It gives me great pleasure to be among you here at the Africa Finance Forum. It is always time well spent when we come together like this to share ideas on ways of propelling the economic growth of the continent. Only a few weeks ago, I was at the Georgetown Africa Business Conference in this city. I see the Africa Finance Forum as a further opportunity to expand on the discussions from that conference and to channel them in various, equally profitable directions. In this instance, there is the platform to explore the role being played by the FinTech industry in driving growth and innovation in the finance sector and financing on the African continent. I thank the organisers for inviting me.


The Corporate Council on Africa is to be commended for the successful convening of this very important event, therefore; and for the inspired focus on the FinTech environment on the continent, which, as we all recognise, is entering into an unprecedented period of boom. I would like to talk a bit about what this holds in store for the continent, but I must also, necessarily, particularise my focus by dwelling on my country, Nigeria. In doing so, I hope to share some background as experienced in Nigeria thus far with regard to FinTech, as well as the steps we are taking in the Nigerian legislature to regulate the banking industry and facilitate digital finance in the country.


FinTech has enjoyed a tremendous upsurge in the global economy, but it is also true that excitement is revving up for Africa as the next frontier in this industry. Consider this encounter related to me just this past week by a friend who went on a 10-hour road trip from Nigerias capital Abuja to the commercial centre of Lagos, in the south-west of the country. He was travelling through stretch of rural countryside when he stopped to buy some plantains from a roadside seller, a young woman with a baby on her back. When he muttered that he could not buy as much as was on offer despite the persuasive sales pitch, due to limited naira notes in his wallet, the woman without missing a beat – asked him in Pidgin English, Oga, You No Get Transfer? Not such a country bumpkin after all. The seller was, of course, referring to the popular USSD or web-based mobile funds transfer services, now offered by most banks in Nigeria. Such is the impact of the digital finance revolution now apace on the continent, you underestimate the rural plantain seller at your peril.


Without a doubt, the success of FinTechs and their chain of strategic responses have challenged the activities of the major actors in the financial services industry across Africa. They are transforming the operational space of traditional innovation; and with a massive potential for creating significant revenue generation opportunities for African economies. The facts speak for themselves. A KPMG Report found that investment in the African FinTech sector quadrupled in the three years up to 2017 from $198 million to $800 million. 2017 was a phenomenally successful year for African tech start-ups in general; over $195 million was raised in funding, an increase of 51 per cent on 2016. This is according to the Disrupt Africa African Tech Start-Ups Funding Report 2017 – which noted that the number of start-ups receiving funding rose to 159. FinTech companies received almost a third of that funding due to their pull for investors eager to tap into the huge potentials in the sector.


Nigeria is now one of the top three African destinations for tech investors. And this should be no surprise. One needs only take a look at the flourishing tech hubs in Yaba in Lagos, Nigeria or Nairobi, Kenya – to get a sense of the radical changes being made possible by technology in the economic landscape of these countries. Naturally, a continent with a fast growing, youth-powered population that is plugged into content production and keen to keep abreast of information, must innovate. With apps and entertainment platforms aided by broadband technology that is driven by young African investors, the industry is scaling new heights. Tech start-ups proved particularly resilient during the recent slump in the Nigerian economy. These companies not only emerged from the recession relatively unscathed, they are attracting major seed funding and driving business growth.


One remarkable factor is the convergence of two sectors: mobile telecommunications and finance. In Nigeria, for example, tele-density has grown from less than one per cent to 108 per cent in just 16 years of the liberalisation of the telecoms sector, making ours one of the fastest growing telecommunications sectors in the world. The Nigerian Communications Commission (NCC) estimates that investment in the sector is now in excess of 68 billion dollars contributing up to 15 trillion naira into the countrys treasury – the Federations Account, as we call it in Nigeria. The sector has created hundreds of thousands of direct and indirect jobs, while also driving businesses and innovations in the ICT sub-sector. This explosion is clear evidence of the uniquely expansive market when you have a population of about 180 million people, half of whom are between the ages of 15 to 35.


And here is really exciting thing, ladies and gentlemen, the potential for growth in this area of convergence, the investment opportunity, is simply incalculable, especially when we are talking of a country like Nigeria. Yes, indeed, 7 out of every 10 Africans own mobile phones but in Nigeria, that corresponds to only 15.5 million smartphone users at present, a mere 23 per cent. Internet penetration is still less than half of the population, at 47 per cent. This really comes into focus in a continent where only 17 per cent of the population has access to banking services. And so, rather than FinTechs role as a disruptive force in the more developed economies such as here in the United States, digital financing is actually the key to bridging the gap in the banking sector across many African countries.


In my speech at the first Africa FinTech Foundry (AFF) 2017 Conference held in Lagos last December, I touched on the need to accelerate the growth of FinTech start-ups that can rise to the challenge of providing access to banking services for the unbanked in Africa. This is so that more people, like that plantain seller by the rural roadside, can be empowered to conduct economic activity and make or receive payment in a seamless manner. It also opens up the economic space for greater financial inclusion, thereby enabling Nigerians at all levels to be drivers of economic growth.


In the 8th National Assembly under my leadership, we have pursued a robust economic legislative agenda; and the two legislative chambers namely the Senate for which I am President; and the Federal House of Representatives have worked closely with the Nigerian Presidency to reform the economy for greater efficiency and transparency. We are working to expand opportunity for our people to grow wealth, create employment and aspire to better standards of living and the private sector is the pivot for realising these goals. We have, therefore, made economic laws a priority, to foster ease of doing business and to increase private sector participation at all levels of the economy.


