Table of Contents:

FOREWORD 4

I. Implementation of the CPA: Status and Next Steps 5

II. Progress in Implementation 6

Government of National Unity (GNU) 6

A. Policy and Program Development Priorities: 6

B. Progress and Priorities at the Cluster Level 8

(i) Capacity Building and Decentralization: 8

(ii) Governance, Rule of Law and Media: 9

(iii) Economic Policy: 10

(iv) Productive Sectors: 11

(v) Basic Social Services: 12

(vi) Infrastructure: 13

(vii) Livelihoods 13

(viii) Information and Statistics: 13

Government of Southern Sudan 14

A. Policy and Program Development Priorities 14

B. Progress and Priorities at the Cluster Level 15

(i) Capacity Building and Decentralization: 16

(ii) Governance, Rule of Law and Media: 17

(iii) Productive Sectors: 18

(iv) Basic Social Services: 20

(v) Infrastructure: 22

(vi) Livelihoods and Social Protection: 24

(vii) Statistics, Monitoring and Evaluation, and Information systems: 25

III. Resource Allocations to Support Pro-poor Efforts 26

A. Trends in National Government Budget Allocations in 2005 and 2006 26

B. The GOSS Budget 28

C. Development Assistance Trends and Needs 31

IV. RESULTS MATRICES 34

A. Government of National Unity, Northern States, Three Areas 34

ESTABLISHING CORE CAPACITY 34

RULE OF LAW 36

ECONOMIC POLICY 39

PRODUCTIVE ACTIVITY: PRIVATE SECTOR AND RURAL DEVELOPMENT 42

BASIC SOCIAL SERVICES 44

INFRASTRUCTURE 46

LIVELIHOODS 47

INFORMATION AND STATISTICS 49

B. Government of Southern Sudan 51

ESTABLISHING CORE CAPACITY 51

RULE OF LAW 53

ECONOMIC POLICY 55

PRODUCTIVE ACTIVITY: PRIVATE SECTOR AND RURAL DEVELOPMENT 57

BASIC SOCIAL SERVICES 59

INFRASTRUCTURE 61

LIVELIHOODS 62

INFORMATION AND STATISTICS 63

C. Development Partnerships and Security Development 65

DEVELOPMENT PARTNERSHIPS 65

SECURITY 66

FOREWORD

Since the signing of the Comprehensive Peace Agreement (CPA) in January 2005, the Sudanese people have embarked on a journey to peaceful and just resolution of the conflict through recovery, reconciliation and prosperity throughout Sudan. Much progress has been made over the past year in terms of delivering on the promises made in the CPA, and establishing the foundations for increased efforts towards reaching the Millennium Development Goals (MDGs).

The development process has been guided by the “Framework for Sustained Peace, Development and Poverty Eradication”, which lays out the basic foundation and principles for poverty eradication. Over the past year, the basic functions of government have been established at national, Southern Sudan and state levels, various commissions have been established as outlined in the CPA, and budgetary allocations are increasingly reflecting the governments’ commitment to accelerate development and poverty eradication.

I am pleased to present here a detailed report showing progress against the JAM framework and political reform agenda, based on revisions made by the relevant line and core agencies, and discussions with NGOs and development partners.

We commit to increased efforts, as well as continued involvement and assistance by the international community. We strongly value foreign assistance in helping to generate the peace dividend, build confidence and trust among all people of Sudan and at all levels of governance, and combat poverty and the sense of marginalization and exclusion in all regions of Sudan.

Salva Kiir Mayardit

First Vice President of the Republic of Sudan and

President of the Government of Southern Sudan

I. Implementation of the CPA: Status and Next Steps

In spite of the unforeseen obstacles that followed the signing and final adoption of the CPA, a considerable degree of progress has been achieved in the implementation of the agreement. The progress has in varying degrees covered all the eight clusters of the JAM document in the course of the year 2005 while also defining the priorities for the year 2006. The following briefly outlines progress against the Power and Wealth Sharing Protocols, and indicates focus areas over the coming months. The remainder of the report will elaborate on specific elements in further detail.

Constitutional and Political Developments:

§ CPA signed and adopted by legislative bodies in January 2005.

§ Interim National Constitution adopted on June 18 and signed on July 9.

§ Institution of Presidency established on July 9.

§ Government of National Unity (GNU) appointed on September 20.

§ National Assembly and Council of States formed and met on August 31.

§ President of Government of Southern Sudan appointed.

§ Transitional Southern Sudan Legislative Assembly appointed.

