The private sector is also playing its part. In his recent mid-year fiscal policy review of the 2021 budget statement and economic policy, the Minister of Finance, Ken Ofori-Atta, observed that the use of mobile money, door to door delivery via courier services and internet usage for business operations has increased significantly with about 77 percent of businesses increasing the use of the internet in marketing, compared to 19 percent during the lockdown period.

As the ongoing COVID-19 pandemic continues to make digital innovation a priority in Ghana and internationally, this article looks at some of the recent initiatives that are putting Ghana at the cutting-edge of developments in this space.

Digital Currency

On 11 August, the Bank of Ghana announced that it had partnered with Giesecke+Devrient to pilot a retail central bank digital currency in Ghana. The Bank of Ghana confirmed that the digital currency – the e-cedi – is intended to complement and serve as a digital alternative to physical cash. During the pilot phase, the e-cedi will be tested with banks, payment service providers, merchants, consumers and other relevant stakeholders.

This announcement followed the address given by the Vice President, Dr Mahamudu Bawumia at the recent Ghana International Trade and Finance Conference in Accra, in which he commended the Bank of Ghana’s move to introduce the e-cedi and encouraged other African governments to embrace digital currencies as a route to economic growth. In particular, Dr. Bawumia advocated the use of digital currencies alongside the implementation of the Pan African Payment and Settlement System (PAPSS) to become a priority for central banks across Africa. PAPSS is a central payment and collection infrastructure developed by the Africa Import-Export bank that would allow businesses to clear and settle transactions in local currency.

By reducing payment friction between businesses across the continent, PAPSS is intended to reduce costs, avoid delays and time variability, and allow companies to make the most of the opportunities for cross-border trade presented by the AfCFTA.

Regulatory Sandbox

In addition to its work on the e-cedi, the Bank of Ghana recently launched a regulatory and innovative “sandbox” pilot. The sandbox pilot will be available to banks, specialised deposit-taking institutions and payment service providers including dedicated electronic money issuers. The program is intended to provide a forum for financial sector innovators to interact with the sector regulator to test digital financial service innovations while helping to grow the regulatory environment and expertise.

Certain innovations have been specifically earmarked to benefit from the program, including new digital business models which are not currently covered by any regulations and new digital financial service technologies and products which have the potential to address a persistent financial inclusion challenge.

The program reflects the Central Bank’s commitment to creating an inclusive regulatory environment for the growth of fintech and to support innovation in the country.

It is hoped that the sandbox program will drive financial inclusion by facilitating innovative financial services by allowing regulators to learn about innovations faster, encouraging innovators to formalize their businesses, and incentivizing incumbents to experiment with new ideas in a bespoke regulatory environment with a reduced time-to-market.

Bank of Ghana Policies to Accelerate Digital Financial Inclusion.

The e-cedi and the fintech regulatory sandbox are among several measures introduced by the Bank of Ghana under its FinTech and Innovation Office that are designed to accelerate digital financial inclusion to reduce the impact of COVID-19 on individuals and businesses. Other measures include Tiered Licence Categories, Merchant Account Categorisation, the GhQR and Mobile Money Interoperability (“MMI”).

• The Tiered Licence Category is a Licence Application Pack which provides various licence categories for payment service providers. It is expected to offer innovative digital financial services to diverse customer groups in Ghana.
• The Merchant Account Categorisation is a three-tiered merchant account framework published by the Bank of Ghana to provide Small and Medium Enterprises (SMEs) with opportunities to access merchant accounts that are tailored to their needs.
• The GhQR is a national QR code payment solution which will simplify merchant payments and reduce the use of cash. This unified solution has been made available to banks and payment service providers in Ghana.
• Mobile Money Interoperability is a service created by the Ghana Interbank Payment and Settlement Systems Limited, a wholly-owned subsidiary of the Bank of Ghana, which allows funds to be transferred from one mobile money wallet to another mobile money wallet across networks. It also allows for the transfer of funds across various mediums, including bank account to mobile money wallet, wallet to e-zwich card. As a result of the COVID-19 pandemic, MMI has had a period of significant growth: by the end of 2020, MMI transactions went up by 367%.

