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S&P Global Ratings has reported that despite a surge in mobile phone usage, Nigeria’s registered mobile money accounts are trailing behind those in countries like Ghana and Kenya. Although mobile phone adoption reached 93% (103 million) in 2023, the number of registered mobile money accounts per 1,000 Nigerian adults is lower compared to its African counterparts.
In a January 2024 report, S&P Global Ratings anticipates that financial technology (fintech) will play a pivotal role in closing the financial exclusion gap and enhancing literacy in Nigeria over the next five years. Approximately 50% of the population in Nigeria is formally banked, with an almost 40% financial exclusion rate.
The adoption of financial service agents has seen a remarkable rise, surging from 4.4% in 2018 to 54% in 2023. The number of registered mobile money accounts per 1,000 Nigerian adults increased by 18.1% in the year leading up to November 2023.
The International Monetary Fund (IMF) also reported an 18.1% increase in registered mobile money accounts per 1,000 Nigerian adults from 2021 to 2022. The number of mobile money agent outlets per thousand square kilometers grew from 680.9 to 1,618.6, with the value of mobile money transactions as a percentage of GDP climbing from 8.74% to 16.11%.
S&P noted a shift in financial access points, with traditional outlets like ATMs and bank branches gradually decreasing while non-traditional access points like retail and mobile money agents experience rapid growth. The report highlighted that Nigeria’s citizens are early adopters of cryptocurrency, signaling a preference for it as a payment and savings vehicle.
S&P acknowledged the transformative impact of digital banking in Nigeria, driven by the strategic shift toward digital channels, although challenges remain, such as the uneven broadband and smartphone access, with only half the population having broadband access and about a third owning a smartphone, despite high mobile penetration nearing 100% in 2023.
In conclusion, S&P’s credit analyst, Samira Mensah, emphasized the growth potential for Nigeria, citing its youthful demographics, entrepreneurial spirit, and evolving digital ecosystem, provided there’s improved technology infrastructure access for the population.
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