§ Interim Constitution of Southern Sudan adopted on December 5.

§ State Governors appointed.

§ State Legislative Assemblies formed.

§ All states governments established except for Khartoum and Southern Kordofan.

§ Constitutional Court established on December 24.

Wealth Sharing:

§ The Two Multi-Donor Trust Funds (MDTFs) for North and South have been established.

§ National Petroleum Commission has been established and commenced working out details and modalities of its mandate.

§ The Financial and Fiscal Allocation and Monitoring Commission (FFAMC) has been established and will look into criteria for transfers to States.

§ Board of Directors and two Deputy Governors appointed for the Central Bank of Sudan (CBOS).

§ Bank of Southern Sudan established.

§ Consultations underway to establish the Joint Committee for monitoring and calculating the net oil revenue.

§ JNTT restructured to solicit and follow up on donor assistance flow and its equitable distribution.

§ Transfers of the GOSS share from oil revenue started.

Commissions and Institutions:

§ Most independent commissions and institutions established, including the Assessment and Evaluation Commission (AEC), the National Petroleum Commission (NPC), the Judicial Service Commission (JSC), the Cease-fire Political Commission (CPC) and the Technical Ad hoc Border Commission.

§ Political and Information Committee between NPC and SPLM established.

§ Joint Defense Board, Mine Action National Authority and National Population Census Council established.

There are several issues which are expected to be completed in the first quarter of 2006, including:

§ Completion of the work on the establishment and operationalizing the commissions, including the Human Rights, Land, Civil Service and Electoral Commissions,

§ Guaranteeing the rights of non-Muslims,

§ finalization of preparations for issuance of the new currency,

§ Scaled up progress on the implementation of the Abyei Protocol,

§ Finalize, approve and implement the Political Parties Act and National Elections Act, and

§ Establish and promote the National Languages Council.

II. Progress in Implementation

Government of National Unity (GNU)

A. Policy and Program Development Priorities:

The CPA undoubtedly provides a solid basis for consolidating peace and putting Sudan on a sustainable path to economic stability, democratic governance and poverty eradication by addressing the underlying structural causes of the conflict. It has importantly recognized the need for addressing disparities along regional, gender, urban and rural lines, and the needs for extension of basic social services. The framework of the CPA entrusts to the National Government immense responsibilities, including improving governance, facilitating an increased role for civil society, fostering an independent media, more equitable sharing of national wealth, and creating a system of decentralized government that allows for community-driven recovery and development. To deliver on these responsibilities, a considerable reorientation of policies and public spending toward poverty eradication programs is required, based on the overarching aim of attaining the Millennium Development Goals (MDGs).

Under the auspices of the Joint Assessment Mission (JAM), technical and policy discussions led to identification of and agreement on the following strategic objectives and development priorities for the National Government during the Interim Period:

1. Enabling consolidation of the peace, including implementing the range of measures outlined in the CPA, from the national level down to local peace building and reconciliation;

2. Improving governance, especially institutional capacity and public accountability;

3. Broad-based growth of income-earning opportunities, with a focus on smallholders, pastoralists, and private sector development; and

4. Expanding access to basic services in the Northern States – in particular access to basic health care, primary education and safe water and sanitation – to get efforts toward meeting the MDGs on track.

Making unity of the Sudan an attractive option for the people of the Sudan, particularly those of Southern Sudan, is an overriding and strategic objective for all levels of government during the Interim Period. The National Government is also responsible for ensuring implementation of the Three Areas Protocols in the CPA, which includes creating key institutions and commissions, facilitating IDP/refugee return and resettlement, enabling development and recovery in the transitional areas of Blue Nile, Nuba Mountains and Abyei.

There has been considerable progress in implementation of the CPA, despite some inevitable constraints. Key has been the adoption of the Interim National Constitution, which was a precondition for the establishment of the Presidency, formation of the GNU, and establishment of the majority of the independent institutions and commissions provided for in the CPA, including the Assessment and Evaluation Commission. The National Legislature has introduced a considerable amount of legislation, and adopted various laws consistent with the implementation of the CPA.

Despite this progress, there have been delays in both establishing and operationalizing vital commissions and institutions such as the Joint Defence Board and the National Human Rights Commission. The government recognizes that any new legislation must adhere to the provisions of the CPA, and should not be drafted independently of the National Constitution Review Commission (NCRC), whose involvement is constitutionally mandated. There is a need to initiate the envisioned national civil service reforms, dissemination of the CPA in the North, and national program of healing and reconciliation.