Digital Payment Platforms

The widespread adoption of mobile money and other digital payment systems in Ghana has led to a number of state institutions adopting digital payment platforms to facilitate payment for public sector services. For example:

• The Government introduced the Ghana.gov digital services and payments platform to allow Ghanaians to make payments to a range of Government agencies and ministries. This is intended to be a single point of access for all services of ministries, departments and Government agencies.
• The Ghana Ports and Harbours Authority (the “GPHA”) has announced plans to introduce a new e-payment platform for the payment of charges or other related fees. The platform is expected to enhance cargo clearing at the ports by providing consumers with the opportunity to easily validate invoices, calculate port charges and facilitate secure transactions through mobile money and other payment systems.
• All categories of taxes can now be paid remotely and electronically through the Ghana.gov platform and other automated channels. Payment of taxes can also be made through all the banks on the Ghana.gov platforms. This initiative is part of GRA’s efforts to improve tax collection and remove all the inefficient challenges, such as excessively long queues, that impede payments. The Commissioner of GRA, Rev. Owusu-Amoah, has recently stated the GRA’s goal to remove all tellers from their offices in line with full automation of the tax payment system.

Digitization of Records

In addition to payment systems, 2021 has seen the continuation of efforts to digitize record keeping in Ghana. In particular:

• The Registrar-General’s Department (“RGD”) has recently announced its plan to roll out a newly improved online software for registration of business names and company registration in Ghana. The Registrar General stated that the current process for registering and dissolving businesses in Ghana will form the basis for preparing the new system.

The RGD conducted a four-day exercise in April 2021 that involved a step-by-step overview of all the current processes for registration and dissolution of businesses in Ghana. The exercise forms part of the existing technical assistance support from the International Finance Corporation (IFC) under the Ghana Investment Climate Advisory Programme and is funded by the Swiss Economic Cooperation Secretariat (SECO). The modified software system is intended to reform businesses and company registration in Ghana in line with international best practices.

• As part of the recent mid-year fiscal policy review of 2021 budget statement and economic policy, the Minister of Finance, Ken Ofori-Atta announced that through the Ghana CARES initiative, the Government is implementing the Land Records Digitization project. This digitization project aims to tackle a number of inefficiencies and issues in the land registration regime, including multiple titles being issued for the same piece of land and the curse of missing documents, in order to reduce the time for registration to a maximum of one month.

This project will play a key role in the implementation of Ghana’s new Land Act, which received presidential assent on 23 December 2020 and introduced provisions catering for electronic conveyancing.

Integration of Government Records

2021 has also seen further progress on the integration of public sector records, building the creation of the National Identification Authority (“NIA”) and the “Ghana Card” scheme.

• In June 2021, the process of integrating Social Security and National Insurance Trust (“SSNIT”) and NIA/“Ghana Card” numbers began. This integration means new SSNIT members must provide their Ghana Card numbers to enroll onto the SSNIT scheme and employers and the self-employed can now pay contributions using Ghana Card numbers. The target is for all existing SSNIT members’ numbers to be merged and migrated onto the NIA platform by the end of the year.
• The Ghana Revenue Authority (“GRA”) has confirmed it will be phasing out previously issued Tax Identification Numbers of individuals and replacing them with the Ghana Card numbers. This process started on 1 April 2021 and is expected to continue until 31 December 2021. A transition period applied from 1 April 2021 to 31 December 2021 where both the TIN and Ghana Card numbers may be used simultaneously as the unique number for tax identification purposes. After this period, it is expected that all existing TINs will be replaced with Ghana Card numbers.
• The Vice President, Dr. Mahamudu Bawumia, has announced proposals to merge the NIA Ghana Card database with that of the Criminal Investigation Department (“CID”) of the Ghana Police Service. This merger is intended to enable easier access to the criminal records of Ghanaians. For employers, this would offer accessibility to background records of prospective employees and enable verification of criminal records of current employees. Additionally, companies that engage with clients, guarantors, beneficial owners, etc. are also offered the opportunity to run criminal checks for verification purposes. Accountable Institutions with anti-money laundering obligations, such as lawyers, accountants, deposit-taking institutions, insurance companies, real estate companies, dealers in shares, stocks, bonds or other securities would also benefit from this initiative.

As these processes continue, managing and protecting data will continue to be a major risk issue. It will be critically important for the Government, businesses and all other stakeholders to manage data protection and cybersecurity concerns, including the requirements of the Data Protection Act, 2012 (Act 843), the Cybersecurity Act, 2020 (Act 1038) and other relevant legislation.