties achieve their objectives will be most fruitful.

Find a common language. To build trust and create lasting partnerships, USAID/BHA and the private sector must communicate effectively. USAID and the private sector often experience challenges with communication because they come from very different work environments and often have different world views. For the Sudan PSLA specifically, the PSLA team found that many companies do not distinguish between development and humanitarian assistance, but instead view all donor activity under the same umbrella. For USAID/BHA’s purposes, BHA should establish an understanding of the Agency’s mandate and objectives as it relates both to resilience and rapid response/relief to potential company partners. Other considerations for finding a common language include:

● Acknowledge that both parties have different viewpoints and instill open communication that encourages questions and honest discussion. USAID is not expected to understand detailed corporate business models, nor should the private sector be expected to

32 understand USAID procurement regulations. Asking questions when there is uncertainty and explaining the rationale behind partnership aspects that may be obvious to USAID (e.g., contractual aspects) will go a long way toward finding a common language. ● Try to avoid speaking in acronyms or development industry phrases, and instead talk about both technical and contractual topics so that the private sector can understand. Conversely, ask the same from the private sector. ● Consider hiring private sector engagement specialists or work with partners/contractors who have experience working in and with the private sector to help facilitate partnership development and co-creation activities.

Include the private sector in the co-design process, either as an additional resource partner or a potential implementing partner. Companies with previous donor partnership experience often express a desire to be engaged early, especially at the beginning of the project/partnership design process to ensure ideas leverage and harness existing knowledge, models, and approaches that the private sector is already employing. This not only leaves room for more innovative thinking but also allows the private sector to incorporate their technical expertise and local knowledge into the conceptualization and ensures the design is applicable and beneficial to a private sector partner. Co-creation, particularly from conceptualization, helps to build trust between parties, ensures more shared-value partnerships reach agreement, and leads to partnerships that show more effective implementation and sustainable outcomes in the long-term. Additional points on the co- design process include:

● Co-creation is best done as an ongoing process so that each party has time to digest and reflect on the discussions and return to the co-design process with more refined ideas that meet both parties’ expectations. ● Consider different forms of contracting mechanisms that better fit within the private sector’s business models and practices. For example, make greater use of grants for USAID contributions to partnerships to reduce reporting requirements and lessen intellectual property issues or consider innovation as a more rapid and flexible procurement modality when working with SMEs. Also consider alternative types of procurements that allow for faster action and greater adaptive management, such as Collaborative Agreements. ● Identify and train dedicated Contracting Officers to develop expertise on contracting with the private sector and include them in the co-creation process from the onset to ensure ideas and partnerships will fit within USAID procurement regulations. ● Ensure results are aligned with objectives for shared-value partners by including indicators for both USAID development outcomes and business outcomes. Set clear expectations and maintain transparency around timelines. The private sector often has very different expectations of partnership timelines than USAID/BHA partners. For example, companies tend to want pilots and scaling of successful models to occur quickly or align with their business funding cycles (or in some cases agricultural seasons). Delays in partnership formation due to USAID approvals and procurement requirements can quickly become a contentious point. Ways to overcome these challenges include: ● Ensure clarity and transparency around processes and deadlines from both sides to help strengthen partnership trust.

33 ● Maintain open and ongoing lines of communication if unexpected challenges arise in order to set new expectations and make adjustments. ● Provide clear guidance around contractional pieces of partnerships. For example, clarity on approval processes, budget templates, indirect cost rates and cost share calculations, or reporting requirements. 3.2 Opportunity for Ecosystem-focused Partnerships that Amplify Impact The PSLA revealed that Sudan’s private sector is eager to partner with development and humanitarian actors in ways that enhance their business operations, further their reach, and test improved business models that provide development co-benefits. More specifically, the PSLA showed that there is an opportunity to emphasize ecosystem-focused partnerships that go beyond engagement of traditional partners to amplify impact. USAID/BHA should consider the following factors in the design and development of private sector partnerships in Sudan to magnify partnership impact. ● Addressing foundational issues like access to energy, education, water, and finance will expand partnership impact, improve business outcomes, and will ultimately transform Sudan. Focusing on these issues will create the foundation for the ecosystem needed to address some of the more complex problems within the country and will facilitate the achievement of far-reaching benefits. ● Focusing on topics that have begun developing in Sudan but need a “nudge” (e.g., financial support, technical assistance, investment, advocacy, and connections), will help these initiatives scale up and become mainstream and formalized. These topics include support for MSMEs (e.g., policy support), technological advances (e.g., mobile money payments), or renewable energy (e.g., mini grids or distributed solar), among others. ● Creating partnerships that focus on development objectives (i.e., resilience as opposed to humanitarian response) will be more attractive to the private sector and will provide more far-reaching benefits for marginalized and vulnerable populations to sustain and scale their income. ● Considering the complexities of the ecosystem or larger development challenges (as opposed to thinking linearly about problems) will help build partnerships that solve multiple problems in an integrated and holistic way. The most successful partnerships focus on the larger development context and tackle problems from the systems level as opposed to the singular problem level. In this model, different actors serve in complementary roles and, ultimately, work better together. The graphic below demonstrates the many roles that USAID/BHA can play in partnerships (see “BHA as a Catalytic Actor”). ● USAID/BHA should work with the private sector during the partnership development process to ensure that the Do No Harm approach/framework is used to guide an analysis of the impacts that partnership activities may have on conflict. This should include an acknowledgement from the private sector partner of the importance of Do No Harm principle and commitment to understand and address the real complexities of how assistance programming intersects and affects conflict. ● Finally, USAID/BHA should work with potential private sector partners to incorporate gender equity and inclusion during the partnership development process. This can include

34 incorporating opportunities specifically designed for women and marginalized groups who otherwise have fewer opportunities to engage in the private sector market.

