Nigeria’s FinTech sector is undoubtedly a very vibrant sector that has the potential to transform lives while also enhancing the economic fortunes of the nation. Recent studies have shown that the market’s largest segment, digital payment, has boosted a total transaction value of about US$ 14.2 million in 2023. Statistica.com, an advanced analytics software package that provides insights on data analysis, data management, and data mining also reveals that this Neobanking segment is expected to show a revenue growth of 43.4 percent by 2024.
It, therefore, did not come as a surprise when the concern became a subject of public discourse at the presidential inauguration of Investing in Digital and Creative Enterprises (I-DICE), an event organised to address major economic issues while also driving Nigeria’s economic prosperity. The programme was flagged off by Vice President Yemi Osinbajo. At the event, stakeholders harped on the need to involve a greater number of the youth in key economic activities in a bid to foster economic growth and development.
Dr. Adewunmi Adesina, President of the African Development Bank (AfDB) Group, in his address, said it was high time Nigeria developed a youth-based wealth that supports a more inclusive Nigerian economy. He noted that the I-DICE project will create the ecosystems needed to enable more competitive entrepreneurs using digital technologies. He said: “We’re here to launch the initiative, but what we’re actually doing is launching something greater. We are launching a new era of youth optimism. We are launching platforms that will improve the youth of Nigeria’s aptitude and potential to succeed. We are starting the process of creating millions of jobs.” He added, “Nigeria is being retooled to better compete in a world that is becoming more digital. With the help of the youth, we are fostering optimism for a brand-new Nigeria.”
FinTech arguably provides an enabling financial channel to include the base of the pyramid, reduce financial exclusion, poverty rate and economic inequality. It is also noteworthy that the UN 2030 Agenda for Sustainable Development recognises the importance of FinTech. If this aforementioned is matched by youth vibrancy and creativity, including effective policies that seek to promote financial services, then Nigeria seems to be on its path towards a sustainable economic prosperity is on cruise control.
The AfDB honcho further reiterated that Nigeria’s future will depend on what it does with its young population. His words: “It is time to develop youth-based wealth for Nigeria, adding that youth-based wealth will significantly increase job growth, increase the fiscal space with new revenue sources, and support a more inclusive Nigerian economy, both now and in the future. Adesina further disclosed this was the reason his team launched the Jobs for Youth in Africa initiative soon after he was elected president of the African Development Bank. He added that the program focuses on workable and high-impact solutions which could potentially create about 25 million jobs by 2026.
The Future is here
The AfDB boss maintains that the future is here, and every aspect of life is digitally transformed. “When you think digital, think global, he affirms that based on estimates, the digital global health size of Africa would expand from US$217billion in 2022 to more than US$1trillion dollars by 2031, an incredible growth. He stated the size of Africa’s digital economy will rise from US$115 billion today to US$712billion by 2050, and that most of this growth is already driven by four countries: Nigeria, South Africa, Kenya, and Egypt. He added that several factors, including the rapid growth in the youth population, drove the expansion of the digital economy.
On digital trends, Adesina said digital trends hold great promise to help create massive jobs. “For example, estimates by Endeavor (2022) show that expanding digital infrastructure by 10 percent will lead to a 2.5 percent annual growth in Gross Domestic Product (GDP) in Africa. Furthermore, expanding access to the internet in Africa from the current 33 per cent to 75 percent can help create 44 million jobs, including three million jobs in online services by 2025,” he said.
The former Minister of Agriculture President Goodluck Jonathan’s cabinet said Nigeria was already witnessing the power of digital technologies, tools, and platforms. According to him, Nigeria currently has five out of the 11 digital companies that have reached the status of unicorn with market valuation of US$1billion. He listed the companies to include Jumia, Interswitch, Opay, Flutterwave and Andela, mainly in FinTech. He further disclosed that AfDB is providing US$170million in financing to the programme.
“I am delighted that we have been able to mobilise additional co-financing of US$217million toward the programme. I wish to thank our partners, the Agence Francaise de Développement (AFD), which is providing US$100million, and the Islamic Development Bank, which is providing US$70million. I also thank the Bank of Industry and the Federal Government of Nigeria for providing US$45million in counterpart funding. Through the independent fund managers for I-DICE, the programme will raise an additional capital of between US$131million and $262million,” he said.
With this development, it is therefore imperative for the incoming administration, in a bid to calibrate the economy towards sustainable development, to scale up the involvement of the youth in the commercial activities of the nation for a more vibrant economy. Policy formulation and effective implementation are also critical to a more commercially viable fintech sector in Nigeria’s drive towards transforming its economic fortunes.