Nevertheless, the positive results mentioned above are undermined by the ongoing conflict in Darfur, and a positive solution to this problem is necessary if Sudan is to deliver on its promises in the CPA. Peace talks are currently underway in Abuja, helped by the positive involvement of the SPLM, and the GNU is committed to finding an inclusive and comprehensive solution to the problem.

The government recognizes that a key cross-cutting challenge is to instigate scaled up progress in the three areas, and especially Abeyei, which are accorded special status in the CPA in recognition of their unique situation in the prolonged conflict in the Sudan. The protocols on resolving conflict in Nuba Mountains, Blue Nile and Abyei provide a model for decentralized government, self-rule and peaceful co-existence based upon implementation of the CPA and the consensual sharing of resources to meet basic needs. The priorities identified in the JAM for the Three Areas include development of basic economic and social infrastructure, implementation of CPA, establishment of key institutions of governance and return and resettlement of internally displaced persons.

During 2005, there has been progress in the implementation of the CPA and establishment of key institutions in the Three Areas. In particular, the state governors were appointed, state legislative assemblies established, Abyei Boundaries Commission formed and presented its report to the Presidency, Blue Nile State Interim Constitution adopted and its state council of ministers appointed, Southern Kordofan State established in accordance with CPA and its interim constitution drafted. Given improved security situation after the CPA, a large number of internally displaced persons managed to return voluntarily to the Three Areas.

Despite this progress, there is no full functioning state government in Southern Kordofan and administrative vacuum has been created in Abyei Area by slow implementation of the Abyei Protocol (see the JAM Tracking Matrix). Despite the commitment in the JAM (the assessed needs of the Three Areas constituted almost 70 percent of total needs in the Northern States) and a clear provision in the CPA to avail additional financial resources, the budget transfers to the Three Areas were relatively small and even declined in 2005. While the budget allocation to the Three Areas decreased in 2005 by almost 25 percent (6 billion Sudanese Dinnars), the actual amount transferred by September 2005 was only 0.04 billion Sudanese Dinnar (less than 1 percent of what had been planned). With huge influxes of returnees, poor functioning governments and coupled with extremely limited financial transfers to the Three Areas in 2005, the provision of basic services, realization of peace dividends and development of basic economic and social infrastructure remain a real challenge and litmus test for the JAM commitments towards the Three Areas.

Looking ahead, the government is committed during 2005 to accord special focus on the Three Areas, with the following priorities:

· Adoption of Interim Constitution of Southern Kordofan State and formation of its Council of Ministers.

· Implementation of Abyei Protocol including establishment of Abyei Administration and Abyei Resettlement, Reconstruction and Development Fund and initiation of reconciliation and peace building in the area.

· Realization of transfers as per the 2006 budget commitment, and allocation and provision of additional financial resources as provided for in the CPA to support the full functioning of government and provision of basic services.

· Establishment of State Land Commissions.

· Media development, including for communication channels to enable safe return of IDPs.

· Establishment of DDR commissions.

· Scaling up the delivery of recovery assistance (EC/UNDP Recovery Project and Community Recovery Fund) and development of a locally led recovery strategy (Community Empowerment Fund).

B. Progress and Priorities at the Cluster Level

The following section focuses on the eight clusters assessed in the JAM, reviewing the progress made in 2005 and outlining the priority actions for 2006.

(i) Capacity Building and Decentralization:

Meeting the high expectations of the post-conflict period, and turning the devastation of prolonged conflict, inequality and underdevelopment into a new era of peace and prosperity requires an extensive capacity building effort at all levels of government and in the private sector in Sudan. Critical areas for capacity building as identified by the JAM include: the civil service; local government and service delivery; public financial management and procurement; and mechanisms to increase transparency and accountability.

Among several key achievements in 2005 were reformed institutions of governance in most Northern states, the establishment of the Joint National Transition Team, the FFAMC, the Planning Team for the National Civil Service Commission., Additionally, work on the framework for civil service reform—including defining the parameters for resizing the civil service and revising the pay structure—has been initiated with support from the LICUS Trust Fund. The national government nonetheless recognizes that more progress is needed in order to implement the basic provisions of the CPA relevant to this cluster. Most notable outstanding issues include the need for establishment and operationalizing of the Civil Service Commission and of a mechanism for initiating affirmative action in the national civil service.

Looking ahead, a comprehensive capacity building program will be launched in 2006 at all levels of government, and will focus on the following major actions: