Nigeria: Bank-Fintech Collaboration Crucial for Nigeria’s $1 Trillion GDP Goal by 2026, Say NDIC and Stakeholders

Collaboration between banks and fintech companies is essential for Nigeria to achieve its ambitious goal of a $1 trillion Gross Domestic Product (GDP) by 2026, according to insights from the Nigeria Deposit Insurance Corporation (NDIC) and key stakeholders. Speaking at the 2024 Finance Correspondents Association of Nigeria (FICAN) annual conference in Lagos, NDIC Managing Director/CEO Bello Hassan emphasized the critical role this partnership plays in driving growth within Nigeria’s real sector economy.

In his keynote address titled “Nigeria’s Journey Towards a $1 Trillion Economy: Impact of Banks’ Recapitalisation, Opportunities for Fintechs, and Real Sector Growth,” Hassan highlighted the Central Bank of Nigeria’s (CBN) recapitalisation initiative. He explained that recapitalising Nigerian banks is key to strengthening their resilience and solvency, enabling them to better withstand economic shocks and continue serving as vital financial intermediaries for national development.

Hassan noted that well-capitalised banks are instrumental in achieving the government’s $1 trillion economic vision, particularly by providing the accessible and affordable financing needed for real sector growth. He stressed that collaboration with fintech firms is crucial to unlocking the financing levels necessary to support industries such as agriculture, manufacturing, and small and medium enterprises (SMEs), which are vital to Nigeria’s economic transformation.

Hassan also called for financial regulators to adopt a holistic understanding of the financial ecosystem to implement policies that enhance the efficiency of the entire system. He pointed out that while traditional banks often focus on large corporations, fintech companies are positioned to fill the gaps by offering innovative solutions that simplify access to finance for underserved populations and SMEs, reducing bureaucratic barriers.

Nigeria, home to Africa’s largest fintech market, boasts numerous startups that address inefficiencies in the traditional banking sector. Hassan highlighted the pivotal role fintech can play in expanding financial inclusion, fostering innovation, and enhancing competition, all of which are crucial for achieving Nigeria’s $1 trillion GDP target.

In his welcome address, FICAN National Chairman Chima Nwokoji raised concerns about recent regulatory changes, including the exclusion of retained earnings from capital calculations, and fluctuating exchange rates. He cited Singapore’s banking sector as a model, noting how it contributed to the country’s rise as a global financial hub and economic powerhouse, suggesting that Nigeria can draw lessons from this experience as it seeks to strengthen its own financial ecosystem.

This dialogue between banks, fintechs, and regulators sets the stage for a stronger, more inclusive financial system that is key to Nigeria’s economic growth aspirations.