Nigeria’s fintech sector, despite its rapid growth and position as a continental leader, remains dangerously exposed to global financial shifts due to its reliance on foreign capital, the Central Bank of Nigeria (CBN) has warned.
In its 2025 Fintech Policy Insight Report, the apex bank noted that while the ecosystem has evolved into one of Africa’s most vibrant innovation hubs, limited domestic funding options create significant vulnerability. The warning follows a decline in equity funding for Nigerian startups, which raised approximately $520 million in 2024, down from about $747 million in 2019—a year when Nigeria accounted for nearly 37% of all African startup investment.
The CBN linked this funding volatility directly to global monetary policy, stating that the sharp rise in interest rates in advanced economies in 2022 contributed to a noticeable slowdown in venture capital flows. This external dependence increases currency risk and threatens sustainable development during periods of tightened international financial conditions. The report stresses that deepening local financing channels, particularly through better utilization of Nigeria’s capital markets, is essential to insulate the sector and ensure long-term stability.
Governor Olayemi Cardoso acknowledged the sector’s resilience and transformation, noting that improved macroeconomic and currency stability now present fresh opportunities for scaled financial inclusion. However, he emphasized that the journey requires a robust domestic financial foundation.
The report also highlighted critical regulatory and operational hurdles. A stakeholder survey revealed that 87.5% of fintech firms view high regulatory and compliance costs as a major barrier to innovation, with delays in product approvals cited as a key bottleneck. Strengthening system integrity through compliance reforms, anti-money laundering supervision, and consumer protection is identified as vital to maintaining investor confidence.
Looking ahead, 62.5% of surveyed firms plan regional expansion and support for regulatory passporting frameworks across Africa. The CBN cautioned that such cross-border growth must be underpinned by stable funding and coordinated regulation to succeed.
On infrastructure, Nigeria’s real-time payments system remains a standout achievement. The NIBSS Instant Payments (NIP) platform processed over 11 billion transactions in 2024, up from five billion in 2022, with instant channels now handling more than 25% of all electronic transactions. The CBN describes NIP as one of the world’s most mature and widely adopted instant payment systems.
Ultimately, the CBN’s strategy centers on fostering domestic funding, modernizing regulation, and bolstering innovation infrastructure. The goal is to cement Nigeria’s role not only as a fintech leader but also as a potential regulatory model for other emerging economies, ensuring growth is resilient, inclusive, and locally anchored.
