Fintech holds the key for Africa’s economic prosperity, Nigeria must continue to lead the way
Before I founded Flutterwave I worked in different companies and countries, including South Africa. During one of my stints, I came to learn of a few big South African companies that had expanded to Nigeria and other African countries, but couldn’t figure out how to pay their staff easily. There was no product than to make cross-border payments this seamless for them and it so happened that this hampered their expansion and maybe even discouraged further recruitment in Nigeria at the time.
I have tried to fill in the blanks of their expansion strategy. Were they planning to hire even more people in Nigeria? Would they have done more in Nigeria at the time if they had the payment infrastructure to pay workers seamlessly? And for those who lost out on working for such a multinational company; would they have been better off if there was an ideal condition that meant that they got the job and were remunerated promptly and without hassles?
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 evolution of fintech in the last decade has been rapid, with Africa at the forefront of the global fintech revolution. Having been frequently ranked 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 her 62nd birthday today.
Among major advances has been the increased uptake of digital financial tools and platforms across the continent. The COVID-19 pandemic is largely responsible for fuelling the growth of digital payment specifically. This has enabled fintech startups such as ours to create enormous value for small businesses by building solutions like the Flutterwave store where over 30,000 SMEs sell online. Multinationals now have one less problem to worry about during their expansion to Nigeria and other African countries, thanks to our solution which connects Africa through payments.
There is growing evidence that the promise of digital financial inclusion in enhancing economic growth and reducing poverty is immense. 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 offers the promise of more income and jobs. An example is our recent mass hiring of 200 graduate trainees in Nigeria for our inaugural Graduate Trainee Programme. Examples such as these are only the tip of the iceberg of the value the fintech ecosystem could create.
A report by ACI Worldwide and Global Data states that “Nigeria is one of the countries for which real-time payments provide the biggest economic growth opportunities. Its transactions in 2021 resulted in an estimated cost savings of $296 million for businesses and consumers. This helped to unlock $3.2 billion of additional economic output”.
This phenomenal performance and growth is undoubtedly possible due to the enabling environment and leadership that Nigeria continues to provide via regulatory authorities such as the Central Bank of Nigeria (CBN). Exactly a year ago, Nigeria made headlines for being the first African nation to introduce a digital currency, the eNaira. Issued and distributed by the CBN, the eNaira enables seamless financial transactions, improves monetary policy, and boosts cross-border trade and financial inclusion – and, more recently, joined the robust list of payment options available on Flutterwave.
Do challenges still exist in Nigeria? Absolutely.
Fintech is still relatively new globally, and the sector is even younger in Nigeria. As a result, players in the space experience teething challenges further worsened by the characteristic fast pace of digital innovation, which regulation can struggle to keep up with. Other challenges include reaching scale and profitability, and fledgling infrastructure, all while building strong company 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 bench and collaborating with regulators to ensure compliance at all times. This was recently validated by the Central Bank of Nigeria, which granted us the most coveted payment license in the country – the switching and processing license which enables faster transactions, improved security, and as well giving us the ability to unlock and develop innovative products to trigger economic growth and financial inclusion.
While 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 Nigeria Independence celebration 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, merchants, and community, for the company we have built today. But most importantly, I am thankful to the millions of Nigerians who have helped to write the Flutterwave story; it truly takes a nation to build a global company.
Happy Independence Day, Nigeria.