In July 2020, the Central Bank of Nigeria (CBN)1 released a draft Framework for Regulatory Sandbox Operations2 aimed at establishing a controlled environment where disruptive technology in the financial services can be tested under the supervision of the CBN.

The CBN has now issued an approved Framework for Regulatory Sandbox Operations in Nigeria (the "Framework"). The CBN has now issued an approved Framework for Regulatory Sandbox Operations in Nigeria (the "Framework"). The Framework is expected to give eligible fintech innovators an opportunity to test their products, services, or solutions without the need to acquire a CBN license.

What is the scope of the Framework?

The Framework is targeted at innovations that can improve the Nigerian payments system. It applies to proposed products, services or solutions that are either not contemplated under the prevailing laws and regulations, or do not precisely align with existing regulations.

Eligibility of Sandbox Participants

The Framework allows for CBN licensees and local companies (including financial sector companies and telecom companies) to participate in the sandbox operations. Innovators whose proposed payment solution involves technologies which are currently not covered under existing CBN regulations are also welcome to participate.

Entities which apply to participate in the sandbox operations must show evidence that the product, service or solution is innovative, useful and functional; and associated risks have been identified. The entities should also have a business plan to show that the product, service or solution can be successfully deployed after they exit the sandbox.

Application Requirements and Approval Process

When the CBN is ready to receive applications, it will place an invitation on its website and local newspapers. Once the invitation is placed, applications are to be sent to the CBN's official email address –

Applications should be submitted with a cover letter signed by an authorized signatory of the applying entity and addressed to the Director, Payments System Management Department, Central Bank of Nigeria, Abuja. The applicants are to state the initial timeline (in months) for the proposed test of the product, service, or solution.

Applicants will be informed of the CBN's approval to participate in the sandbox, 45 working days after the closure of the application window.

Sandbox Cohorts

The Sandbox will consist of Cohorts (which are groups of innovators that share the characteristic of having been allowed to enter the sandbox at the same time for the same period).

There will be one Cohort per year. Upon the completion of the sandbox test, the CBN will decide whether the product, service or solution should be introduced into the market.


The Framework is a plus for innovation in Nigeria. It signals that regulators are willing to better understand and develop more suitable regulations for innovations in the fintech space. The success of the sandbox can only be determined over time as implementation will be a key factor.


1. Pavestones has written several articles on CBN regulations and licenses. You can view them at

2. You can read our analysis of the draft framework here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.