Regulatory heterogeneity is a major barrier to cross-border expansion across all modes of delivery for financial services businesses. Even when regulatory regimes are open to foreign entrants, including in particular via commercial presence (mode 3) and cross-border supply (mode 1)  and have transparent and efficient licensing procedures, in many cases, while regulatory goals don’t differ (ie. financial sector development, financial stability, consumer protection, financial inclusion), the way the regulatory authorities seek to implement these goals can vary significantly.

Many harmonisation measures are underway at the REC level, and indeed, it is here that harmonisation is mostly likely to be successful as RECs members share closer ties in legal, economic, linguistic and social spheres. Nevertheless, to realise a single continental market, this harmonisation needs to be extended more broadly.

A good start would be in areas of new financial services and products, for example, crowdfunding, mobile money, crypto-finance and sustainable finance. New financial services provide something of a clean slate when it comes to regulation, so are good candidates for harmonised rules at the continental level.

The following country profiles are available to download:

pdf South Africa (341 KB)

pdf Kenya (356 KB)

pdf Rwanda (153 KB)