Fintech holds the key to Africa’s economic prosperity, Nigeria must continue to lead the way

Before founding Flutterwave, I worked in different companies and countries, including South Africa. During one of my stints, I learned of a few large South African companies that had expanded into Nigeria and other African countries but couldn’t figure out how to pay employees easily. There was no product at that time to make cross-border payments so seamless for them and this happened to hinder their expansion and perhaps even discourage further recruitment in Nigeria at that time.

I have tried to fill in the gaps in their expansion strategy. Were they planning to hire even more people in Nigeria? Would they have done more in Nigeria at that time if they had the payment infrastructure to pay workers seamlessly? And for those who lost out working for such a multinational company; would they have been better off if there was an ideal state that allowed them to get the job and get paid quickly and without problems?

For me, it is in this story that I see the power and promise of fintech here at home in Nigeria and across the continent.

The development of fintech over the past decade has been rapid, with Africa at the forefront of the global fintech revolution. Having often been ranked as a top 5 leading African country for the sector, it is no surprise that of the seven unicorns on the continent, five are Nigeria-founded and three are fintech companies. This feat is worth celebrating as Nigeria marks its 62nd birthday today.

Among the major advances has been the increased use of digital financial tools and platforms across the continent. The COVID-19 pandemic is largely responsible for spurring the growth of digital payments specifically. This has enabled fintech startups like ours to create huge value for small businesses by building solutions like the Flutterwave store where over 30,000 SMBs sell online. Multinational companies now have one less problem to worry about during their expansion into Nigeria and other African countries, thanks to our solution that connects Africa through payments.

There is growing evidence that the promise of digital financial inclusion to boost economic growth and reduce poverty is enormous. Because of fintech, more people and small businesses have access to accounts, transactions and credit. The development of digital savings, cross-border transfer solutions and insurance also promises more income and jobs. An example is our recent mass recruitment of 200 graduate trainees in Nigeria for our first Graduate Trainee Programme. Examples like these are just the tip of the iceberg of the value the fintech ecosystem can create.

A report by ACI Worldwide and Global Data states that “Nigeria is one of the countries where real-time payments offer the greatest economic growth opportunities. The transactions in 2021 resulted in an estimated cost savings of $296 million for businesses and consumers. This helped unlock $3.2 billion in additional economic output.”

This phenomenal performance and growth is undoubtedly possible because of the enabling environment and leadership that Nigeria continues to provide via regulatory authorities such as the Central Bank of Nigeria (CBN). Exactly one year ago, Nigeria made headlines for being the first African nation to introduce a digital currency, the eNaira. Issued and distributed by the CBN, eNaira enables seamless financial transactions, improves monetary policy and enhances cross-border trade and financial inclusion – and recently joined the robust list of payment options available on Flutterwave.

Are there still challenges in Nigeria? Absolutely.

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Fintech is still relatively new globally and the sector is even younger in Nigeria. As a result, actors in the space experience challenges that are further exacerbated by the characteristically fast pace of digital innovation, with which regulation can struggle to keep up. Other challenges include achieving scale and profitability, new infrastructure, all while building strong corporate cultures. But despite these obstacles, Nigerian innovators have remained resilient, continuing to build and strive until we figure it all out.

As a firm, we have navigated operational challenges by strengthening our talent pool and working with regulators to ensure compliance at all times. This was recently validated by the Central Bank of Nigeria, which granted us the most sought-after payment license in the country – the exchange and processing license which enables faster transactions, enhanced security and also gives us the opportunity to unlock and develop innovative products to trigger economic growth and financial inclusion.

Although there is still a long way to go to build the fintech ecosystem in Nigeria, we will continue to fly the Nigerian flag proudly.

Today’s celebration of Nigeria’s independence marks the renewal of our commitment to the country and the continent as a whole. On behalf of our 700-strong team of Wavers, I thank our partners, investors, board, regulators, vendors and community for the company we have built today. But most importantly, I am grateful to the millions of Nigerians who have helped write the Flutterwave story; it really takes a nation to build a global company.

Happy Independence Day, Nigeria.

*Olugbenga Agboola is the founder and CEO, Flutterwave