African Development Bank helps modernize South Sudan's financial systems

The African Development Bank Board out of 17^th In July 2019, $ 6.6 million was approved for financing the South Sudan Payment and Settlement Systems Integration Project. The project is in line with the Bank's updated country strategy paper, which focuses on strengthening the state through capacity and infrastructure development. The project is also aligned with the South Sudan National Development Strategy 2018-2021; the latter confirms the need to restore and maintain economic infrastructures.

The objective of the project is to modernize payment systems in South Sudan in order to improve the country's financial systems and promote regional integration. To this end, the project will help South Sudan to develop and harmonize its payment systems with those of five East African Community (EAC) member countries, thus facilitating progress towards monetary union within the EAC and the intensification of trade and economic exchanges. activities in the region. For South Sudan, the development of real-time gross settlement and other components of the project will improve the efficiency of financial intermediation, improve the management of systemic risks and promote liquidity management, the implementation of implementation of monetary policy and the strengthening of the financial sector. .

The recently approved project complements the ongoing project of integration of EAC payment and settlement systems (EAC-PSSIP) and support to Southern Sudan, which is closely aligned with the 4^th The EAC Development Strategy (2011/12 – 2015/16) and the EAC Common Market Protocol, which focuses on Trade Facilitation, a Single Market for Financial Services, a Monetary Union of EAC and infrastructure connectivity in regional development initiatives.

The implementation of the new project will begin during the 2019-2020 biennium and the EAC secretariat will coordinate the implementation of the project, in close collaboration with the Central Bank of Southern Sudan.

Once completed, the project will have produced a modernized payment system for South Sudan, a central bank with increased supervisory capacity, as well as policies and regulations to support payments and settlements. These achievements will enable South Sudan to better interconnect with other East African countries to facilitate the transfer of funds through the East African Payment System Platform. (EAPS).

The director of the Bank for South Sudan, Benedict Kanu, said that "the modernization of payment systems to strengthen the performance of the financial system will not only increase the formal financial sector, but also encourage regional integration. In addition, the links between financial inclusion and inclusive growth will benefit the people of South Sudan by helping them to invest more in their economy. "

He added that the activities of the proposed project would not only promote better governance in the financial sector, but would also improve access to essential credit, thus enabling businesses, especially SMEs, to develop, create jobs and boost growth.

Currently, South Sudan's economy relies primarily on cash accounting, with very little use of commercial bank checks. Banks are the leading providers of payment services in the country. 29 commercial banks are allowed to operate in South Sudan, six of which are foreign-owned companies. Local banks are mainly branches at a branch, whose main activities are foreign exchange transactions. Appropriate regulations have been developed and it is envisaged that mobile payment and banking services will be launched by several banks as soon as the regulatory framework is ratified.

Since 2012, the Bank has provided over $ 160.55 million in development badistance to various sectors in South Sudan. Bank support has focused on capacity-building and infrastructure development, with a focus on creating conditions conducive to the promotion of peace, stability and state building, in accordance with strategic priorities of South Sudan and the Bank.