CBN Warns Nigeria’s Fintech Sector Faces Risks from Heavy Foreign Investment Dependence
Nigeria’s fintech sector, one of Africa’s fastest-growing industries, continues to rely heavily on foreign investment, leaving it exposed to global market swings, the Central Bank of Nigeria (CBN) has warned. According to the 2025 Fintech Policy Insight Report, startups raised $520 million in equity funding in 2024—a significant drop from $747 million in 2019, when Nigeria captured nearly 37% of all African startup investments. While the sector has remained resilient despite global economic pressures, the CBN cautioned that dependence on external capital increases vulnerability to international financial fluctuations.
CBN Governor Olayemi Cardoso emphasized that Nigeria is undergoing a rapid financial transformation, with the fintech ecosystem evolving from a handful of startups a decade ago into a hub of innovation and digital financial inclusion. “Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change,” Cardoso said. He highlighted that improvements in currency stability and domestic economic conditions create opportunities for financial innovation to expand inclusion across the country.
Beyond funding, Nigeria has strengthened its digital financial infrastructure, the report notes. More than a quarter of all electronic transactions in the country are processed via real-time payment channels, with close to 11 billion transactions completed in 2024—up from five billion in 2022. The report singled out the National Inter-Bank Settlement System’s Instant Payments (NIBSS NIP) as one of the most mature and widely adopted instant payment platforms globally, cementing Nigeria’s leadership in digital financial services.
However, the report also highlighted challenges that could hinder the sector’s growth. High compliance costs, delays in product approvals, and regulatory bottlenecks were cited by 87.5% of surveyed fintech firms as significant barriers to innovation. The CBN stressed that strengthening regulatory frameworks, anti-money laundering supervision, and consumer protection measures will be crucial to maintain investor confidence and sustain growth.
Looking forward, the CBN urged fintech firms to explore domestic funding avenues, including leveraging Nigeria’s capital markets, to reduce currency risk and create a stable foundation for regional expansion. With 62.5% of fintech firms planning to scale operations across Africa, coordinated regulation and a stronger domestic investment base are essential. By modernizing regulation and supporting innovation infrastructure, Nigeria aims to position itself not only as a fintech frontrunner but also as a model for emerging economies seeking sustainable digital financial growth.
source: punch