Nigeria’s fintech sector, one of Africa’s fastest-growing innovation spaces, remains heavily dependent on foreign investment, leaving it exposed to volatility in global markets, the Central Bank of Nigeria (CBN) has warned.
In its 2025 Fintech Policy Insight Report, the apex bank said startups in the country raised $520m in equity funding in 2024, down from about $747m in 2019 – the year Nigeria accounted for roughly 37% of all startup investment across the continent.
While the CBN said the industry had shown resilience despite global economic pressures, it cautioned that its reliance on external capital made it vulnerable to market swings.
The report said the slowdown in venture capital funding was partly driven by the sharp rise in interest rates in advanced economies in 2022, which tightened access to funding for emerging market startups.
“These dynamics highlight the importance of developing domestic funding avenues, such as leveraging Nigeria’s capital markets, to reduce currency risk and sustain fintech growth,” the CBN said.
The central bank governor, Olayemi Cardoso, said Nigeria was undergoing a “rapid and significant” financial evolution, with fintech firms increasingly shaping the country’s economic future.
Over the past decade, he said, the ecosystem had grown from a handful of startups into one of Africa’s most vibrant technology hubs.
“Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change,” Cardoso said.
“Today, with improved stability of our currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale.”
Beyond funding, the CBN highlighted Nigeria’s continued dominance in digital payment infrastructure, noting that more than a quarter of all electronic transactions in Africa’s most populous country are processed through real-time payment channels.
According to the report, nearly 11 billion transactions were processed in 2024, up from five billion in 2022. It described Nigeria’s instant payments platform, NIBSS NIP, as one of the most mature and widely adopted globally.
However, the central bank said the next phase of fintech growth must be matched by stronger safeguards to protect system integrity and sustain investor confidence.
It pointed to compliance reforms, anti-money laundering supervision and consumer protection as key priorities.
By combining domestic funding strategies with regulatory modernisation and stronger innovation infrastructure, the CBN said it hoped to position Nigeria not just as a fintech leader, but as a rule-setter whose regulatory lessons could guide other high-growth economies.
The report also flagged regulatory compliance costs as a major obstacle to innovation. It found that 87.5% of surveyed stakeholders said the expense of meeting risk and compliance requirements was significantly affecting their ability to innovate.
Delays in product approvals and regulatory timelines were also identified as persistent bottlenecks.
Despite these challenges, the report said 62.5% of fintech firms plan to expand across the region, with growing support for regulatory “passporting” frameworks that would allow compliant firms to operate more easily across African markets.
But the CBN warned that such cross-border expansion would require a stable funding base and stronger coordination between regulators.
