The Central Bank of Nigeria (CBN) has cautioned that Nigeria’s rapidly expanding fintech sector remains highly exposed to external shocks due to its continued reliance on foreign investment, despite its status as one of Africa’s leading innovation hubs.
The warning was contained in the apex bank’s 2025 Fintech Policy Insight Report, which highlighted both the resilience of the sector and the structural risks posed by dependence on offshore capital flows.
According to the report, Nigerian startups raised approximately $520 million in equity funding in 2024, a decline from the $747 million recorded in 2019, a year when Nigeria accounted for about 37 per cent of total startup investment across Africa.
While the CBN acknowledged that fintech firms have continued to attract funding amid global economic uncertainty, it stressed that heavy exposure to international capital markets leaves the sector vulnerable to global interest rate cycles and currency volatility.
The report linked the slowdown in venture capital inflows partly to aggressive monetary tightening in advanced economies, particularly the sharp rise in global interest rates that began in 2022.
“These developments reinforce the urgency of building strong domestic funding channels, including deeper use of Nigeria’s capital markets, to mitigate foreign exchange risks and sustain long-term fintech expansion,” the CBN stated.
CBN Governor, Olayemi Cardoso, noted that Nigeria’s financial system is undergoing a profound transformation, driven largely by technology-enabled innovation over the past decade.
From a small cluster of startups, Nigeria’s fintech ecosystem has evolved into one of the most dynamic in Africa, contributing significantly to financial inclusion, payment efficiency, and digital access to financial services.
“Despite global headwinds, Nigerian fintech companies continued to attract investment and deliver innovation,” Cardoso said. “With improved macroeconomic stability and a more stable currency environment, the potential for financial innovation to scale inclusion has never been clearer.”
Beyond funding concerns, the report underscored Nigeria’s leadership in digital payment infrastructure. More than a quarter of all electronic transactions in the country are now processed through real-time payment systems.
In 2024 alone, nearly 11 billion instant payment transactions were processed, up sharply from five billion transactions recorded in 2022. The Nigeria Inter-Bank Settlement System Instant Payments (NIBSS NIP) platform was described as one of the most advanced and widely adopted real-time payment systems globally.
However, the CBN emphasised the need to strengthen institutional integrity and regulatory credibility to sustain investor confidence. Key focus areas include enhanced compliance oversight, anti-money laundering enforcement, and stronger consumer protection frameworks.
The report also revealed growing concern among industry stakeholders over rising compliance costs. About 87.5 per cent of surveyed fintech firms said regulatory and risk management expenses significantly constrain their ability to innovate, while delays in approval timelines were identified as persistent operational challenges.
Looking ahead, 62.5 per cent of fintech firms indicated plans for regional expansion, with strong industry backing for regulatory passporting frameworks that would allow compliant firms to operate seamlessly across African markets.
The CBN cautioned, however, that successful cross-border expansion will require stable domestic funding sources and greater regulatory coordination across jurisdictions.
By prioritising domestic capital mobilisation, regulatory modernisation, and infrastructure development, the central bank said Nigeria is positioning itself not only as a fintech leader but also as a regulatory reference point for other emerging and high-growth economies.
 has cautioned that Nigeria’s rapidly expanding fintech sector remains highly exposed to external shocks due to its continued reliance on foreign investment, despite its status as one of Africa’s leading innovation hubs.){kind=link}