Why South Sudan’s mobile money absorption will wait for boom

Why South Sudan’s mobile money absorption will wait for boom
Mobile money has changed the way people transact business across the world. [ Courtesy]

Mobile money has been touted as a viable solution to lower cash assistance risks and improved cash aid delivery in South Sudan.

It could thus provide a flexible and cost-effective means of delivering effective and dignified cash support to poor and vulnerable households in the country, based on similar experiences from elsewhere in East Africa, particularly Somalia.

By removing the need for ‘middlemen’ or ‘gatekeepers,’ it can help to reduce leakages.

The Bank of South Sudan granted licenses to two third-party companies to build mobile money services by the end of 2018, with services expected to debut in June 2019. Trinity Technologies and Lukiza (also known as ‘Nilepay’) are two of them.

South Sudan’s communications regulator awarded the country’s first two licenses for state-wide mobile money services in an effort to minimize the country’s reliance on physical cash.

Consumers in Juba, the country’s capital, could transfer money using a platform developed by MTN Uganda and Safaricom’s m-Pesa prior to the debut of regulated services. Originally, these services were designed to facilitate remittances from neighbouring countries.

However, a money transfer and mobile money dealer in Juba told The City Review that most mobile transfers in the country are made in South Sudanese Pounds, with the exception of m-Gurush.

South Sudan’s first mobile money provider, m-Gurush, established an international money remittance service in 2020, allowing its registered users to send and receive money within the East Africa region and beyond.

Customers can now send and receive money digitally in the form of US dollars and South Sudanese pounds to and from a myriad of destinations across the world through international remittance.

According to the company, the service will help m-Gurush clients, particularly businesses and traders transporting money from South Sudan to Kenya, Uganda, and the rest of East Africa.

According to Joseph Kwaje, deputy manager of a competence enterprise at the Custom Market, they primarily send SSP and exchange the equivalent of money whether in Kenya, Uganda, or Tanzania.

He further said that they do transfer foreign currencies like Kenyan shillings on occasion, but not all of the time because retaining them loses value owing to the dollar’s unpredictability.

“For mobile money, we are working well even with m-Gurush. We do use to do that, but there are shortages in m-Gurush in terms of capital. Most of the agents do not have a lot of capital to operate the business”

Mobile money can help with cash distribution in remote or inaccessible places, as well as reducing transfer and logistical costs, where network coverage allows. Mobile money can help lessen the ‘push-and-pull’ impact associated with defined cash distribution places by giving aid straight to a recipient’s mobile device. Finally, using mobile money may increase the use of digital financial services, resulting in greater financial inclusion for the unbanked.

South Sudan did not have any formal mobile money services as of May 2019. Two firms, on the other hand, were granted licenses and started operation at the end of June 2019.

In South Sudan, much of the economy and trade is still informal and relies on cash. Mobile money systems that are well-developed, on the other hand, can help to formalize the economy by integrating informal sector users into business networks, formal banking and insurance, and connecting to the government through social security, tax, and safe wage payments.

Mobile money barriers in South Sudan

South Sudan has a low mobile penetration rate, with GSMA intelligence indicating the country had 1.2 million unique users in Q3, despite a population of 13 million people according to the UN. Its two operators, MTN and Zain, are roughly evenly split in terms of numbers.

The South Sudanese public appears to be interested in mobile money services, according to evidence World Bank report indicate. For starters, the development of informal, or proxy, mobile money providers shows that individuals are looking for new ways to send money.

Secondly, mobile money services appear to be recognisable to a considerable portion of the South Sudanese people, owing to displaced family members seeking safety in neighboring countries, as well as trading across South Sudan’s borders in Kenya and Uganda.

Trust in mobile devices and digital financial transactions is high, with 70 per cent of the population believing that their phone can be used to store and transfer money, and 66 per cent believing that their phone can be used to receive salaries or allowances – though this percentage drops for the most vulnerable respondents and women.

People in South Sudan have insufficient awareness of financial services, resulting in a low level of financial literacy. According to a World Bank study, half of the people polled have never heard of insurance or loan services, and a third have never heard of savings services.

Financial literacy is low across the board, regardless of age or kind of housing (rural, urban, PoC site). There are, however, significant disparities by gender, literacy level, and county. Men are more likely to be aware of the existence of various financial services. Literate persons, predictably, have a higher level of financial literacy.

South Sudan’s infrastructure is among the world’s poorest, 52 contributing to structural impediments that could stymie the development and use of mobile money services. These structural hurdles are exacerbated by ongoing political uncertainty and instability, which frequently disrupts, if not completely halts, private sector activity and infrastructure investment. 

The greatest structural constraint is a lack of network coverage.

The network’s quality is poor or extremely poor and the network is sometimes shut down, according to.

Qualitative research indicated that network quality is frequently insufficient for basic activities, and that users are forced to make calls late at night to avoid network congestion. In rural places, network quality is substantially worse, and residents must drive considerable distances to reach a location with good coverage.

In comparison to 22 per cent of urban inhabitants, 33 per cent of rural dwellers believe the network is bad or very poor. Furthermore, 74 percent of rural individuals, compared to 44 percent of urban residents, must drive at least 30 minutes to reach an appropriate network. Inadequate network quality has a significant negative influence on the possibilities for mobile money acceptance and uptake, said World Bank.

Lack of access to electricity for charging phones is also a major stumbling block, especially in rural areas. Electricity was noted as a hurdle by 37 per cent of the population. Similarly, rural populations have substantially less access to electricity than urban residents, with 65 percent of rural households having no access to electricity (versus 45 percent in urban areas).

A key structural hurdle, particularly in rural regions and among women, is the low level of phone penetration. In fact, rural respondents see a lack of a cell phone as a hindrance, compared to city dwellers. Similarly, women view a lack of mobile phone as a barrier to using mobile money services more than men, according to the bank.

The widespread adoption of mobile money services is also likely to be hampered by high levels of general and financial illiteracy. Despite the widespread illiteracy, only a quarter of the respondents believed that illiteracy may be a major hindrance to mobile money adoption. Women regard literacy as a major hurdle, compared to males and rural dwellers are the groups who are most affected by this barrier.


The main advantages of mobile money are related to its efficiency, since it is a quick, simple, and inexpensive method of money transfer.

The following Using mobile money as a delivery mechanism, increases effectiveness. increase cost efficiency, improved safety and protection for beneficiaries and project staff, reduce leakage risks, and lower opportunity cost of cash transfers for beneficiaries.

Personal remittances transport more than $500 billion in value cross-border each year. In most situations, remittances are monthly money transfers from international workers to family members in their home country.

Those who can least afford it – the world’s 1.7 billion unbanked adults – pay high fees to use traditional Money Transfer Operators (MTOs).