No fewer than 500 tech start-ups have come up in the Nigerian technology eco-system over the last decade, enabling business processes and by so doing, enhancing economic activity and providing Africa-led solutions to economic problems. However, without funding, many of these ventures and tech start-ups would flounder, to the detriment of the economy. In our pursuit of a robust FinTech-driven digital economy, therefore, we are mindful of the need to use technology to bridge the funding gap between innovators, regulators and government.


We recognise the role of Small and Medium Enterprises (SMEs) in economic growth and development; and that is why the National Assembly has prioritised the passage of landmark economic laws to enable SMEs to grow and prosper, including: the Warehouse Receipts Bill; the Secured Transactions in Movable Assets Bill and the Credit Reporting Bill. SMEs employ around 80 per cent of the Nigerian labour force; and can help bring down the unemployment rate. In light of all of this, the potential of FinTech to grow SMEs cannot be overstated. Nor can we over-emphasise the importance of the use of digital financial services – such as mobile banking, mobile money, internet banking, ATM and PoS machines – to achieve financial inclusion. The ease and cost of processing and collecting payments for products delivered, or services rendered, is critical to the success of the modern-day SME. And, thanks to the growth of the FinTech Industry in Nigeria, the cost of integrating online payments to a website is drastically reduced.


The Central Bank of Nigeria (CBN), as a signatory to the MAYA Declaration, has launched a Nigerian Financial Inclusion Strategy which aims to halve the number of financially excluded Nigerians, to bring it down to 20 per cent by Year 2020. Already, the average citizen can carry out transactions using Short Codes, thus banking is made available to mobile phone users. There is greater ease in carrying out bank transactions, as most banks in Nigeria have mobile apps that enable banking outside bank premises or traditional opening hours. The unbanked are increasingly being banked; financial transactions can now be carried out in areas where there no banks; and Nigerians can easily transfer cash to people in the rural and suburban locations the same way as those in remote areas can carry out transactions without going in search of a bank.


These all point in the direction that Nigeria needs to go, as one of the fastest growing digital financial platforms in the world, in order to reap the full benefits of the FinTech revolution. So far, banks have been the most active players in partnering with FinTechs and rebranding related purchased services. And not for no reason. The 2017 Nigeria FinTech Survey Report by PriceWaterhouseCoopers (PwC) found that more than 62 per cent of bank customers in the country will use mobile applications to access financial services over the next five years. The potential for growth in digital financing is simply enormous in Nigeria; and the signs abound in our business terrain.


This is why this topic is so timely as it is coinciding with our work at the National Assemblyin particular the 8th Senate through the Committee on Banking and Financial Institutionsto ensure financial inclusion for all; especially in the rural areas where a large percentage still remains unbanked; by bridging services between the banking and telecommunications sectors. The two sectors have been meeting to find a financial inclusion or services model that works for the complexities of our people and opens up more opportunities for economic growth at all levels of society. Our model could borrow from the success stories of countries like Kenya and South Africa but will be uniquely tailored to our needs and entrepreneurial spirit.


The net impact of our legislative interventions; through the relevant Committees oversight and engagement will be to expand the ability of our banking sector to facilitate digital financing, expand the opportunity for financial services penetration and reach with the SMEs, and for enterprise support. We believe that these will give a fillip to the development of innovation and private sector capacity across the country. You will agree with me that innovation is the engine that powers financial inclusion. We are therefore working assiduously to encourage innovation in the FinTech space in Nigeria, and we shall continue to do so.


As you might imagine, there are many challenges raised by the growth of FinTech in Nigeria. These include consumer protection and intellectual property issues as well as concerns about money laundering, fraudulent activity and so on. And then there is the data quagmire; legal and ethical questions raised by the use and abuse of data are the subject of global anxiety right now. FinTech growth requires us to pay attention to all of these, and to come up with regulatory frameworks that will safeguard our people. Therefore, as we seek to improve the business environment for SMEs and tech entrepreneurs in Nigeria, we are also committed to passing legislation that strikes a balance between facilitating the sector and maintaining a secure financial system.


We are continuously working work to reframe our payment systems, strengthen mechanisms for electronic commerce, reduce non-performing loans and strengthen the credit market for SMEs through a broad range of legislative interventions. These include: the Electronic Transactions Act; the Bankruptcy and Insolvency Act (Repeal and Re-Enactment) Bill; the Federal Competition and Consumer Protection Commission Act which creates a Consumer Protection Commission to safeguard consumers from fraud and price manipulation; and the Consumer Credit Agency Act which allows lenders to better assess the credit worthiness of loan applicants.


The Credit Reporting Act, which has been signed into law, will enable the market reduce credit delinquencies. This bill would serve as a behaviour changing and institutional framework that brings sanity into the credit community and inspires confidence in the Nigerian market, drawing in more participants.


The Secure Transactions in Movable Assets is the signature bill in our support of SMEs. It frees up capital and creates opportunity for the funding of SME ventures as never seen before in Nigeria. With this law, we have created a new stream of opportunity for SMEs to access capital by using movable goods including small machinery, cell phones and even household items as collateral. The implication of this is enormous in terms of dealing with capital formation and poverty eradication.


Our work is not exhaustive and will continue to adapt to changes that innovation in technology brings. We are confident in the signals we are sending to the world, that Nigeria fully intends to key into the astronomical growth of the FinTech industry and to harness its full potential for the benefit of the largest economy in Africa; and we welcome any partnerships that ensure that this happens.


Thank you.



Federal Republic of Nigeria 

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