In a move that indicates deepening financial cooperation, the Central Bank of the United Arab Emirates (CBUAE) and the Bank of South Sudan (BoSS) have formalized a wide-ranging memorandum of understanding (MoU). This collaboration establishes a structured framework for enhancing security printing, card-based payment systems, and technical capacity in South Sudan’s banking sector. The signing took place in Abu Dhabi, with both nations’ senior leaders in attendance, reflecting the diplomatic importance of the occasion.
High-Level Witnesses and Signatories
The ceremony included significant dignitaries such as Sheikh Shakhbout bin Nahyan Al Nahyan, UAE Minister of State for Foreign Affairs, and South Sudan’s Vice President for the Economic Cluster, Benjamin Bol Mel. Representing the central banks were Saif Humaid Al Dhaheri, Assistant Governor for Banking Operations and Support Services at the CBUAE, and Dr. Addis Ababa Otto, Governor of the Bank of South Sudan, who affixed their signatures to the MoU.
Pillars of the Agreement
Security Printing via Oumolat
A stark component of the agreement is CBUAE’s pledge to bolster South Sudan’s banknote production capabilities. This commitment is channeled through Oumolat, a specialist security printing subsidiary based in the UAE. Through this initiative, South Sudan is ready to benefit from advanced printing technologies curated to curb currency forgery and reinforce the integrity of its currency.
Payment Card Systems Rollout in Two Phases
Another crucial element of the MoU is a cooperative effort to design a modern payment card system in South Sudan, led by CBUAE’s Al Etihad Payments subsidiary. This two-stage program includes:
- Phase One: Establishing a stringent system for switching and processing card-based transactions that will be ensuring these systems meet international benchmarks for speed, security, and data protection.
- Phase Two: Building out the local physical and technological infrastructure to process these transactions within South Sudan, therefore laying the groundwork for domestic financial autonomy and resilience.
Knowledge Sharing and Capacity Building
Beyond technology transfer, the MoU focuses on human capital development. South Sudanese officials from the banking and monetary supervision sectors will gain access to training led by the Emirates Institute of Finance, another CBUAE subsidiary. This exchange promises to upgrade institutional expertise, in alignment with global supervisory standards.
Broader Implications and Context
Currency Stability and Sovereignty
South Sudan’s financial system has long been challenged by hyperinflation and weak monetary governance. By partnering with Oumolat, a reputable security printing entity, South Sudan aims to advance banknote integrity and perhaps reduce reliance on external printing firms like De La Rue, a common partner for various developing nations. Establishing local processing capabilities may yield long-term gains in both cost efficiency and monetary control.
Digital Financial Infrastructure
Revamping into digital payments can drive financial inclusion, especially in regions where cash remains dominant. The two-phase approach, first enabling transaction processing, then localizing infrastructure, indicates a strategic roadmap for modernizing the country’s financial backbone.
Cross-Border Institutional Strengthening
The mutual sharing of technical knowledge, particularly in banking oversight and monetary operations, lays a foundation for institutional strictness. Training through the Emirates Institute of Finance highlights a longer-term vision, to cultivate home-grown expertise in line with global best practices.
Diplomatic and Economic Dimensions
This MoU transcends finance. It reinforces bilateral relations. Through such agreements, the UAE positions itself as a cooperative partner emphasizing the economic growth and stability in East Africa. For South Sudan, the agreement promises to deepen financial integration with regional and global economies, offering a stronger platform for trade, investment, and development.
Future Outlook
Implementation Timeline
Neither the press release nor regional reporting specifies the MoU’s timeline. Monitoring how quickly Oumolat initiates printing operations and when Al Etihad Payments rolls out each phase will be crucial to assessing progress.
Economic Impact
If executed effectively, the arrangements could enhance currency credibility and reduce counterfeit risks that will be a pivotal step for economies grappling with instability.
Capacity Outcomes
The success of training programs will hinge on sustained engagement. Effective skills transfer could yield long-lasting improvements in monetary policy execution and banking supervision in South Sudan.
Geopolitical Significance
This agreement could serve as a template for similar collaborations that will be linking financial capacity building with strategic diplomacy. It highlights how financial architecture strengthening is key to broader political and economic stability.
The MoU between the CBUAE and BoSS, marks a significant milestone in financial cooperation between the UAE and South Sudan. From issuing safe and secure banknotes to building a national payment infrastructure and investing in human capital, this partnership promises to bolster South Sudan’s financial resilience.
By harnessing institutional expertise, cutting-edge technology, and shared resources, both nations have embarked on a collaboration, rich in potential. If implemented as envisioned, the agreement could transform South Sudan’s financial landscape and serve as an example for international cooperation in the realm of central banking.
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