Nigeria stands at the peak, formative moment in its technological evolution. With the largest population in Africa and a rapidly growing youth demographic of over 90 million under the age of 18, our nation possesses immense potential to become a leading tech hub. However, this potential remains largely untapped, primarily due to the disconnect between our financial institutions and the tech ecosystem. As someone deeply involved in Nigeria’s financial technology sector, I believe it’s time for our banks and financial institutions to step up and play a more decisive role in nurturing our tech industry.
To put in proper context the Nigerian tech scene has shown remarkable resilience and innovation, with success stories making waves globally. Paystack’s landmark $200 million acquisition by Stripe, and Andela’s successful expansion across four continents demonstrate the immense potential of Nigerian tech companies. Yet, for every success story, countless promising startups struggle to access the financial resources they need to scale. Traditional financial institutions often view tech startups as high-risk ventures, leading to a significant funding gap that hampers innovation and growth.
In hindsight, global financial landscape shows us what’s possible. In India, for instance, the collaboration between HDFC Bank and tech startups has created a vibrant fintech ecosystem. Standard Bank in South Africa has successfully launched an enterprise development programme that has supported over 100 tech startups through funding and mentorship. These examples show how financial institutions can catalyse tech growth.
When it comes to infrastructural development, Nigeria must learn from successful models implemented by other emerging economies. India’s comprehensive digital infrastructure through India Stack and UPI, Singapore’s Smart Nation Initiative with nationwide fiber optic coverage demonstrate how robust digital infrastructure can accelerate tech growth. Nigeria needs to address critical challenges by implementing distributed power solutions for tech hubs, accelerating the National Broadband Plan, establishing more Internet Exchange Points, and developing tier-3 and tier-4 data centers across major cities. Creating dedicated tech hubs with shared facilities and guaranteed power supply, similar to Singapore’s approach, would provide the stable foundation needed for tech companies to thrive.
Financial institutions must also recognise that supporting tech innovation isn’t just about providing capital—it’s about creating an entire ecosystem of support. Banks need to develop tech-focused lending products that consider the unique characteristics of technology businesses, similar to how Silicon Valley Bank (before its acquisition by First Citizens Bank) specialised in serving the tech industry. Traditional collateral-based lending models don’t work for companies whose primary assets are intellectual property and human capital. We need innovative financing solutions that evaluate potential based on metrics like user growth, revenue trajectory, and market opportunity.
Beyond lending, financial institutions can leverage their existing infrastructure to provide payment APIs, banking-as-a-service platforms, and other technical tools that tech companies need to build and scale their solutions. The success of Mono, a Nigerian fintech that has connected over 250,000 bank accounts through its API, demonstrates the potential of such infrastructure sharing. Access Bank’s partnership with tech accelerator GreenHouse Lab and Zenith Bank’s tech innovation fund show early promising steps in this direction.
Looking ahead, financial institutions must take concrete steps to implement these changes. Companies like TeamApt (now Moniepoint) and Interswitch have shown how tech companies can transform into multi-billion dollar enterprises with proper financial backing. The recent success of Y Combinator-backed Nigerian startups like Bamboo and Kippa further emphasizes the global appetite for Nigerian tech innovation.
The time for incremental change has passed. Nigeria’s financial institutions must make bold reforms to support our tech ecosystem. This means committing significant capital to tech-focused investment funds, similar to how UBA’s involvement in the $120 million Nigerian Innovation Fund has catalysed growth. It requires reforming lending policies to accommodate tech businesses, building technical capabilities within traditional banking institutions, developing partnerships with global tech investors like Softbank and Sequoia Capital, and creating dedicated tech support units within banks.
As with the bold reforms to the policy and regulatory landscape required, Nigeria must draw inspiration from global success stories. Estonia’s digital-first approach with its e-Residency programme, Israel’s innovation-friendly policies with substantial R&D tax incentives, and Rwanda’s tech-focused Special Economic Zones offer valuable lessons for Nigeria. While the Nigeria Startup Act 2022 and National Digital Economy Policy provide a foundation, there’s a pressing need to harmonise regulations under a single interface, introduce tech-specific tax holidays, strengthen data protection frameworks, and establish clear guidelines for emerging technologies. Countries like Rwanda and Estonia have shown how streamlined, tech-friendly regulations can attract international investment and foster local innovation, a path Nigeria must follow to realise its tech potential.
The future of Nigeria’s economy is increasingly digital, and our financial institutions must evolve to support this transformation. By taking decisive action now, banks and other financial institutions can help position Nigeria as Africa’s premier tech hub while securing their own relevance in an increasingly digital world. The success of Nigeria’s tech ecosystem and our financial sector are inextricably linked. It’s time for our financial institutions to embrace this reality and take the lead in building the foundation for a thriving tech industry. The potential is there—we just need the courage and vision to unlock it.
Emmanuel Effiong is a Software Engineer and Technology Consultant with over 5 years of experience in Nigeria’s tech ecosystem. He has led development teams and consulted for SME’s transforming them from analog to digital way of doing business, Emmanuel has been instrumental in building scalable financial technology solutions across West Africa. He currently serves as a technical advisor to several fintech startups and regularly contributes to open-source projects focused on improving financial inclusion in Africa.
