Inside Africa: Sudanese Bank Partners With Mastercard

bgblue/FIB/Mastercard

Faisal Islamic Bank of Sudan (FIB), one of the country’s largest lenders, has recently become the first indigenous bank of Sudan to obtain a card issuing and acquiring a license from the US credit union Mastercard in partnership with Network International, the leading enabler of digital commerce across Africa and the Middle East. Until now, it was impossible to use a Sudanese bank account abroad. This partnership will allow customers to make global transactions for the first time in the country’s history. 

This partnership acts as a momentous milestone for Sudan, which since the fall of dictator Omar al-Bashir in 2019, has taken drastic steps to rejoin the global financial system. Aside from traditional Gulf partners, Sudan has attracted very little foreign investment over the past three decades as businesses were unable to send money to and from the country. Many financial institutions were unable to lend or offer services to customers during the harsh economic and political conditions of the Bashir regime.

Battered by worsening inflation, the Sudanese transitional government declared an economic state of emergency in September 2020. This declaration follows months of accusations by the transitional government that its opponents have been actively sabotaging the economy by artificially inflating currency exchange rates and gold prices, triggering a decline of the Sudanese pound. 

When Abdalla Hamdok took over as prime minister in 2019, he vowed to make peace and rebuild the impaired Sudanese economy. Since taking office he has passed a variety of reforms to do so, including a peace deal with Sudan’s rebel groups and ending decades of Islamic rule. These reforms act as steps in the right direction, and solidifying economic stability will in turn keep civil unrest at bay.

“We have inherited a broken system, so it’s full of institutional weaknesses,” noted Adam Elhiraika, the prime minister’s economic adviser, “there’s a cycle of inflation and exchange rate depreciation that needs to be broken.” 

Sudan has been isolated from the international financial system since the imposition of economic sanctions by the United States since 1997, as well as its spot on the US’ state sponsors of terrorism (SST) list in 1993. These crippling sanctions were not lifted until 2017, allowing US citizens and businesses to trade and do business with entities in Sudan. The US also announced Sudan’s removal from its SST list in December, which had been blocking programs with global lenders like the World Bank and International Monetary Fund (IMF), as well as global transactions with local banks. Lingering effects of these sanctions still exist to this day, as emails sent to Sudan regularly bounce back and international money transfers are rejected by banks. This gatekeeping from the international market has proven to continually push the Sudanese economy backward in their fight to regain economic stability. 

“The biggest challenge we face is the economy, by far,” Elhiraika stated. “The economic challenges are overshadowing a lot of achievements made in other areas.”

Given Sudan’s ongoing economic transition, foreign interest and investment appear to hold the power to boost the state from the debris of the Bashir regime, which was notorious for pinning major powers against each other for his own economic and political agenda. The country’s radical Islamism brought by US sanctions and autocratic rule limited international capital and the prospect of economic diversity — new wealth went largely to the security apparatus, the government-created ruling party, and ethnic and regional friends. 

This transitional era Sudan is entering marks the time for social, political, and economic change, with an emphasis on putting the needs of the Sudanese populace first. To restore the economy, the current transitional government will have to prioritize cleaning up corruption, revive crippled markets, and attract investment for productive jobs for underemployed, educated young people who have been the backbone of the uprising. What the state needs most right now is the opportunity for economic growth, and foreign interest in the region appears to deliver some wave of promise.

“Sudan is a wealthy country that was ruled by thieves for 30 years,” stated Amjed Farid, assistant chief of staff to the Sudanese prime minister, “It was a cake that many actors thought they could have a part of.”

This new partnership with Mastercards appears to be a step in the right direction to bring the Sudanese economy in from the cold. According to the World Bank’s Trading Across Borders 2020 indicator, Sudan ranks 171 out of 190 countries regarding ease of doing business. This partnership with Mastercard opens up more convenient channels for Sudanese civilians and businesses to engage in the global market, further expanding Sudan’s economy outside its borders. It is hoped that more Sudanese banks will continue to enter partnerships with global financial giants such as Mastercard and Visa to continue to bring a wide range of services to the private sector and domestic market across the state. 

“We are delighted to partner with Mastercard and Network International for this huge milestone, which will enable the bank’s customers to withdraw funds from ATMs globally, shop online, and transact at millions of merchants around the world that accept Mastercard payment cards. Faisal Islamic Bank is fully committed to broadening and growing the payments landscape in Sudan, which will have a positive impact on the economic growth of our nation,” stated Moawia Ahmed Elamin, CEO of FIB, in a recent press release.