The role of African regulatory sandboxes in the age of AIThe role of African regulatory sandboxes in the age of AI

Sandboxes across Africa's tech sector are emerging as useful tools for testing regulatory and technical innovations capable of tackling the complex challenges presented by data and artificial intelligence (AI).

Their potential is being explored in Africa to support data governance innovation and data value creation.

Those are key takeaways from the continent's first sandboxes outlook report from the Datasphere Initiative think tank.

The report – Africa Sandboxes Outlook: Thinking outside the box for responsible innovation in the age of AI – was unveiled on Wednesday during the East Africa Data Governance Conference 2025 in Nairobi, Kenya.

The Datasphere Initiative defines sandboxes as "time-bound and multistakeholder collaborative environments that test innovative technologies and practices against regulatory frameworks, or experiment with new uses, capabilities, resources or business models."

The think tank said that sandboxes are structured to boost novel technologies and services through interactive processes and spaces for stakeholders to co-create and foster transparency.

"They have emerged as key mechanisms for experimentation, providing a safe environment and enabling regulatory and technical innovation," the report said.

The rise of sandboxes in Africa

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The report identified 25 national sandboxes established in 15 African countries by October 2024, with the earliest implementations recorded in Rwanda (2017), Sierra Leone (2018) and Mozambique (2018).

It also highlighted two regional sandboxes: Ecobank's pan-African Banking Sandbox, which is operational in 33 African countries, and the Digital Earth Africa Analysis Sandbox, which is a cloud-based user computational platform that provides users with access to remote-sensing data and analysis tools for development of specific use cases.

"The growing landscape of sandboxes in Africa is proof of their usefulness and success. Our report highlights their expanding role as a valuable resource for responsible technological growth while ensuring that regulation evolves alongside rapid advancements in AI and data sciences," said Morine Amutorine, Datasphere Initiative's report lead.

An interactive version of the map can be viewed on Tableau public. (Source: Map by Morine Amutorine using data from Mapbox and OpenStreetMap under the Open Database License)

Africa's current sandboxes span different sectors, but the biggest strides have been made in the fintech sector, where innovations have been tested and refined.

In the financial sector, sandboxes have focused on promoting innovation and financial inclusion to provide an enabling environment for novel fintechs that can reach underserved and unbanked populations.

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The report highlighted some successful innovative solutions that have been tested and approved for licensing in the sector including:

"Notably, 99% of the mapped sandboxes are at national level focused on generating a national impact in the fintech innovation ecosystems," the report said.

It highlighted that in Kenya, both the Communications Authority of Kenya and the Capital Markets Authority have implemented regulatory sandboxes to facilitate innovation in their respective sectors.

Beyond Kenya, financial institutions in several countries including Ghana, Namibia, Rwanda, Tanzania, Zambia and Mozambique have all launched national sandbox initiatives to promote innovation and foster regulatory agility.

The report called for expanding sandbox use in more sectors beyond fintech, such as health and climate, to accelerate innovation, drive socio-economic development and unlock new opportunities for growth in Africa.

Policymaking in the age of AI

The Datasphere Initiative said sandboxes are becoming more frequently used in Africa and provide a controlled setting for testing AI and data-driven innovations.

"Several African countries have begun to embrace AI technologies, recognizing their potential role in economic and social development. A vibrant AI ecosystem is emerging, with lead technology hubs in South Africa, Nigeria and Kenya, and growing activities in Ethiopia and Uganda," the authors said.

However, the challenges of harnessing AI are stifling the opportunities that could further emerge.

Key challenges include limited access to significant amounts of quality data, inadequate data storage and insufficient infrastructure to enable connectivity and broadband.

"The region is also significantly lagging behind regarding the availability of skilled workforce, as the education sector has not yet incorporated digital and AI competencies in curriculum development, and still faces historic systemic issues to ensure attendance, coverage and quality," the report said.

While many countries have progressively worked toward an enabling governance environment for AI, the continent faces two key policy challenges: fragmented national efforts and reliance on traditional regulatory approaches for AI, the data it requires and the interconnected digital space.

Several African countries have developed national AI strategies or legislation (like Egypt, Tunisia, Benin, Nigeria and Mauritius) that align with their unique national development goals and the United Nations Sustainable Development Goals (SDGs).

However, the think tank said strategies vary significantly from one country to another, creating a fragmented landscape where the level of AI governance maturity differs widely across the continent.

It said there is a need to increase coordination of data and AI policies across the continent.

"The early stages of data and AI governance in Africa presents an opportunity for a regional approach which puts the continent at the forefront of innovation, ensuring sustainable and inclusive growth for all its nations," the Datasphere Initiative said.

The Datasphere Initiative – with the support of the William and Flora Hewlett Foundation – launched the Africa Sandboxes Forum project in 2022, aiming to accelerate responsible operational and regulatory innovation through sandboxes and building communities of practice across African countries.

The forum has seen the Datasphere Initiative team develop an online course on sandboxes, engage over 200 policymakers across the region through regulatory roundtables and sectoral working groups, enhancing knowledge sharing on the potential of sandboxes for responsible innovation.