A scarcity of hard cash has propelled Nigeria towards embracing e-payments as the new norm, surpassing the 2022 GDP of South Africa, Africa’s third-largest economy. Introduced in response to money laundering concerns, the Nigerian Central Bank’s restrictions on cash withdrawals have accelerated the adoption of electronic payment methods across the country.
Official statistics reveal a staggering increase in digital transactions, with December 2023 witnessing 968 million online transactions alone. The total value of electronic payments surged to US$413.87 billion (600 trillion naira), marking a remarkable 55% rise from the previous year and highlighting Nigeria’s growing reliance on digital payment channels.
The emergence of Nigeria as a fertile ground for fintech innovation has resulted in the establishment of several unicorns, including Interswitch, Flutterwave, Andela, OPay, and Jumia. These startups offer mobile and internet banking solutions, enabling millions of Nigerians to bypass traditional banking systems.
Analysis of transaction data indicates consistent monthly growth, with values escalating from 38.8 trillion naira in January to 71.9 trillion naira in December across various platforms. At US$413.87 billion, the transaction value surpasses South Africa’s entire GDP for 2022, positioning Nigeria at the forefront of digital transformation in Africa.
Furthermore, Nigerian businesses have adapted to the evolving payment landscape, leveraging instant electronic transaction systems to facilitate seamless transactions. Point-of-sale (PoS) transactions recorded a significant increase, amounting to US$7.4 billion (N10.73 trillion) in 2023, reflecting a 27.85% growth from the previous year.
A report on the state of inclusive instant payment systems in Africa underscores Nigeria’s leadership in value flows through domestic instant payment systems relative to Gross National Income (GNI). Nigeria’s transaction value accounted for 186% of its GNI, surpassing other African nations.
While mobile money IPS supports the largest number of transactions in Africa, bank IPS experienced the highest year-over-year growth in volumes. The rapid growth of electronic transactions underscores the continent’s digital evolution, with transaction values expected to continue rising in the coming years.
The AfricaNenda report highlights the transformative impact of digital payments, emphasizing the need for enhanced data transparency to accurately capture the total value of transactions. As Africa embraces digitalization, Nigeria stands at the forefront, driving innovation and reshaping the continent’s economic landscape through digital finance.
