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Nigeria’s fintech sector, one of Africa’s fastest-growing, remains heavily dependent on foreign investment, exposing it to swings in global markets, the Central Bank of Nigeria said in its 2025 Fintech Policy Insight Report.

Startups in the country raised $520m in equity funding in 2024, down from about $747m in 2019, when Nigeria captured roughly 37 per cent of all African startup investment. The report said the sector has shown resilience despite global economic pressures, but warned that reliance on external capital leaves it vulnerable to market fluctuations.

This performance, amid significant global macroeconomic gyrations, underscores Nigeria’s position as a key hub for financial innovation. The sharp rise in interest rates in advanced economies during 2022 contributed to a slowdown in venture capital funding.

“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 apex bank stated.

The CBN Governor, Olayemi Cardoso, said Nigeria is undergoing a rapid and significant financial evolution. Over the past decade, the nation’s fintech landscape has grown from a handful of startups into one of Africa’s most vibrant innovation ecosystems.

“Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change. Today, with improved stability of our currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale,” the executive commented on the report.

In addition to funding, the central bank underscored Nigeria’s continued leadership in digital financial infrastructure. More than 25 per cent of all electronic transactions in Africa’s most populous nation are processed via real-time payment channels, with close to 11 billion transactions processed in 2024, up from five billion in 2022. The report described Nigeria’s instant payments platform, NIBSS NIP, as among the most mature and widely adopted globally.

The report also mentioned the need to strengthen system integrity and reputation, pointing to compliance reforms, anti-money laundering supervision, and consumer protection measures as key priorities for sustaining investor confidence.

By focusing on domestic funding, regulatory modernisation, and innovation infrastructure, the CBN aims to position Nigeria not only as a fintech frontrunner but also as a rule-setter whose regulatory lessons are relevant to peer emerging and high-growth economies globally, the central bank said.

Stakeholders surveyed by the CBN also cited compliance costs as a significant challenge to innovation. According to the report, 87.5 per cent of respondents said that the cost of meeting regulatory and risk requirements significantly impacts their capacity to innovate, while delays in product approvals and regulatory timelines also remain major bottlenecks.

The report noted that 62.5 per cent of fintech firms plan to expand regionally, and there is strong support for regulatory passporting frameworks to enable compliant expansion into other African markets. However, the CBN warns that such cross-border growth requires a stable funding base and coordinated regulation.