calls for domestic investment to support the expansion of fintech.
It claims that more than 60% of fintech companies are considering regional growth.
Babajide Komolafe, Editor of Economy
Despite tightening financial circumstances and rising global interest rates, Nigeria’s fintech sector raised over $520 million in equity capital in 2024, making it Africa’s top innovation hub, according to the Central Bank of Nigeria (CBN).
Nigerian entrepreneurs contributed significantly to the $2.2 billion raised by African tech companies last year, placing them among the top ecosystems on the continent in terms of both capital raised and deal activity, according to the CBN Fintech Report.
The result, according to the apex bank, “reaffirms Nigeria’s longstanding dominance in Africa’s fintech space.” It recalled that in 2019, Nigerian entrepreneurs raised over $747 million, or nearly 37% of all African startup investment.
However, the CBN cautioned that Nigerian fintech funding is still largely reliant on foreign investment, leaving the ecosystem vulnerable to fluctuations in the world macroeconomy.
But because Nigeria’s fintech funding has mostly come from outside sources, the ecosystem is susceptible to changes in the world market. The drop in fintech investment inflows into Nigeria by 2024 can be explained by the slowdown in venture capital funding caused by the substantial increase in interest rates in advanced economies during 2022.
The CBN stated that in order to lower currency risk and maintain fintech growth, it is critical to create domestic funding sources, such as utilizing Nigeria’s capital markets.
Extension of the region
According to the CBN, a poll of fintech sector participants found that 62.5% of Nigerian fintech companies intend to grow regionally, indicating a high level of trust in cross-border potential throughout Africa.
Stakeholders strongly supported regulatory passporting frameworks as a means of achieving this goal, since they would allow fintechs to enter peer African markets with ease and still adhere to local laws.
The CBN stated that in order to provide a more comprehensive and integrated approach to policy and industry growth, wider engagement throughout the ecosystem—beyond fintech companies—would be necessary.
