This report attempts to diagnoseexisting constraints and prospects for growth inpeople's incomes in South Kordofan.Given the breadthand depth of difficulties facing the state, the focus is onidentifying the key areas of reform, or binding constraints,to growth. There is a combination of extremely low socialreturns, the prevalence of government and market failures,the weak investment climate and the limited access tofinance to be the primary constraints. In turn it issuggested that policy reforms directed to improvinggovernance, improving investment climate and pro-poor publicinvestment are priorities. One immediate priority pertainsto property rights issues which demands comprehensive landreform and clarification of customary land tenure and landdispute resolution mechanisms. Improving marketconnectivity, water resource management and farmproductivity also emerge as keys to enhancing the investmentclimate in the rural sector. In urban areas, improvedtransportation networks and access to finance will increaseprivate and social returns to investment. Efforts are alsoneeded to improve the transparency, predictability andlevels of intergovernmental transfers to promote pro-poorinvestment and developmental outcomes. It is suggested thatlocal revenue efforts can improve as and when local serviceprovision and governance are better established.There isrecognition that some initial improvements are alreadyunderway, including the roads from Dilling to Kadugli andKadugli to Kauda, and Kadugli to Dilling and Dilling toDashol, and the railway. Progress is expected to be visiblein 2008.
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