Africa’s fintech revolution is at a critical juncture. The sector has grown an impressive 180% since 2020 and is projected to reach $65 billion in revenue by 2030. However, one major opportunity remains: regulatory harmonisation. Streamlining financial regulations across the continent could propel fintech innovation and enhance financial inclusion.
This growth is fueled by Africa’s unique landscape—a continent where over half of adults lack access to traditional banking, yet mobile phone penetration in Sub-Saharan Africa exceeds 80%. Fintech companies have leveraged mobile technology to provide essential financial services, from mobile money transfers to digital lending, reaching previously unbanked populations from bustling Lagos to vibrant Dar es Salaam.
The challenge of fragmented regulation
For multinational companies expanding across Africa, seamless and predictable payment systems are essential. However, fintechs and financial service providers must navigate a complex web of regulatory frameworks, obtaining separate approvals in each country. This fragmented system burdens businesses with high compliance costs and impacts millions of Africans through increased cross-border transaction fees and limited access to financial services.
These challenges are amplified by Africa’s economic diversity. The continent comprises 54 countries, each with distinct financial systems. Among them, four nations—Nigeria, Kenya, South Africa, and Egypt—stand out as the “big four” fintech markets, attracting the majority of investment. Other countries, such as Ghana and Rwanda, are also making strides in digital transformation. Despite these differences, intra-African trade reached $192 billion in 2023, underscoring the need for more seamless financial flows.
A model for Africa: The EU Passporting Rule
Solutions for regulatory integration exist globally. Take the European Union’s Passporting Rule, which allows financial service providers authorised in one EU country to operate across all member states. A similar system in Africa would enable fintechs licensed in Nigeria to expand to Kenya, South Africa, or Egypt without additional regulatory hurdles. The benefits would be transformative.
Consider cross-border payments—one of Africa’s biggest financial challenges. Currently, sending money across African borders is costly and inefficient, leading many to turn to cryptocurrency alternatives. A harmonised regulatory framework would reduce these costs by enabling payment providers to operate seamlessly across multiple markets.
A promising example of this approach is the recent Memorandum of Understanding (MoU) between Ghana and Rwanda on regulatory passporting. This agreement allows fintechs licensed in either country to expand their services without additional approvals, reducing compliance costs and fostering financial inclusion. If successfully implemented, it could serve as a model for broader regional harmonisation across Africa.
Steps toward harmonisation
Progress is already underway. Initiatives like the African Continental Free Trade Area (AfCFTA) and the Pan-African Payment and Settlement System (PAPSS) are pioneering cross-border payment solutions, proving that continental coordination is possible. However, these efforts will only succeed with a supportive regulatory environment.
Achieving harmonisation requires bold leadership from Africa’s fintech sector. Fintech companies must actively engage regulators, sharing insights on business models and building relationships that foster regulatory understanding. At the same time, financial regulators must embrace open dialogue and create flexible policies that support innovation while ensuring consumer protection.
As a first step, regional harmonisation among the big four markets—Nigeria, Kenya, South Africa, and Egypt—could set a precedent for others to follow. These countries already dominate fintech investment and could establish regulatory standards that drive broader continental adoption.
The road ahead
The stakes are high. As we move into 2025, Africa has an opportunity to create a regulatory framework that fuels innovation while protecting consumers. The alternative—maintaining the status quo—risks stalling the continent’s fintech momentum.
The technology is ready. The market is waiting. Now is the time for fintech innovators, policymakers, and regulators to collaborate and make harmonisation a reality. By taking decisive steps today, Africa can unlock its full fintech potential and drive a more inclusive financial future for millions.
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Oluwabankole Falade is the Chief Legal, Regulatory, and Public Policy Officer at Flutterwave, with over 20 years of experience in legal, regulatory, and government affairs across Africa’s financial and telecom sectors. He has held leadership roles at Visa, IHS Towers, and MTN Nigeria. Falade holds law degrees from the University of Ibadan and the University of Aberdeen.
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