Where is Nigeria’s Fintech Sector Headed in 2023?

In the past few years, Nigeria has become one of the major leaders in financial technology (fintech) in Africa, with a flourishing landscape with several businesses and investments that keep it running. The sector presents many opportunities, especially for digital payments, digital assets, digital investing, and more. Nigeria also has a large market to tap into; with 200 million Nigerians and a large youth population, there’s much room for growth and development at the hands of young people who are growing up alongside many technological innovations in a rich digital and online landscape.

Though the outlook on Nigeria’s fintech sector is optimistic in 2023, some hurdles still need to be faced. Many citizens are not aware of or know how to utilize the fintech solutions despite their widespread growth. Nigeria’s young people also need more training and guidance in tech to build skills for employment that can further boost the growth of fintech and the overall economy. Many fintech startups in the country still experience failure and need investments and support to achieve more success. If Nigeria can continue to foster a robust ecosystem for innovation and technology while uplifting crucial groups of people and businesses, the fintech sector may continue to advance in 2023 and in the coming years.

Blockchain and crypto

Web 3.0 has been an emerging field of interest globally, with more people in the digital space seeking a decentralized internet built on a blockchain network that is free from the control of large entities. Nigeria is one of the top countries for blockchain technology adoption worldwide, and the country has also recently passed a national blockchain policy this year. This policy aims to further institutionalize it in the country’s economic and security sectors.

Blockchain’s transparent and immutable way of keeping records has the potential to revolutionize industries by enabling secure and efficient peer-to-peer transactions without other parties interfering. With Nigeria’s openness to integrating blockchain in the country, tech-savvy Nigerians have more room to build platforms and develop businesses that revolve around this type of technology. 2023 has become a good year for blockchain adoption and its opportunities for industry growth, job creation, and wealth building.

Another area related to blockchain and fintech is cryptocurrency, a digital asset that acts like money and is used for transactions. Blockchain acts as a digital ledger to record these exchanges and keep them secure and without alteration. Nigeria has its own digital currency, the eNaira, built on the Hyperledger Fabric blockchain protocol. The country recognizes it as legal tender, and it can be used as cash for payments and transactions. Though it’s not as flexible as other cryptocurrencies, it is unique in that it is one of the only ones in the world issued and regulated by a government authority, showcasing Nigeria’s openness to integrating fintech into the country’s systems. Other cryptocurrency operations currently aren’t allowed in the country, but if blockchain technology can prove its worth this year, considerations may be made to permit more crypto transactions in Nigeria.

Trading platforms

Technology has advanced enough to provide Nigerians access and the ability to participate in financial markets through online trading. Trading platforms have risen in popularity worldwide; they offer various analytical tools, a vast number of trading instruments, and protective measures to allow traders to make smarter trading decisions.

Globally, MetaTrader 4 (MT4) is one of the most widely recognized trading platforms for a wide variety of financial instruments. International brokerage Exness is one of the many brokerage services offering MetaTrader 4, as it is preferred by online foreign exchange traders who want to maximize MT4’s analytical features. Flexible trading systems, algorithmic trading, and mobile trading make it easier for traders to invest and trade online, regardless of skill level or experience. With the help of pre-installed Expert Advisors (EA) and technical indicators, it’s also possible to fully automate trading and analytical tasks. Customizable scripts let individual traders personalize the experience.

With more access to financial markets with the help of online and mobile trading platforms in 2023, it’s much easier for Nigerians to build individual wealth outside of traditional financial systems and participate in the economy’s growth. With more individual investors in the markets, they can provide stability and prevent volatile price changes that affect the market and traders significantly. Many platforms are available which can address the needs, goals, and capabilities of traders, and advancements in fintech can continue to bring awareness to trading opportunities to reach more Nigerians of all ages.

Payments

Payments are among the most extensive areas for fintech integration. Digital payments have seen a monumental rise worldwide, with more people looking to make more convenient transactions while being able to monitor their finances and budgets on the go. Mobile wallets and card payments are emerging as popular ways to pay due to their ease of use. Nigeria is Africa’s leader in real-time and digital payments, unlocking even more growth for the continent’s biggest economy.

Many Nigerian startups in fintech revolve around online payments or alternative banking systems, allowing for digital transactions, sending and receiving money, or saving money at higher interest than traditional banks. Flutterwave is one of the top businesses in this sphere, which allows businesses to accept online payments. It’s also been partnering with international companies to broaden and improve its services, connecting Nigerians to more global companies and processing their transactions. It’s clear why these fintech startups are one of the most popular in Nigeria, as they present more ways to pay, save, and invest money without the need for traditional banking.

In 2023, Nigeria is also extending the use of technology for payments and tax collection in other sectors. President Bola Ahmed Tinubu’s government recently announced a tax on market traders and the informal sector. The Federal Inland Revenue Service (FIRS) partnered with the Market Traders Association of Nigeria (MATAN) for the easy collection of Value-Added Tax (VAT) from its members. The VAT Direct Initiative (VDI) would be done using a unified systems technology, allowing for simpler VAT payment and remittance for the marketplace and informal sector.

Allowing platforms to collect these fees can make it easier for marketplaces to manage taxes without the hassle and stress of manual filing. With MATAN’s membership of over 40 million traders across the country, allowing for digital VAT payments will make tracking traders easier, preventing costly errors or illegal collection. There is hope that the VDI will enhance VAT revenue, providing economic development through funding infrastructure, social amenities, and citizen welfare.

Nigeria’s fintech sector is one of the most developed in Africa, but there is still much room for improvement. Despite some setbacks, much potential can be taken advantage of to fuel more growth in 2023. The country will likely continue to push for more digital solutions for transactions and record-keeping, adopting fintech into various sectors and institutions. This year may also see more initiatives for training the next generation of young innovators and investors, which will boost the industry’s development and contribute significantly to the advancement of the country and potentially other African regions. If the government can make the right moves regarding these aspects of fintech, 2023 may set the stage for further change.