Home Policy & Governance Ghana launches fintech sandbox amid ‘remarkable’ digital finance surge

Ghana launches fintech sandbox amid ‘remarkable’ digital finance surge

PIC: Ghana’s currency: the African country’s central bank is encouraging fintech solutions, including an eCedi digital currency| Credit: PDPics; Pixabay

Ghana’s central bank has launched a sandbox to encourage fintech initiatives as it seeks to ‘continuously evolve a conducive regulatory environment that fosters innovation, financial inclusion and financial stability’.

Sandboxes – which allow start-ups and fintech-based initiatives to conduct ‘live’ experiments under regulatory supervision – have burgeoned across the globe in recent years, with well-established examples including those operated by the UK’s Financial Conduct Authority and Monetary Authority of Singapore.

Bank of Ghana’s ‘regulatory and innovation sandbox’ has been developed through pilot activity working with a private company called EMTECH Solutions.

‘Over the past two years and during the pilot, the use of digital financial services among Ghanaians has recorded [a] remarkable increase on account of a raft of enabling policies introduced by the [central] bank and the government under the national digitalisation agenda,’ Bank of Ghana said in a press release on the sandbox. ‘At the same time, the restrictions imposed on movement of persons as part of the Covid-19 containment measures have spurred the adoption of digital financial services among individuals, businesses, government ministries, departments and agencies,’ it added.

Innovations eligible to enter the sandbox will have to satisfy one of three categories: new digital business models not covered ‘explicitly or implicitly’ under current regulation; new and ‘immature’ digital financial services technology; and ‘innovative and disruptive digital financial service products that have the potential of addressing a persistent financial inclusion challenge’.

Ghana’s ‘enormous opportunities’

The adoption of emerging technologies such as artificial intelligence (AI) and data analytics tools is ‘accelerating’ among Ghanaian financial service providers ‘with enormous opportunities for innovative products and services including chatbot, know-your-customer (KYC) and customer due diligence (CDD) solutions, anti-money laundering and fraud monitoring platforms, credit scoring for digital credit products and customer-centric product designs’, Bank of Ghana states in its sandbox announcement.

Bank of Ghana admitted a blockchain solution into the sandbox the during its pilot, which was announced in February 2021. The press release about the sandbox’s launch states that blockchain ‘appears to hold significant promise for use in mainstreaming financial service delivery though the technology is yet to mature’.

The West African nation, which has a population of about 30 million, is also among the continent’s frontrunners when it comes to exploring the possibilities of a potential central bank digital currency (CBDC) – an eCedi.

The central bank refers to the eCedi in its sandbox announcement, saying that ‘within the domain of Bank of Ghana, the digital version of the Ghanaian currency has the potential of boosting innovation in digital financial service and further enhancing digitalisation of the financial service industry when mainstreamed.’

As it looks to encourage use of the sandbox, the central bank states that it ‘will engage various stakeholders’ including industry associations and innovation hubs, working with ‘support’ from FSD Africa. FSD Africa is a UK government-funded development agency, set up a decade ago, working to build and strengthen financial markets across sub-Saharan Africa. FSD Africa has undertaken previous activity in Ghana including a feasibility study into a ‘green’ bonds market.

Ghana’s multi-pronged digital drive

In terms of its eCedi activity, Bank of Ghana engaged a Germany-headquartered company, Giesecke+Devrient (G+D), to test a general purpose CBDC last year and a 32-page ‘Design paper of the digital Cedi (eCedi)’ was published earlier this year.

The central bank’s investigations into the possibilities of central bank digital money are part of the country’s broader ‘Digital Ghana Agenda’, which involves the digitisation of government services.

Other significant government-led digital projects of note include Ghana.Gov, a centralised public-sector digital payment platform, which launched last year. Communications and digitalisation minister Ursula Owusu-Ekuful said a launch event for the platform that it would minimise the need for citizens to engage in physical money interactions, reduce the need for visits to offices to pay for services, as well as better enable government bodies to view money flows.

The government is also in the process of implementing a rural connectivity project to link unserved and underserved areas within the next two years, Owusu-Ekuful said at the time.

“Four million citizens will be connected to voice and data telephony services in the remotest parts of our country,” she said. “Smart investment in infrastructure will improve access to the latest technology, result in greater availability of affordable and reliable broadband connectivity and broader adoption of digital technologies across the entire country as we are determined to promote digital inclusion and leave no-one behind”.

Ghana looks to boost digital trade

Ghana’s Ministry of Communications and Digitalisation (MoCD) and Postal & Courier Services Regulatory Commission (PCSRC) earlier this week launched the ‘African Continental Free Trade Agreement (AfCFTA) Hub’ to encourage digital trade and e-commerce, among other priorities.

Launching the initiative on 29 August, Owusu-Ekuful said AfCFTA Hub had been created to “ensure that Ghanaian businesses have a trusted profile beyond Ghana, to strengthen the hands of industry and regulators to fight fraudsters who will also like to use AfCFTA to regionalise their nefarious activities”.

“AfCFTA Hub should make it easier for technology start-ups, small and medium-sized enterprises [SMEs] and other producers of ICT goods and services to find markets across Africa,” Owusu-Ekuful said at an event in Ghana’s capital city Accra.

“Our business-process outsourcing landscape can be revitalised by AfCFTA as Ghana becomes a hub for call centre, data processing, data science and various digital services for businesses all over the continent and beyond,” she said.

An ‘AfCFTA number’ and ‘AfCFTA common transaction ID’ will facilitate trade and help fight fraud, Owusu-Ekuful said, urging businesses to adopt them.


‘Cambodia and Ghana-focused solutions win women’s financial inclusion competition’ – our news story (18 October 2021) on a fintech solution being used in Ghana (People’s Pension Trust, which offers ‘digitally driven’ retirement products, particularly for informal workers in Ghana) being named one of two winners of the third annual ‘Making Finance Work for Women Fintech Innovation Challenge’ (run by Women’s World Banking)

‘Ghana readies digital currency trial’ – our news story (17 Aug 2021) on the central bank engaging Giesecke+Devrient (G+D) to help test a CBDC

‘Ghanaian universal QR code set to accelerate e-payments’ – our news story (23 July 2019) on a move to encourage electronic payments