In late 1990s, mobile technology helped Africa take a huge short-cut in catching up with the rest of the world in giving people access to affordable communications. During the past decade, financial technology firms (fintechs) have come up and jumped onto this infrastructure to widen the scope of financial services, allowing those without bank accounts to carry out simple everyday transactions.

Mobile money is the obvious example, but development of new applications has also ushered in a host of other options, including micro-loans. The upside in all this, is that not only have fintechs contributed greatly to financial inclusion across Africa, but people are opening up bank accounts to benefit more from the bank-to-wallet or wallet-to-bank services. The levels of convenience and security have been heightened, because people need not have to move around with cash all the time.
Consider this fact– according to Central Bank of Kenya figures, during 2018 Kenyans moved nearly the equivalent of 50% of the country’s GDP through their mobile phones.

South Sudan is unfortunately lagging compared to its neighbours. However, this is a country that offers endless possibilities, not only for investors, but also to its citizens whose lives can be transformed by fintechs riding on a mobile telecom infrastructure boom. Fintechs offer reduced costs, easy accessibility, speed and relative security. For a large, natural resource country like South Sudan, these are important factors that can help in financial deepening which is critical for sustained economic growth. According to the World Bank, almost 80% of the working population in South Sudan, the East African Community’s youngest state, still keep their money in their homes and only about 20% of the population live in urban areas with some access to banks.

This is majorly because most of them lack access to banks. According to the Bank of South Sudan, the country has 29 licenced banks which are mainly concentrated in the urban centres, especially Juba. The banking sector in South Sudan is led by two Kenyan banks, Equity Bank and Kenya Commercial Bank. The rest of the banks are one branch operations mostly used for ‘at the counter’ cash transfers and forex exchange dealings. Penetration of the banks in rural areas is negligible. Since South Sudan gained independence in 2011, the country has been trying to rebuild its economy that was disrupted by many years of civil war that claimed over 400,000 people and almost destroyed the economy completely.

FinTechs should be supported and helped to grow to deepen financial Inclusion and encourage the population to bank formally.
FinTechs such as Mobile Money, Agent Banking, Mobile Banking, Internet Banking, Borderless banking and others would help the population to participate in e-commerce and provide affordable access to formal banking at the convenience of their mobile phones which will eventually lead to having bank accounts.

The primary challenges to the fintechs in South Sudan are the lack of supportive infrastructure such as internet connectivity, electricity, mobile network connections, labour or talent, supportive policies and the availability of affordable mobile phones. These are areas where the government and development partners can offer support for fintechs to take off. In addition, the majority of the population lack the necessary documentation to register for fintech services like mobile money and banking services. According to government officials, only 16% of the population have identification cards.

According to the National Communications Authority of South Sudan, there is a significant amount of activity within the country’s ICT sector, particularly efforts to expand broadband connectivity and mobile services. Also under the Northern Corridor integrated project, telecommunication companies in Rwanda, Kenya, Uganda are able to operate under a one network area which allows receiving calls and SME’s at a relatively affordable tariff across the countries but also allows some one in South Sudan to receive money on other countries’ communication lines.

In 2019, South Sudan celebrated a rare advance in technology as it launched a nationwide system for mobile money transfers, M-Gurush. The platform allows customers to send and receive money across South Sudan and other neighbouring countries as well as pay for goods and services across South Sudan, similar to platforms in Kenya, Uganda and other African countries. While a 2018 peace deal allowed for such a service to be rolled out across the country, there are still infrastructure challenges. The majority of the population will not be able to use mobile money services because the mobile network coverage is limited to a few urban areas and other areas along the main road. Before fighting began in 2013, Zain covered nine out of 10 states with almost 400 cell towers across the country; however, half of these towers have since been damaged or destroyed and less than 200 are currently functional.

In February 2020, just before Covid-19 began to spread across Africa, Liquid Telecom completed a cable link between Juba and the company’s submarine landing station at Mombasa. It is South Sudan’s first direct international fibre link intended to drive down retail prices for internet services. However, one major impact of the pandemic is a sudden lull in further investments coupled with declines in demand due to job losses which have directly affected incomes.

Investors are now binding their time. At the centre of their concerns is an agreement on a lasting peace, the only way South Sudan’s economic potential can be fully unleashed. According to one industry report, ‘Growth in the sector in coming years is premised on a resolution to the political crisis and a recovery of the country’s economy. The virtually untapped internet and broadband market also depends to a large extent on the country gaining access to international fibre optic cables and on a national backbone network being in place. Sophisticated infrastructure solutions are needed to reach the 80% of the population that live outside of the main urban centres. With a negligible rate of bank account ownership, mobile payment and banking solutions also have a strong potential once a reliable mobile infrastructure is built.