Nigeria’s fintech sector maintained its position as Africa’s leading innovation hub in 2024, attracting over $520 million in equity funding despite rising global interest rates and tighter financial conditions, according to the Central Bank of Nigeria (CBN).
The disclosure was contained in the latest CBN Fintech Report, which revealed that Nigerian startups accounted for a significant share of the $2.2 billion raised by African tech firms last year — ranking among the top ecosystems on the continent both in capital raised and deal volume.
The apex bank said the strong performance underscores Nigeria’s dominance in the fintech space, recalling that in 2019, local startups secured about $747 million, representing roughly 37 percent of Africa’s total tech funding that year.
However, the report cautioned that Nigeria’s fintech ecosystem remains overly reliant on foreign capital, leaving it vulnerable to global economic shocks and monetary tightening cycles.
“Nigeria’s fintech funding has largely depended on foreign capital, making the ecosystem vulnerable to global market fluctuations,” the CBN said.
“The sharp rise in interest rates in advanced economies during 2022 contributed to a slowdown in venture capital inflows, which partly explains the dip in fintech investments by 2024.”
To address this challenge, the CBN urged stakeholders to strengthen domestic funding channels, such as leveraging Nigeria’s capital markets, to reduce exposure to currency risks and ensure sustainable growth within the industry.
Fintechs Eye Regional Expansion
The report also revealed that 62.5 percent of Nigerian fintech firms plan to expand regionally, reflecting growing confidence in Africa’s cross-border opportunities.
Stakeholders, according to the CBN, expressed support for the creation of regulatory passporting frameworks — mechanisms that would allow fintechs to operate seamlessly across African markets while remaining compliant with local rules.
The apex bank stressed that delivering a more coordinated and holistic policy approach would require engagement beyond fintech companies, involving broader participation from investors, regulators, and industry associations.
With Nigeria’s fintechs continuing to lead innovation in digital payments, lending, and blockchain services, the CBN said sustaining the sector’s momentum will hinge on homegrown investment, regulatory alignment, and regional integration across Africa.
