Advancing digital inclusion: Policy Accelerator's five-year journey

January 27, 2024 Darina H

Policies shape the trajectory of nations. Fewer policy areas are more relevant than those that enable economic and individual empowerment.

UNCDF's Policy Accelerator programme emerges as a critical partner to governments, co-orchestrating a symphony of policy change across Africa, Asia, and the Pacific.

Since 2018, the Policy Accelerator has navigated the complexities of diverse regions and demonstrated its relevance through tangible results, strategic partnerships, and resilience in the face of constant global and national disruptions.

The Policy Accelerator's influence manifested over 20 policy and regulatory reforms across 10 countries in its first five years of operations. These contributions included designing and drafting digital financial services (DFS) policy and regulatory enablers, implementing supervision measures, developing complementary policies, and creating a more inclusive and competitive DFS ecosystem.

Achieving these outcomes requires a unique combination of skills, including technical expertise, policy knowledge, and advocacy capabilities. Our team of policy and regulatory specialists have a deep understanding of the markets and extensive experience in the digital finance and inclusive digital economy sectors.

As digital financial inclusion expands, new challenges emerge, from data protection and cybersecurity to artificial intelligence in finance. We observed governments' increasing interest in developing digital infrastructure and creating resilient societies through inclusive payments, digital ID, and data exchange systems. Our programme emphasizes the need for sound, transparent, fair, and risk-proportionate policies and regulations to attract investment, foster innovation, and promote competition.

The Policy Accelerator started as a regional programme focused on Africa alone. Over time, our portfolio expanded to Asia and the Pacific, where regulators and policymakers shared many of the same goals as their African counterparts.

Operating across 20 markets globally, the Policy Accelerator steered the adoption of regulatory frameworks that fostered competitiveness and inclusivity, protected consumers and financial systems, garnered government commitment to DFS, laid the foundations for regional finance and trade harmonization, and enhanced capacity and familiarity with DFS models and risk management tools.

The Policy Accelerator's influence extends beyond national borders, reaching the agendas of powerful global entities. Supported by G7 countries, the programme drove policy changes in francophone African markets, emphasizing gender-intentional policymaking. This led to collaboration with civil society organizations to influence their governments to prioritize women's financial inclusion and doubling our efforts to develop gender intentional tools for regulators. As a result, civil society in Central Africa and Ethiopia have successfully pressed policymakers for needed policy changes, and we have developed a comprehensive tool for regulators to collect gender disaggregated data.

Notably, the Policy Accelerator played a pivotal role in contributing to the Global Partnership for Financial Inclusion (GPFI), providing toolkit guides for the G20 High-Level Principles for Digital Financial Inclusion. This global engagement underscores the programme's role in shaping policies that resonate globally.

The COVID-19 pandemic was crucial in defining how the Policy Accelerator used digital tools and an agile way of working to support regulatory reforms. The pandemic disrupted conventional operations, imposing travel bans that hindered on-the-ground engagement. Yet, our team prioritized and maintained sustained engagement with policymakers and regulators. The publication of the Policy Accelerator Toolkit during the pandemic facilitated technical support, responding to urgent needs for expedited regulatory changes to enable cashless social transfers and online business transactions.

The Policy Accelerator is a learning organization, continually reflecting on successes and failures.

The emphasis on advocacy and the importance of pre-reform engagement, phased approaches to regulatory change, and sustained efforts across focus markets are lessons that have transformed how the programme works. Strategically managing limited resources through meticulous planning results in a higher probability of policy change.

As the global economy becomes increasingly digitized, the relevance of the Policy Accelerator lies in its ability to adapt, learn, and shape policies that resonate in a world of constant flux. An ongoing commitment to continuous learning — internally and externally— positions the programme as a reliable knowledge base and adaptable partner in an era of rapid technological advancements.

A clear roadmap emerges as the Policy Accelerator reflects on its impactful journey. With an evidence-based methodology and a momentum of change in many markets, the team envisions an expanded technical scope but a narrower geographic focus. Engaging with donors like BMGF, the team seeks to identify future opportunities to further policy and regulatory reform, championing the cause of inclusive digital economies.

Understanding the intricate web of interconnected policy domains is vital. With origins in traditional financial inclusion, the Policy Accelerator acknowledges the profound intersectionality of digital economy policies. Addressing financial aspects and crucial issues such as data protection, cybersecurity, and the ethical use of artificial intelligence. Strategic partnerships with industry experts, academic institutions, and global networks become essential tools to manage policy intersections. By pooling resources and insights, the programme strengthens its capacity to tackle complex policy issues and contribute meaningfully to the global dialogue.

Recognizing the diverse challenges policymakers and regulators face, we continue to promote a customized approach to capacity-building. Specialized training programmes and peer learning can address emerging issues, ensuring policymakers and regulators have the knowledge and skills to navigate complexity and effectively engage with market players and civil society. From government agencies to private enterprises and civil society, diverse voices contribute to policymaking. Inclusive policy design ensures that policies are effective and considerate of the perspectives of those impacted.

A proactive role in shaping the policy agenda becomes integral to ongoing success. The Policy Accelerator emerges as a thought leader, advocating for policies that promote innovation, competition, and inclusivity. By contributing research and insights, the programme influences the global discourse on the governance of the digital economy.

Flexibility is key in a landscape marked by rapid change.

We excel at adaptable operations and assistance, always ready to evolve with the regulatory needs of the digital economy. Embracing agile methodologies, the programme responds promptly to emerging challenges, ensuring continuity and resilience in volatile times. The Policy Accelerator proactively positions itself to navigate unforeseen circumstances through scenario planning and anticipating future challenges, whether global crises or technological disruptions.

The UNCDF's Policy Accelerator doesn't merely adapt to change; it leads it. The program remains a resilient partner in the evolving digital economy policy landscape. Inclusive policy reforms enable individuals to participate in the digital revolution on their terms, increasing economic empowerment, sustainable growth, and innovation.

As the world continues to digitize, the Policy Accelerator stands with nations navigating through the intricate pathways of the digital age.

One policy at a time.