Govt to introduce National Digital Address System

Dr. Mahamudu Bawumia, Vice President

The Vice President, Dr Mahamudu Bawumia, has stated that the government will introduce the National Digital Address System to reduce the risk profile of people and improve their access to financial services.

The policy, in addition to the two others — financial inclusion and the National Identification System — is expected to give the country the necessary backbone for formalising the economy.

Delivering the keynote address at the 5th Economic Outlook and Business Strategy (EOBS) Conference in Accra on March 23, Dr Bawumia said, “The role of an address system in the country is mostly underestimated but very key to a nation’s economy and would allow us to ‘leapfrog’ over other advanced countries. If we have the Digital Addressing System and the National Identification System and also we have interoperability of these two in the digital payment space, we would have dealt with the engine that is going to drive this economic foundation.”

He added that “the benefit of technology and experiences across the country will allow us to implement these three policies this year.”

The vice-president said for citizens to effectively use mobile money payment system, for instance, would require a functional national identification system.

“The government is convinced that the establishment of a national database using the National Identification System as a primary identifier would boost the economy,” Dr Bawumia stated.

Deepening financial inclusion

The Vice-President urged financial institutions to reach out to the unbanked population of the country in order to reduce the high level of poverty among citizens, saying a country’s financial inclusion was linked to the structure of its interest rate.

“In a country where 70 per cent of the country’s population is excluded from the financial system will imply that there would be an increase in interest rates” because savings would be low.

Dr Bawumia stressed the need for increased financial inclusion which he said would encourage the level of savings, breed investment, growth and lower unemployment, and hence, less poverty.

He said that the government was keen to developing the financial sector to deepen financial inclusion to remove more Ghanaians from extreme poverty.

Abolish tax for cashless transactions

“The abolition of the Value Added Tax (VAT) on financial services is to encourage the development of financial transactions and mobile money payment system,” adding that the revised Bank of Ghana Act had specific incentives for promoting a cashless society.

Dr Bawumia said the Act was to liberalise the banking sector to engender healthy competition and build a robust financial services industry because research had proven that countries with strong financial systems also experienced strong economic growth.

Payment System Act

The Second Deputy Governor of the Bank of Ghana, Dr Johnson Asiamah, stated that the central bank had presented a revised version of the Payment System Act to be passed into law by parliament in order to support digital payments without risking the stability of the financial system.

The bill, Payment Systems and Services Bill is a revision and consolidation of the existing Payment Systems Act in 2003, (Act 662) and the guidelines for Electronic Money Issuers in 2015.

Dr Asiamah said, “The draft bill has become necessary on account of the increasing role of communication technology, fintechs, telcos and aggregators in the payment space”.

He added that the bill when passed into law would provide the necessary legal backing to the bank.

He stated that it was important that the appropriate regulatory tools were deployed to enhance regulatory compliance and improve the safety and integrity of payment products.

Financial Inclusion

He said digital payments offered a great potential for financial inclusion, elimination of pay roll fraud, improvement in the monetary policy transmission mechanisms and efficiency in payments.

“However, digital payments can only be an enabler of inclusive growth when the right regulatory environment is in place” He added.

He stated that on account of this, the Bank of Ghana would continuously retool the regulatory environment to incentivise stakeholders to innovate.

He added that the draft bill when passed into law would scale up financial inclusion.


He announced that the bank had also commenced the process of adopting regulatory technology.

This technology referred to as RegTech was to identify regulatory requirements of digital payments.

He said that the technology would facilitate the monitoring of compliance and enhance compliance of service providers to regulations.

Regulatory Sandbox

He noted that as part of the bank’s measures to encourage innovation in digital payments, the bank has announced the establishment of a regulatory sandbox to allow innovators test their ideas in a live but controlled environment under the supervision of the Bank.

He explained that this approach was to encourage innovation and also proactively identify any risk that may be associated with it.