Nigeria’s fintech industry drew more than $2 billion in investments in 2024, underscoring its growing importance as a key driver of economic growth. According to the nation’s 2024 Economic Report released on Friday, these figures are expected to increase further in 2025 as digital financial services, including e-commerce, digital lending, and mobile banking, become more accessible.
The report, presented in Abuja by the Office of the Special Adviser to Nigeria’s President on Economic Affairs (in the Office of the Vice President), identifies telecommunications and ICT as primary sectors propelling the country’s economic growth in 2024. The report projects that these investments could double or triple in 2025.
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“Nigeria’s telecommunications and ICT sector is one of the fastest-growing in Africa, contributing approximately 18.9 percent to GDP in 2024,” the West African nation’s economic report stated.
“Nigeria’s fintech ecosystem, which attracted over $2 billion in investments in 2024, will continue to flourish in 2025, as digital financial services such as mobile banking, digital lending, and e-commerce expand,” it added.
Nigeria’s tech startups to attract $3 billion in foreign investment next year
The report also stated that the telecommunications and ICT sector is projected to rise by eight to 10 percent in 2025 due to the deployment of 5G networks and increased Internet usage.
By 2025, Nigeria’s technology startup ecosystem is expected to attract over $3 billion in foreign investment, playing a crucial role in fostering innovation and creating high-paying jobs for Nigerians.
“Telecommunications and ICT, a major growth driver, contributed approximately 19.78 percent to GDP at this time in 2024, up from 19.54 percent recorded in the same period in 2023 and higher than in the first quarter of 2024 at 17.89 percent,” the report added.
With forecasts showing sustained increase, ICT’s share of GDP might reach 22 percent by 2025, according to the analysis, which included input from the federal government, the Nigerian Economic Summit Group (NESG), and Global Analytics Consulting.
The report did, however, also point up certain difficulties Nigerian fintech and communication systems face. These consist of a limited industry, regulatory concerns, infrastructure limits, and purchasing power restrictions.
Kenya overtook Nigeria as Africa’s top startup investment destination
In 2023, Kenya overtook Nigeria as Africa’s top startup investment destination, a position it had held for years.
Startups in Nigeria raised $410 million, while those in Kenya raised over $800 million, the most on the continent.
During the first half of 2024, $780 million was raised by African startups. The highest amount of this funding—$244 million, or 32 percent of the total—was raised by Kenyan firms, while Nigerian startups received about $172 million.
A part of $101 million went to Egypt, while $85 million went to South Africa.
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Rising fraud concerns in Nigeria’s fintech industry
The Economic and Financial Crimes Commission (EFCC) recently expressed worries about a rise in fraudulent activities in Nigeria’s financial industry, namely among the unbanked, underserved, and middle-class communities, despite the advancements achieved by fintech platforms.
The EFCC blamed this trend on some fintech companies’ failure to follow strong Know Your Customer (KYC) procedures.
The EFCC Chairman, Olanipekun Olukoyede pointed out that a lot of fintech companies disregard stringent KYC regulations, especially when onboarding clients for tier-one accounts.
Fintech companies’ lacklustre attitude in disregarding KYC protocol, according to Mr Olukoyede, creates vulnerabilities that scammers exploit.