Curating Nigeria's fintech ecosystem

Nigeria's Fintech ecosystem is booming with over 200 standalone companies offering a wide range of services from payment solutions to consumer lending. Despite the growth and potential of the market, analysts believe that the industry has only scratched the surface when it comes to market penetration, segmentation, and distribution. Ade Bajomo, the President of the Fintech Association of Nigeria, recently discussed the state of Nigeria's Fintech ecosystem in an interview with CNBC Africa. One of the key topics of discussion was the development of central bank digital currencies (CBDCs) in Nigeria. Bajomo expressed his support for CBDCs, highlighting the importance of embracing digital currencies in the era of the digital age. He commended the Central Bank of Nigeria for taking steps to implement CBDCs and emphasized the potential benefits in terms of financial inclusion and data collection. However, he also raised important considerations around the design and regulation of CBDCs, noting that different approaches, whether centralized or decentralized, come with their own set of advantages and disadvantages. When asked about the collaboration between the central bank and a foreign partner for the CBDC project, Bajomo stressed the need to focus on the opportunities that arise from the initiative. He emphasized the potential for Nigeria to lead in digital innovation and for local businesses and innovators to capitalize on the growing ecosystem. Bajomo highlighted the importance of security and data opportunities that come with programmable money, and the potential for Nigeria to position itself as a leader in digital currency innovation. Another significant topic discussed in the interview was the emergence of unicorns in the Nigerian market. Bajomo noted that Nigeria has produced four out of five fintech unicorns on the African continent, attracting substantial investments. While acknowledging the progress, he highlighted the need to focus on solving African problems with African solutions. Bajomo emphasized the unique opportunities that Nigeria offers for startups to understand local needs and create innovative solutions that cater to African communities. The interview also touched upon the challenges facing fintechs in Nigeria, particularly the scarcity of technical talent and disproportionate regulations. Bajomo referenced a census report conducted in partnership with EY, which identified these as the main obstacles for fintech companies. He highlighted the global talent shortage and emphasized the need for collaboration between local and global talent pools to address the issue. Bajomo mentioned initiatives by FinTech NGR to support regulators in developing regulations and fostering talent through projects like Digestots. In conclusion, Nigeria's fintech ecosystem presents significant opportunities for growth and innovation, but also faces challenges that need to be addressed to fully realize its potential. With the right regulatory frameworks, talent development initiatives, and a focus on leveraging digital currency technologies, Nigeria can solidify its position as a leader in the digital financial space.