South Sudan’s government has launched an initiative to transition the country to a cashless economy, encouraging civil servants to adopt electronic payment platforms.
This initiative, launched by the Ministry of Finance and the Central Bank, is aimed at improving transparency, reducing corruption, and simplifying transactions by promoting the use of commercial banks, online platforms, and mobile money transfers.
Although the proposal emerged two months ago, it was only formalized this week through a circular that recommends cashless transactions for salaries and other payments.
The shift aligns with recent economic developments, such as the South Sudanese Pound’s rapid appreciation against the US Dollar.
Several challenges in the country’s economy complicate the move toward cashless payments. Currently, only 10% of the population has access to formal financial services, and mobile phone penetration stands at 22% according to the World Bank.
Financial literacy is another obstacle, with only 28% of the population able to read and write, further limiting the adoption of digital payment platforms.
In spite of these challenges, Central Bank Governor James Alic Garang has urged commercial banks to simplify the account-opening process and collaborate with mobile money providers to ensure interoperability.
Finance Minister Marial Dongrin Ater has also highlighted the broader goals of this initiative, such as improving tax revenue mobilization, enhancing food security, and securing financial backing.
The government’s plan to pay civil servants’ salaries and operational costs for ministries and agencies through bank accounts is intended to increase financial efficiency and transparency while reducing the risks associated with cash handling.
Some citizens welcome these measures, citing the potential to reduce ghost names in payroll systems and improve accountability. However, concerns remain about the feasibility of implementing a cashless economy, especially in rural areas with limited banking infrastructure and internet access.
Economic analysts caution that the Central Bank must first educate the population about digital banking and reform the banking sector to ensure the success of the policy.
MTN South Sudan has expressed excitement about the policy, noting that it will make digital payments more accessible to consumers and merchants.
