# 5. Conclusion and Policy Implications

In this paper, we discussed the incidence of shocks in Sudan by combing two household survey datasets collected in 2009 and 2014/15. By combining both rounds of data, we were able to highlight the main shocks affecting Sudanese households, the coping strategies available to and used by these households as the heterogeneity in the incidence of shocks across space (rural/urban, states, and so on), and household attributes such as livelihoods and poverty status. Drawing insights from these descriptions (such as the type and intensity of coping strategies used, the category of households mostly affected by shocks), we profile households who are likely to be resilient or vulnerable to shocks.

In the second part of the paper, we used the latest round of the data to estimate the impact of shocks on the welfare of Sudanese households. Since the impact of shocks is likely to vary across specific types of shocks and across indicators of household welfare, we consider this multidimensionality in our analysis. We also consider the heterogeneity in the impact of shocks across households distinguished by space, livelihood, use of coping mechanisms, and access to credit and informal systems of support.

The results indicate that poor agricultural rural households are most exposed to idiosyncratic shocks in general and agricultural-related shocks such as crop or livestock loss. Most of these households rely on assistance provided by family/friends, NGOs, or the government as well as on selling their assets or dissaving to cope with shocks. The fact that these strategies may be insufficient to fully mitigate the impact of shocks and enable households to escape poverty shows the need for social protection programs to reduce vulnerability and build resilience.

In terms of the impact of shocks, weather-related shocks such as floods/droughts have the largest negative impact on household welfare. On average, households affected by floods/droughts experience a 5.3 percent decrease in consumption per capita relative to those not affected by shocks. They also experience a significant decrease in their assets and are more likely to be poor and have a low dietary diversity. The effect of shocks on consumption per capita is particularly more pronounced among households in Khartoum, Northern, and Darfur regions of Sudan (where flood/drought-related shocks are commonly reported) and business owners and wage/salary-dependent households. The large negative effect of floods/droughts is possibly driven by the fact that Sudanese households rely on help provided by family members, friends, NGOs, or the government and the sale of assets or dissaving to mitigate the impact of shocks. Since floods/droughts are likely to be covariate in nature and likely to result in the destruction assets, the mere exposure to these shocks equally reduces the capacity of the affected households to mitigate the impact. Thus, although the use of these coping mechanisms can reduce the impact of shocks on household welfare, it is likely to be temporal and insufficient. Furthermore, the longterm consequences of these strategies such as the possibility of poverty traps show the need for social protection programs. The results from the analysis have policy implications.

First, ongoing reforms to restore macroeconomic stability and spur growth must be reinforced to strengthen the resilience of Sudanese households. These reforms must continue to tackle emerging challenges such as rising prices and volatile exchange rates; increase economic opportunities such as jobs; and ensure the provision of social services such as education, skills and capacity building. For agricultural households who face significant exposure to rainfall related shocks, these reforms will strengthen their resilience by reducing income fluctuations and facilitating the diversification of economic activities. They 46