Regulatory Sandboxes in Africa

African countries are experiencing rapidly evolving financial ecosystems thanks to the opportunities that new technologies enable. This is a major challenge for regulating bodies given that their primary objective is to keep up with the market and regulate accordingly.

The emergence of open banking and fintech companies is now at the heart of many regulators’ concerns. Why? Because in most cases, this emergence is seen as a double-edged sword: on one hand, fintechs bring innovation and are able to meet new customer expectations; on the other, careful considerations must be made to prevent them from disrupting the entire financial system and putting consumers at risk.

This is where regulatory sandboxes come into play.

fintech regulatory sandbox is an environment in which all fintechs and financial institutions from the national market or abroad can come and experiment with their solutions using open banking APIs. It is commonly deployed by regulators around the world and is seen as the #1 phase when it comes to building an open banking framework.

Why do regulators need a regulatory sandbox?

There are two key reasons:

Firstly, it allows the regulating body to get a deep understanding of how open banking works in practice and what the interactions between the different parties will look like. This market intelligence is the premise of any open banking regulation as regulators need meaningful insights from the market before knowing what kind of framework to implement.

A regulatory sandbox will in most cases come with an admin dashboard from which you will be able to control all API calls that are being made and collect data around them. Moreover, by onboarding different market actors, you will let everyone experience open banking and its potential, which is valuable given that you will want to collect everyone’s opinion and feedback before regulating. That way, you are including all parties in the open banking framework from the start.

Second, deploying a regulatory sandbox is a great way to start engaging with the fintech community and make sure that only the most developed solutions will be able to operate. For instance, many regulators around the world have chosen to create an application form for the regulatory sandbox. By setting requirements to enter the sandbox, you are selecting the companies that have the most potential and accompanying them until they are ready to deal with real financial data.


The Central Bank of Nigeria (CBN) launched its regulatory sandbox following the framework it published in January 2021. Startups have until February 1, 2023 to apply to be part of the first cohort of selected companies. The CBN’s goals are to engage with fintechs while promoting financial inclusion and ensuring consumer protection. This will also enable the development of the payments and banking space.


The Capital Markets Authority of Kenya (CMA) started admitting fintech applications to its regulatory sandbox in March 2019. Once accepted, fintechs have a 12-month period to deploy and conduct live tests of their innovative products, solutions, and services. After this phase, they are either granted the license to operate in Kenya, the permission to operate but subject to compliance with relevant legal requirements, or denied the permission to operate considering the regulatory challenges identified during testing.


The National Bank of Rwanda (NBR) was one of the first regulators to implement a regulatory sandbox back in 2017. The new Regulation governing the regulatory sandbox introduced in 2022 details all eligibility criteria, objectives and program plans in three different languages. Its primary goals are to promote financial innovation, foster responsible practices that benefit end-consumers and set appropriate safeguards to identify and manage potential risks.


Following a successful pilot implementation, the Bank of Ghana launched its Regulatory and Innovation Sandbox in August 2022. In order to be eligible for the sandbox environment, companies have to operate a business model not covered under any current regulation, be a new immature digital financial service technology or propose a disruptive digital financial service that has the potential of addressing a financial inclusion challenge.


The Bank of Mauritius together with the Board of Investments (now the Economic Development Board) started granting Regulatory Sandbox Licenses in 2018. Applications received ranged from crowdfunding, peer-to-peer lending, cryptocurrency and initial coin offering solutions. The license is always granted for a period of time that does not exceed one year before the Bank of Mauritius or the Financial Services Commission proposes a regulatory framework to regulate the fintech company.


The joint initiative Incubator Sandbox between the Bank of Mozambique and the Mozambique Financial Sector Deepening entity in 2018 has the objective of developing the national financial sector with a specific focus on expansion and inclusion. Its first phase was conducted with previously selected start-ups and the next ones were based on a competitive process.

Sierra Leone

The Bank of Sierra Leone (BSL) launched its Regulatory Sandbox Pilot Program in 2018 with the initial cohort of 4 selected fintechs: InvestED, iCommit, MyPay and Noory. Each company of a cohort has 12 months to test and evaluate the regulatory aspects of its respective technology and business model. The main objectives are to promote financial inclusion and foster innovation while ensuring consumer protection through regulation.


The Bank of Zambia (BoZ) launched its Central Bank Regulatory Sandbox in 2021 after identifying the need to develop regulations for fintech companies in order to foster innovation whilst managing the risks these technologies may present. The main goal is to allow small-scale and live testing of payment system innovations in a controlled environment. Anyone can apply to the sandbox, as detailed in the Guidelines for Conducting Regulatory Sandbox by the bank.


The Reserve Bank of Zimbabwe (RBZ) released its Fintech Regulatory Sandbox Guidelines in 2021 after witnessing a growing number of fintech start-ups willing to offer innovative financial services and facing the need to regulate their operations just like other actors on the market. The objectives of the sandbox are to promote safe and responsible innovation of financial products and services, enable testing of fintech solutions in a live environment without putting the consumer at risk, encourage collaboration between the traditional financial services sector and fintechs, promote competition and efficiency while protecting customers, monitor disruptive technologies and regulate accordingly.


The National Bank of Angola (BNA) launched its regulatory sandbox in 2020 to allow fintech start-ups to test their products and services in a real market environment as well as provide guidance for future regulations. The program lasts for 10 months and hopes to address the financial inclusion challenges in the country, where about 70% of the adult population does not have access to banking services on a daily basis.


The Central Bank of Egypt (CBE) launched its regulatory sandbox in 2019 and invited the first cohort of fintech start-ups and companies specializing in e-KYC solutions to apply. One cohort duration is fixed at 6 months but can be extended to 12 if needed. As detailed in the Regulatory Sandbox Framework, its objectives are to encourage the adoption of innovative services on the market, reduce time-to-market and costs, identify risks and challenges to revise regulations, encourage fintech investments and get a better understanding of disruptive products.


As detailed in the National Payment Systems Regulatory Sandbox Framework, the Bank of Uganda (BOU) launched its regulatory sandbox in 2021 to stay on top of innovation while promoting safe, reliable and efficient payment systems. Moreover, it is seen as a tool to collect data that can be used to draft guidelines, improve existing laws or regulations and issue new ones for disruptive technologies in order to mitigate the risks.


Bank al Maghrib has launched its own sandbox in order to better understand how fintechs and their technologies operate and to develop the national ecosystem. This has paved the way for other initiatives such as the creation of a Fintech Portal in 2022 by the AMMC (Autorité Marocaine du Marché des Capitaux) to foster industry engagement and collaboration.

South Africa

The Intergovernmental Fintech Working Group (IFWG) launched its Regulatory Sandbox (RSB) in 2020 and called for applications again at the end of 2022 following the decision to take a new approach and keep the sandbox open for the foreseeable future. At the same time, they released a very insightful report which includes statistics and feedback from the group.

What’s next?

For the time being, it seems that the boom in regulatory sandboxes in Africa is not likely to end as an increasing number of fintechs address the region’s historical financial challenges in innovative ways.

We are also seeing that regulators who launched their sandbox some years ago are sticking to it, meaning that it’s currently the best way to ensure that only carefully selected companies join the market, improve existing policies and keep up with innovation and security standards.