3.3 Opportunities to Engage with the Private Sector The PSLA highlighted several areas where USAID/BHA could plug into the private sector for shared-value partnerships that advance the business goals of companies while also supporting USAID/BHA prioritized development objectives. These include opportunities to address some of the gaps and challenges the PSLA team observed throughout its interviews with company representatives, as well as areas that companies cited as of interest for potential partnerships. The PSLA team has prioritized these opportunities into short- and medium-term timelines, and provided details regarding their potential impact, USAID/BHA’s role, and potential private sector partners in the tables below. 28 3.3.1 Short-Term Opportunities Opportunity Leverage RISING Model to Expand Resilience

Description: Build off the existing RISING partnership model to expand the humanitarian areas it covers, including flood resilience, finance, and improving livelihoods by better connecting people to the market.

Potential Impact: Leverage from existing partnership/initiative can help increase resilience and livelihoods for vulnerable populations, without the need to establish

28 Short-term opportunities are those perceived to be “low-hanging fruit” or requiring relatively less time for BHA to initiate due to existing initiatives or resources. Medium-term opportunities are perceived as relatively more time- or resource-intensive as they may require more upfront resources or time for BHA to initiate.

35 a new initiative or partnership model.

USAID/BHA Role: Broker/Facilitator

Potential Partners: RISING project (CRS)

Opportunity Support Microfinance / Agricultural Finance

Description: ● Facilitate expansion of agricultural finance to rural and marginalized small-holder and contract farmers through shared risk schemes (e.g., weather insurance) and awareness raising / capacity building for farmers. ● Encourage finance companies to meet the 12 percent legal microfinance requirement. ● Connect finance companies with organizations that inform them about the types of financial products and services needed and facilitate access to MSMEs and small-holder clients.

Potential Impact: Improved livelihoods and production capacity and efficiency of farming communities through greater access to finance.

USAID/BHA Role: Risk Mitigator; Broker/Facilitator

Potential Afal; EBS; CTC Group; The Agricultural Bank; Bank of Khartoum Partners:

3.3.2 Medium-Term Opportunities Opportunity Encourage Energy Access for Remote Areas

Description: ● Develop a plan to deploy renewable energy solutions (instead of generators) as part of humanitarian relief - this may include developing partnerships, procurement, and logistics plans with renewable energy providers. ● Work with renewable energy companies to identify the sector’s needs for expanding solar energy solutions (i.e., access to finance, capacity building in rural areas, renewable energy data) and connect these companies with the required resources. ● Consider renewable energy as a complementary component of holistic solutions, e.g., as a component of agricultural livelihood programs, education or WASH programs, or training or market strengthening activities.

Potential Impact: Accelerated economic growth in remote and rural areas; supported

36 growth of renewable energy MSMEs, and co-benefits (e.g., education improvements).

USAID/BHA Role: Co-Creator; Advocate; Broker

Potential Partners: MD Energy; DAL Group; Sudatel; BAMS for Irrigation & Agricultural Services

Opportunity Invest in Innovation and Technology

Description: Work with startups and entrepreneurs to fund, design, and co-create innovative solutions for Sudanese farmers and vulnerable populations (e.g., climate smart agriculture, fintech solutions, etc.). Potential initiatives could include: ● training cooperatives that provide vocational training to entrepreneurs; ● encouraging foreign direct investment (FDI) of multinational companies to help fund startups.

Potential Impact: Private sector led solutions to humanitarian challenges for Sudanese farmers and vulnerable populations; market growth of local startup companies, MSMEs, and entrepreneurs; and creation and expansion of new technology accessible to farmers.

USAID/BHA Role: Co-Creator; Funder/Investor; Investment Catalyst

Potential Partners: 249 Startup Hub; Impact Hub Khartoum

Opportunity Resilient Warehousing & Sustainable Housing

Description ● Support the capacity and reach of construction companies to provide more sustainable warehousing and housing solutions for farmers and rural populations. ● Leverage the interest of agriculture companies in building warehouses and storage facilities to partner on these initiatives. ● Support farming cooperatives to communally store their grain and other products for purchase.

Potential Impact Better storage capabilities for farmers and increased resilience to weather-related shocks or damage to crops; economic growth and expansion for Sudanese construction companies.

USAID/BHA Broker/Facilitator; Convener Role

37 Potential Actors Agricultural Consortiums/Cooperatives; Professional Hands Co. Ltd.; Tenzeen

Opportunity Support the Shift to Livestock

Description ● Expand the market push towards the cattle and poultry value chains by encouraging conglomerates to apply the contract farming model to livestock and source directly from rural and vulnerable producers and pastoralists (e.g., in Kordofan and Darfur) with potential replication in other areas like Gadarif and Sinnar States. ● Explore the hyde and leather value chains, which offer significant employment opportunities for both refugees and host communities. ● Ideally consider support through ecosystem-focused partnerships that also address market strengthening, finance, training, etc.

Potential Impact Strengthening and expanding livelihood opportunities and sustainable household income for vulnerable populations.

USAID/BHA Advocate; Investment Catalyst Role

Potential Actors DAL Group; SAY Group; Haggar Group

38 Annex 1: Private Sector Survey Analysis Sudan PSLA Private Sector Survey Analysis Annex II: Sudan PSLA Contacts Sudan PSLA Interviewee Contact List Annex III: PSLA Interview Notes Sudan PSLA Interview Notes Folder Annex IV: Interview Guide Sudan PSLA Private Sector Interview Guide

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