The Governor of the Bank of Ghana, has called for effective collaboration between regulators, financial institutions, mobile money operators, FinTech innovators, and other stakeholders in Africa, saying, it is crucial to address technical challenges, ensure regulatory compliance, build trust, and drive the scalability and sustainability of cross-border mobile money and other interoperability initiatives.

According to him, by fostering a collaborative ecosystem, Africa can harness its FinTech advancements to unleash the full potential of interoperable mobile money systems, benefiting both individuals and countries across the continent.

Giving remarks at the Africa Prosperity Network 2024 Symposium on Retail Payment Interoperability, he said the need for a robust framework that enables seamless cross-border payment in Africa has remained central to most recent policy, development, and financial inclusion discussions.

This, he added underscores the enormous constraint faced on the continent and the quest for concrete actions to promote cross-border payment systems to achieve our shared aspirations

“We are living in a time where most African’s first interaction with the financial sector may be through their smartphones. We are also living in a time where Africa’s cross-border payments are costly, where sending $100 could end up being only $40 received in some of the most expensive corridors. You would agree with me that these two scenarios present an optimal opportunity for scaling up cross-border transactions on the continent. The good news however is that our financial future is filled with possibilities, and at the forefront of these advancements lies the interoperability of our payment systems”, the Governor continued.

He stressed that the concept of interoperable mobile money systems holds enormous potential for the establishment of comprehensive cross-border payment interoperability in the short-medium term.

As such, an efficient cross-border payment interoperability system can deliver seamless payments between buyers and sellers across African countries, as well as provide extensive inclusivity in expanding access to payment and financial services for the youth, vulnerable groups, and striving entrepreneurs.

‘This notwithstanding, achieving cross-border interoperable mobile money systems would require harmonised regulatory frameworks, consistent technical standards, and robust infrastructure. In addition, strong public-private partnerships, involving mobile network operators, financial institutions, FinTechs, and regulators would address technical challenges and ensure regulatory compliance”, the Governor intimated.

Other strategies that would ensure the adoption and long-term system reliability of cross-border payment interoperability, he said, include customer education and trust, scalability, and system sustainability, as well as inclusive access, which is essential for all segments of society, including rural and underserved populations.

He concluded on a positive note, saying, the foundational elements necessary to implement this idea of cross-border payment interoperability are partly in place in some African countries. These include regulatory sandbox programmes, progressive regulatory frameworks, and a dynamic FinTech sector, eager for growth opportunities. However, what may be lacking is collaboration among stakeholders

The Bank of Ghana has clarified the role of FinTechs in the remittance space.

In an explainer on the remittance framework shared on the Bank’s social media handle, the Bank emphasized that the local FinTech companies authorised by the central bank do not mobilize FX from abroad.

Rather, it is the Money Transfer Organization based abroad that receive remittances from abroad.

The mobilized funds are then paid into the nostro account of the local partner banks with the FinTechs involved in the downstream payment to beneficiaries.

However, recent comments by some market watchers had wrongly blamed FinTechs for withholding FX abroad.

This erroneous impression is corrected by the BOG in the explainer. The confusion seems to stem from the mixing up of the role of MTOs and FinTechs. Watch the explainer.

In a bold move aimed at bolstering Ghana’s economic stability, the Institute of Economic Affairs (IEA) is making a strong case for crucial amendments to the Bank of Ghana Act 2016.

Central to their proposal is the extension of the Governor’s tenure, ensuring continuity and independence from presidential terms.

Speaking at a Stakeholders’ Forum themed “Reviewing the Bank of Ghana’s Act to Promote Transparency, Accountability, and Effectiveness,” Senior Scholar Prof. Alexander Bilson Darku from the IEA emphasised the critical importance of safeguarding the Central Bank from governmental influence over the Governor’s terms and conditions.

He asserted that maintaining this autonomy is essential for upholding the effectiveness and independence of the regulatory institution.

“We began by examining the composition of the Bank of Ghana’s board, the governor’s appointment process, and the regulatory framework governing government lending limits,” he said.

“There was a consensus on the necessity for Ghana to carefully consider aligning the term of the Bank of Ghana Governor to overlap that the of President to ensure continuity and effectiveness in governance,” he added

Prof. Alexander Bilson Darku further explained that: “substantial discussion focused on enhancing the independence of the Bank of Ghana and its ability to effectively promote price stability, exchange rate stability, and economic development through sound policy measures”.