Nigeria’s fintech ecosystem attracted over $2 billion in investments within the yr 2024.
That is in keeping with the 2024 Financial Report by the Workplace of the Particular Adviser to Nigeria’s President on Financial Affairs (within the Workplace of the Vice President), dated November 2024 and obtained by Nairametrics.
The report was launched on Friday on the Banquet Corridor in Abuja.
It listed Telecommunications and ICT, particularly fintech, as one of many key sectors that drove the nation’s financial progress in 2024, with the potential to duplicate or double the identical feat in 2025.
“Nigeria’s telecommunications and ICT sector is without doubt one of the fastest-growing in Africa, contributing roughly 18.9% to GDP in 2024.
“Nigeria’s fintech ecosystem, which attracted over $2 billion in investments in 2024, will proceed to flourish in 2025, as digital monetary companies akin to cell banking, digital lending, and e-commerce broaden,” the report added, highlighting fintech as a key driver of financial progress for 2025.
Vital Investments
The report additionally talked about that with the rollout of 5G networks and the growth of web penetration, the telecommunications and ICT sector is anticipated to develop by 8-10% in 2025.
- It additional acknowledged that Nigeria’s know-how startup ecosystem is projected to proceed attracting important international funding, surpassing $3 billion by 2025.
- The report forecasts that the sector shall be pivotal in creating high-paying jobs for Nigerians and driving innovation.
“Telecommunications and ICT, a serious progress driver, contributed roughly 19.78% to GDP presently in 2024, up from 19.54% recorded in the identical interval in 2023 and better than within the first quarter of 2024 at 17.89%,” the report added.
The report, which featured contributions from the federal authorities, the Nigerian Financial Summit Group (NESG), and International Analytics Consulting, acknowledged that with projections indicating continued progress, ICT’s contribution to GDP might attain 22% by 2025.
Nonetheless, the report additionally highlighted some challenges dealing with fintech and communication techniques in Nigeria.
These embody infrastructure constraints, regulatory points, buying energy limitations, and a constrained trade.
What You Ought to Know
Nigeria, which was for years the main vacation spot for startup funding in Africa, misplaced its high place to Kenya in 2023.
- Kenyan startups attracted roughly $800 million, the most important quantity on the continent, whereas Nigerian startups secured $410 million.
- Within the first half of 2024, African startups raised $780 million in funding.
- Of this, Kenyan startups garnered the most important quantity, $244 million, representing 32% of the full funding raised, whereas Nigeria obtained roughly $172 million. Egypt took a share of $101 million, and South Africa secured $85 million.
Regardless of the progress made by fintech techniques, the Financial and Monetary Crimes Fee (EFCC) just lately raised issues about rising fraudulent actions in Nigeria’s monetary sector, notably throughout the unbanked, underserved, and middle-class populations.
- The EFCC attributed this development to negligence by some fintech firms in implementing sturdy Know Your Buyer (KYC) protocols.
- Olukoyede famous that many fintech companies fail to stick to strict KYC tips, notably when onboarding clients for tier-one accounts.
He highlighted that this negligence creates vulnerabilities that fraudsters exploit.
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