Interview with Omer Omarabi: Using FinTech in Sudan’s Economic Response to COVID-19

COVID-19 Africa Watch speaks to Omer Omarabi, the General Manager of Electronic Banking Services Sudan, about how financial technology has played a role in Sudan’s COVID-19 response initiatives.

Interview

Key Takeaways

The following are a few of the main takeaways from COVID-19 Africa Watch’s conversation with Omer Omarabi, General Manager of Electronic Banking Services Sudan:

  • COVID-19 responses must do two things at once: ensure physical safety of workers and ensure the continuity of essential services, including payments and financial services. The first is integral to the second.
  • In Sudan, the pandemic has prompted a 64 percent increase in person to person mobile transfers.
  • FinTech solutions will have an ongoing role to play in facilitating ongoing economic activity as well as government stimulus transfers to citizens.
  • Although Sudan has 8 million citizens living abroad, international remittances are still effectively blocked due to the country’s designation, by the U.S., as a state-sponsor of terrorism. The infrastructure, though, is in place to facilitate a large inflow of remittances if/when the designation is lifted.

The interview was conducted by Ahmed Aboshock, an IFC-Milken Institute Capital Market Scholar from the Central Bank of Sudan. A transcript is available below.

Transcript

Interviewer

My name is Ahmed Aboshock and I am an IFC-Milken Institute Scholar from the Central Bank of Sudan. Today with us, we have Mr. Omer Omarabi, General Manager of Sudan’s Electronic Banking Services Company (EBS), the company responsible for online payments and banking systems in Sudan, operating under the control of the Central Bank of Sudan.

Since the beginning of the COVID-19 pandemic outbreak around the world in early 2020, the World Health Organization (WHO) had been cautioning again the use of physical currency as one of vectors of infections. The WHO appealed to governments to create policy measures, to reduce cash transactions and find alternatives for it. Due to this many African countries are launching new measures, including expanding the use of FinTech.

Mr. Omarabi, thank you for being with us today.

Omer Amarabi

Thank you for having me.

Interviewer

To start, can you briefly tell us a bit more about EBS? When was EBS created and what do you do?

Omer Amarabi

EBS is a national company established in 1999 by the banking system, which is the Central Bank and the bank union, to provide for the digital transformation of the banking sector. It is owned by the Central Bank and the bank union. There are around 200 employees currently in EBS. Most of them are technical people. EBS operates all of the electronic payments infrastructure in Sudan. That includes the check clearing system, SWIFT for international transfers, the national point of sales, mobile money transfer, and so on. EBS is also providing financial services for more than 122 FinTechs. We support all the financial services in a private cloud where the financial companies and banks can provide services to customers. EBS is also involved as an IT consultant for the government and semi-government institutions. So we work in a family subsidy program, also the subsidy program for COVID-19. We work with the Ministry of Finance for the treasury account and so on. In the first half of last year, EBS moved around $36 billion in electronic transaction, that includes check clearing, person to person transfer, etc.

Interviewer

What were the main policy measures that have been taken to mitigate the impact of the COVID-19 pandemic to FinTech in Sudan?

Omer Amarabi

That’s a good question. I think there are two main things every company should take into consideration. First, to reduce the risk on their employees and their customers. And second to ensure the services provided by the FinTech is maintained with the highest level of quality although there are some measures needing to be taken to for the employees’ wellbeing.

If we take the first thing, which is reducing the risk for the employees, I will take our company as an example. Since COVID-19 appeared, we started taking some measures to safeguard our employees. We started preparing people to work remotely from home. That includes providing them with laptops, access to networks, access to the company services, communication tools like Skype and Zoom and so on. We also retained the process and procedures of doing business, whether internally or with our partners and customers, and we tested this. So when the government announced the lockdown for COVID-19, by that time, 95% of our company employees were already working from home. So that allowed us to fulfill the second part, which is providing excellent services to our employees, because we prepared earlier, we solve all the problems of working from home earlier, and that allowed us to maintain the same level of service and the same quality.

Interviewer

Have you seen any visible change in use or the FinTech before and during the pandemic in Sudan?

Omer Amarabi

Yes, of course. The pandemic has a major impact in everything. I think that Sudan GDP is expected to be around a minus 7.2%, based on IMF estimates. That means that GDP is down by more than 10% of what was estimated at the beginning of the year. And of course that has a major impact in every business in the country. However, the informal sector, I think, is the one that is the most hit – because of the ban on foot traffic, which they need to get their business going. But the big companies have also had negative impacts because they rely on customers and the customer income went down, so that creates a major impact. The government tried to help the citizens. And our company helped with that. So we have more than 120,000 families now financially included and receiving subsidies as well.

Interviewer

What is the companies’ and citizens’ response in terms of payments?

Omer Amarabi

I expect after the pandemic, many companies are going to struggle to survive but also some companies are going to benefit from this emergency situation. We already experienced around 64% of person to person transfer increase, and we have experienced also around 43% increase in the point of sale. However since banks have reduced their activities by more than 50%, we saw a reduction of 30% in check clearing. I expect that the FinTech companies will rely on this opportunity, or they will look for an opportunity from this challenge by adopting electronic services, adopting eCommerce, etc. It has become evident that it’s one of the major tools to overcome the epidemic and also to evolve the economy after this pandemic goes way.

Interviewer

What’s your prediction on the evolution of FinTech after the pandemic in Africa in general and in Sudan in particular?

Omer Amarabi

FinTech has shown strong business resilience like in the telecom sector, electronic financial services sector, and mobile solutions, which has provided a lifeline for citizens during this emergency situation. I think financial inclusion and mobile solutions in developing markets like African countries definitely is going to be very important, and is going to play a major role for companies to thrive using partnerships and helping the economy on providing financial services for the people. Also they can work in helping distribute government aid and providing other utility services and other financial services to all people. And I think citizens who have now realized or benefited from digital tools to help them through this difficult time will continue to use them, because now they understand these electronic tools are providing them with benefits regardless of the condition that they are in.

Interviewer

Have you seen any impacts on remittances?

Omer Amarabi

We have the infrastructure to provide international remittances. For local remittances EBS provides remittances within Sudan. We call this person-to-person transfers and people benefit from it during this pandemic, and it’s increasing multiple times. However for international remittances, we have the infrastructure, but due to Sudan being in the State Sponsors of Terrorism (SST) list, that has prevented many banks and many international remittance companies to work with Sudan, except a few. We have had negotiations with Western Union to support that, but up to this point, this has not been successful.

But hopefully Sudan will be lifted from the SST list. Then at that point, we already have the infrastructure ready and we have more than 8 million Sudanese working abroad. We expect them actually to use the formal tools to participate in this. Sudanese for now are using informal tools to send money back to their families here, and these informal tools are impacted big time by the pandemic – because there is no travel, countries are not allowing people to fly in or fly out. And this prevented the informal way of international remittances to reach Sudan, which has actually impacted the economy as well.

But we have that infrastructure. We have the mobile services, we have the even connectivity with some international remittance companies – but they will not be able to activate these until either we get a clearance from the U.S. government, or Sudan is lifted from the SST list.

Interviewer

On behalf of the Milken Institute, I thank you again for these insights. Please keep up the great work and stay safe.

Omer Amarabi

Thank you very much. And I wish you well.

More analysis from COVID-19 Africa Watch:

COVID-19 Africa Watch tracks major developments and policy announcements from across the continent and also offers a curated selection of analysis on how the pandemic will impact African economies and development efforts. The site is a project of the Milken Institute’s Global Market Development Practice.

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