Digitization’s role in Sudan’s economic transformation

Published on March 30, 2023

The Sudan Prime Minister, Dr. Abdalla Hamdok, was given a Sudanese-issued Visa card on March 14, 2021. The visa card signifies the crucial moment in the country’s rejoining the global economy and the increasing progress of financial inclusion in one of Africa’s biggest markets. It also ushers the country into a transformation that’s beneficial to the country’s financial system and all the Sudanese citizens.

For years, Sudan has been left out, but recently, they’re retaining a spot in the global economy, with international sanctions progressively lifted from 2017 and a new government since 2019. Sudan has a population of over 45 million people, making them one of the countries with enormous economic potential. It has enough natural resources, such as gold, and they have access to Africa’s largest market. Both international financial institutions and commercial banks are collaborating with Sudan, and Visa is one of the top global investors that believe in Sudan’s potential.

The government has prioritized the modernization of the country’s financial system. The Sudanese government invested 500 million dollars in February 2021; this was a strategic move in securing urgent debt relief and underpinning investor confidence. The switch from cash to digital payments is crucial to the country’s economic and social agenda. The Sudan government joined the United Nation’s Better Than Cash Alliance in June 2021; this collaboration will support their efforts to boost financial digitalization, including the launching of a Digital Transformation Agency.

In Sudan, only approximately 15% of adults have a bank account, yet the majority of the population is below 24, which means they have a youthful demographic that is digitally inclined. Digitalization can facilitate banking services by making them accessible to citizens as payment apps and mobile wallets. These platforms are more effective than traditional banks. Also, due to the outbreak of the Covid-19 Pandemic, the government has accelerated its pursuit of digital transformation in its financial sector

Visa is leading other global investors in digital payments in Sudan. It has already collaborated with eight licensed partners in the country and created a full suite of products in September with the Bank of Khartoum. United Capital Bank, another top investor, issued the card used by the Prime Minister. In August 2021, Andrew Torre, Visa’s Regional President for Central and Eastern Europe, Middle East, and Africa, paid a visit to Sudan to reaffirm the company’s commitment to collaborating with local partners to increase access to digital payments.

Visa aims to ensure that Sudanese citizens accept digital payments through traditional ATMs and POS networks while looking for an opportunity to launch new products and services for Sudanese citizens. In August 2021, the company collaborated with Zain to provide electronic financial services to Sudanese citizens. Zain has a wide network coverage and a large consumer base; hence it will partner with Visa to deliver financial services and digital payments to many customers and sellers who lack access to the global financial system.

Digitally Transforming Sudan’s Economy

For the past ten years, Sudan’s economy has suffered rising inflation, oil price fluctuation, sanctions, and institutional crises. The Sudan government has set out to make institutional reforms and has adopted a Five-Year Economic Reform Program (2015-2019). The reforms are meant to boost national production, improve the country’s exports and reactivate the accession to the WTO.  

However, improving Sudan’s economy through trade is not as easy as it sounds. The World Bank’s “Trading across Borders” indicator place Sudan at 185 out of 190 countries.

The cost of importation and exportation in Sudan is way more costly than in another country.

As economies globally are operating an electronic form of commerce, the current WTO accession process is the chance the Sudan government has to introduce e-commerce and trade facilitation into its plans for the country. In Africa, cross-border e-commerce is expected to improve by 25% annually or twice the growth rate of domestic e-commerce. Regional and global trade through e-commerce will help to boost gains for both micros, small and medium-sized enterprises (MSMEs) in Sudan.

According to some studies, the introduction and development of e-commerce in countries like Bangladesh and Cambodia have enabled businesses to boost and expand their exports. Growth in e-commerce is when there’s a positive increase in exports, both in high value goods and common products.

Sudan has a high chance of being successful with the introduction of e-commerce into its government. Due to its phone penetration of 70.4%, its citizens have more internet access, which will make up for the lack of e-payment systems, high cost of access to bandwidth, and limited financial inclusion. Also, adopting the cash-on-arrival method will compensate for the deficiency in financial inclusion.

Conclusion

As a country, Sudan has a lot of catching up to do. Even among surrounding countries, Sudan is lagging in digital and technological advancements. To advance and introduce digital government into their system, the Sudan government has to invest significantly in digital transformation.

Sources

https://www.forbesmiddleeast.com/leadership/leaders-insights/andrew-torre-visas-regional-president-for-central-and-eastern-europe-middle-east-and-africa-age-of-access-unlocking-opportunity-can-bring-parity-and-prosperity

https://navigate.visa.com/cemea/inclusive-growth/digitizations-role-in-sudans-economic-transformation/

https://trade4devnews.enhancedif.org/en/news/digitally-transforming-sudans-economy

About the Author

Mohammad J Sear is focused on bringing purpose to digital in government.

He has obtained his leadership training from the Harvard Kennedy School of Government, USA and holds an MBA from the University of Leicester, UK.

After a successful 12+ years career in the UK government during the premiership of three Prime Ministers Margaret Thatcher, John Major and Tony Blair, Mohammad moved to the private sector and has now for 20+ years been advising government organizations in the UK, Middle East, Australasia and South Asia on strategic challenges and digital transformation.

He is currently working for Ernst & Young (EY) and leading the Digital Government practice efforts across the Middle East and North Africa (MENA), and is also a Digital Government and Innovation lecturer at the Paris School of International Affairs, Sciences Po, France.

As a thought-leader some of the articles he has authored include: “Digital is great but exclusion isn’t – make data work for driving better digital inclusion” published in Harvard Business Review, “Holistic Digital Government” published in the MIT Technology Review, “Want To Make Citizens Happy – Put Experience First” published in Forbes Middle East.

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