On Tuesday, Ghana and Rwanda made a groundbreaking announcement by launching Africa’s first License Passporting Framework.
This innovative initiative is designed to streamline cross-border fintech operations by eliminating duplicative licensing requirements for fintech companies operating between the two countries.
Ghana-Rwanda framework streamlines fintech expansion
The License Passporting Framework allows fintech companies licensed in either Ghana or Rwanda to expand into another country with minimal additional regulatory requirements. This move is expected to reduce costs and administrative hurdles, making it easier for fintech firms to scale operations across borders.
As John Rwangombwa, the former Governor of Rwanda’s central bank, noted, “This initiative goes beyond technology to providing economic empowerment, financial resilience, and ensuring that Africa’s digital economy is built on an infrastructure that meets the needs of businesses and individuals alike”.
Industry experts have lauded this initiative as a step towards regulatory harmonisation in Africa. By reducing compliance burdens, the passport system is expected to attract more fintech investments and innovations. Johnson Asiama, the Governor of the Bank of Ghana, emphasised that this framework represents a milestone towards an integrated African capital market, enhancing livelihoods and creating opportunities for entrepreneurs, especially SMEs.
The framework is part of a broader initiative known as Africa’s Next-Gen Digital Payment Infrastructure. It includes a trusted identity infrastructure and an interoperable payment system. These components facilitate seamless financial transactions and real-time cross-border payments within the African financial ecosystem.
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Enhancing financial inclusion and innovation
Introducing this License Passporting Framework signals a commitment to easing regulatory challenges that have long hindered cross-border fintech expansion in Africa. It aligns with efforts to create a more interconnected digital financial environment, enhancing financial inclusion across the continent.
An industry analyst noted, “By creating a seamless regulatory framework, Ghana and Rwanda are setting a precedent for other African nations to follow”.
The initiative, backed by the Monetary Authority of Singapore, was officially launched at the Inclusive FinTech Forum in Kigali. It reflects a broader innovation trend in Africa’s fintech sector, which is poised to generate $40 billion in revenue by 2028. However, regulatory constraints and limited digital infrastructure have often impeded realising this potential.
The framework’s implementation will focus on ensuring data integrity and financial inclusion by enabling the secure exchange of verified business and individual data across jurisdictions. It also involves a pricing model for low-value and high-value transactions to ensure financial viability and stakeholder engagement to co-create a sustainable digital payments ecosystem.
In parallel, Rwanda and Ghana are linking their national payment systems, facilitated by the Global Finance and Technology Network. This project aims to establish a comprehensive cross-border payment infrastructure that aligns with global financial standards, ensuring resilience, security, and regulatory foresight.