8th February 2025
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Economist applauds introduction of digital payment system

Author: Obaj Okuj | Published: February 4, 2025

Abraham Maliet Mamer, an advisor to Vice President Wani Igga speaks on Eye Radio's Sundown Show. Nov. 12, 2024. (Photo: Awan Moses).

An economist has commended the Bank of South Sudan for introducing the National Instant Payment System, saying it will reduce reliance on physical cash transactions and streamline banking processes.

Dr. Abraham Maliet said the system is a digital platform designed to facilitate instant financial transactions without cash involvement.

He explained that the system will allow users to conduct transactions using mobile applications, similar to a credit card, and this according to him will enhance efficiency in financial operations.

In interview with Eye Radio, Dr. Maliet said the digital system is expected to reduce reliance on physical cash transactions and streamline banking processes.

“This system is a system that deals with digital payment, instant digital payment. It does not involve cash transactions. So it is a digital, it is through a digital platform,” he said.

“So when you want to pay your bills or do large transactions, you apply, get that application, and then you are able now to transact your business transaction. So it is a payment system. It’s like you have a credit card.”

“Normally when you are buying things online, you put your credit number, your password or whatever that is, and then you click, then the money is withdrawn from your card, which is exactly the same thing, but in a simplest way through your mobile phone.”

Mr. Maliet further noted that if South Sudan had a well-functioning banking economy rather than a mainly cash-based economy, the system would have been more effective in shortening transaction times and minimizing paperwork.

The economist cautioned that the system might not have an immediate impact on the country’s economy due to the predominance of informal financial transactions.

He pointed out that over 80% of South Sudan’s economy operates outside the formal banking structures, making it difficult for digital payment systems to penetrate effectively.

Dr. Maliet suggested that while the system could benefit small businesses and government institutions by facilitating seamless transactions, its effect on the broader economy will be limited.

“I think that the central bank is using it to avoid the shortfall in cash. You may be aware now, we have no cash in the circulation. A lot of money is out somewhere and nobody knows where they are.”

“If you print whatever it is, tomorrow it’s not in the bank circulation. So, maybe the bank wanted to say, look, I don’t need you to have cash. I can transact your money. Maybe if we need cash, then it’s up to you. But this is it.”

The economist also highlighted challenges to the adoption of digital system including limited smartphone access and digital literacy, particularly in rural areas where cash transactions dominate.

Despite its introduction, Dr. Maliet believes that system will have an insignificant impact in the short term, given the current economic structure of South Sudan.

However, he acknowledged that the initiative could contribute to the modernization of financial transactions if banking infrastructure and public trust improve over time.

 

 

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