Digitization’s role in Sudan’s economic transformation
Presented with a Sudanese-issued Visa card on March 14 20211, Sudanese Prime Minister Dr. Abdalla Hamdok marked a pivotal moment in the country’s reintegration into the global economy and the accelerating progress of financial inclusion in one of Africa’s largest markets.
Dr. Hamdok’s Visa card is a symbol of Sudan’s long-awaited reassimilation into the global economy. It also opens the way to a transformation of the county’s financial system, bringing benefits for every Sudanese citizen.
For decades isolated, Sudan has been gradually reintegrating back into the global economy, with international sanctions progressively lifted from 2017 and a new government installed in 2019. With a population of close to 45 million2, Sudan is one of the ten most populous countries in Africa3, with tremendous economic potential. It has abundant natural resources, including oil and gold, a tenth of the world’s unused arable land4, and access to the rapidly-growing markets in Africa and the affluent economies of the Gulf. Both international financial institutions and commercial banks are re-engaging with the country, and Visa is among the global investors that believe in the positive outlook for Sudan.
The Government has put the modernization of the financial system at the heart of its agenda. Floating the Sudanese pound in February 2021 drew $500 million5 into the formal system in just four weeks; a crucial move in securing much-needed debt relief and underpinning investor confidence. Moving from cash to responsible digital payments is central to this broader economic and social agenda. In June 2021, Sudan joined the United Nation’s Better Than Cash Alliance, which will support its efforts to increase financial inclusion and digitalization, including the establishment of a Digital Transformation Agency.
Currently only 15% of Sudanese adults have a bank account6, yet 60% of the population are under 247, a youthful demographic that is increasingly tech-savvy. The mobile penetration rate is 76%8, above the Middle East and North Africa average of 64%9, and it is increasingly clear that digitalization can bridge the gap in bringing banking services to consumers as payment apps and mobile wallets have far greater reach than traditional banks. As elsewhere, the COVID-19 pandemic has accelerated the trend of going cashless – a trend that is particularly impactful in Sudan, where shortages of banknotes are not uncommon.
Visa is taking the lead as a first mover in digital payments in Sudan. It is already working with eight licenced partners in the country and launched a full suite of products10 with the Bank of Khartoum in September alone. The card used by Prime Minister Hamdok was issued by United Capital Bank, another leading player. Om Durman National Bank has also launched in-market11, with another five issuers close to launch. In August 2021, Visa’s Regional President for Central and Eastern Europe, Middle East and Africa, Andrew Torre visited Sudan to reaffirm the company’s commitment to working with local partners to expand access to digital payments.
Image of Visa’s Country Manager for Sudan, Ahmed Mohey; Visa’s President for CEMEA, Andrew Torre; Sudan’s Prime Minister, Dr. Abdalla Hamdok; Visa’s Country Manager for North Africa, Ahmed Gaber; and, Visa’s Head of Government Engagement for GCC & NALP, Raed Hergli (from left to right).
“Visa is committed to being a part of Sudan’s economic transformation by bringing our global expertise and capabilities to its Government and private-sector partners, delivering global access and state-of-the-art solutions to Sudan’s consumers and merchants,” Torre said.
“Our engagement in Sudan is huge,” says Ahmed Mohey, Visa’s Country Manager for Sudan and Libya. “We have every single department in the company involved, with product and marketing teams working hand-in-hand with clients, explaining the benefits of products, and when to launch them.”
Visa’s focus is to drive acceptance of digital payments through traditional ATMs and POS networks while finding opportunities to launch new products and services to Sudanese customers and merchants. In August 2021, the company signed a memorandum of understanding with mobile operator Zain to provide electronic financial services to the latter’s customers. Zain, with its wide network and large consumer and business subscriber base, will partner with Visa to deliver financial services and digital payments to millions of consumers and sellers who have not had access to the global financial system.
“Everyone I’ve met in Sudan wants to see how they can transform into a digital society,” says Mohey. “Banks, fintechs, and the Government see opportunities working with global counterparts.”
Payments within, to, and from the Government sector account for a significant proportion of monetary transactions, providing huge opportunities for reducing use of cash and creating a more secure e-payment infrastructure. Shifting to electronic transactions would lower risks of corruption, money laundering, and general leakage. These have historically been issues in Sudan and which the government is committed to addressing, with the support of international partners.
“Consumers have also been quick to embrace the introduction of new payments systems, many using their Visa cards on global portals such as Netflix, Amazon, and airlines websites”, says Mohey. Unbanked customers can use prepaid cards for transactions, and the appetite for mobile transactions is particularly strong. Visa customers have the protection of 3D-Secure technical protocols that are the most advanced in the world.
Visa sees a bright outlook for Sudan because the country’s goals dovetail with Visa’s - unlocking opportunities presented by the digital economy is fundamental to its mission and business. Visa aims to continue to enhance its services to ensure that Sudanese customers have access to reliable, convenient, secure, and globally accepted digital payments. This will enable consumers to have safer and more convenient ways to pay, enable businesses to raise growth, and help the Government to fraudulent transactions, raise tax receipts, and deliver public services more efficiently. Throughout, Visa will be there for its growing pool of Sudanese clients.
“As a global engine of commerce, we are committed to partnering in support of Sudan’s transformation goals and advancing our mission to expand access and global economic inclusion so that more consumers and businesses can enjoy the benefits of digital payments,” says Visa’s Regional President for Central and Eastern Europe, Middle East and Africa, Andrew Torre.
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1 Teller Report, March 2021; https://www.tellerreport.com/news/2021-03-15-%0A---hamdok-receives-the-first-bank-visa-card-issued-inside-sudan-in-24-years%0A--.H1-W_zc37d.html
2 World Bank; https://data.worldbank.org/indicator/SP.POP.TOTL?locations=SD
3 World Population Review; https://worldpopulationreview.com/country-rankings/countries-in-africa
4 Chatham House, May 2021; https://www.chathamhouse.org/2021/05/unlocking-economy-strengthens-sudans-transition
5 Interview with FDI Intelligence, August 2021; https://www.fdiintelligence.com/article/80181
6 Interview with FDI Intelligence, August 2021; https://www.fdiintelligence.com/article/80181
7 World Population Review; https://worldpopulationreview.com/countries/sudan-population
8 Data Reportal 2020; https://datareportal.com/reports/digital-2020-sudan
9 Digital Market Intelligence, 2018; https://www.digitalmarketingcommunity.com/researches/the-mobile-economy-middle-east-and-north-africa-2018-gsma-intelligence/
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