The Central Bank of Nigeria has raised concerns over the country’s fast-growing fintech industry’s heavy dependence on foreign funding, warning that the trend exposes startups to global economic shocks and volatile capital flows.
In its 2025 Fintech Policy Insight Report released on Sunday, the apex bank disclosed that Nigerian startups raised $520m in equity funding in 2024, down from about $747m in 2019 when the country accounted for nearly 37 per cent of total startup investments across Africa.
Despite the decline, the CBN said the sector has remained resilient amid global macroeconomic headwinds, including sharp interest rate hikes in advanced economies that slowed venture capital flows across emerging markets.
“These dynamics underscore the urgent need to deepen domestic funding channels, particularly by leveraging Nigeria’s capital markets, to reduce currency risk and ensure sustainable fintech growth,” the bank stated.
CBN Governor, Olayemi Cardoso, said Nigeria’s fintech ecosystem has evolved rapidly over the past decade, growing from a handful of startups into one of Africa’s most vibrant innovation hubs.
“Even in the face of global economic pressures, Nigerian fintech firms have continued to attract investment and drive transformation. With improving currency stability and macroeconomic outlook, financial innovation can now scale inclusion more sustainably,” Cardoso said.
The report also highlighted Nigeria’s leadership in digital payment infrastructure, noting that more than 25 per cent of electronic transactions in the country are processed through real-time payment systems.
About 11 billion instant payments were recorded in 2024, up from five billion in 2022, with the Nigeria Inter-Bank Settlement System Instant Payment platform ranked among the most mature globally.
However, the apex bank warned that system integrity, consumer protection, and anti-money laundering compliance must be strengthened to sustain investor confidence and protect the ecosystem from reputational risks.
Stakeholders surveyed by the CBN identified compliance costs as a major constraint, with 87.5 per cent saying regulatory and risk management expenses significantly limit their capacity to innovate.
Delays in product approvals and regulatory timelines were also cited as persistent bottlenecks.
While 62.5 per cent of fintech firms plan regional expansion, the CBN said cross-border growth would only be viable with a stronger domestic funding base and coordinated regulatory frameworks, including regulatory passporting across African markets.
The bank said its renewed focus on domestic capital mobilisation, regulatory modernisation, and digital infrastructure development is aimed at positioning Nigeria not only as Africa’s fintech leader but also as a global reference point for fintech regulation in emerging economies.
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