Nigeria Emerges as Fintech Powerhouse in Africa

In the ever-evolving landscape of African fintech, Nigeria has asserted itself as a dominant force, boasting the largest concentration of fintech startups on the continent, according to a recent Disrupt Africa report titled “Finnovating for Africa.” This West African giant, with its vibrant ecosystem, now commands a substantial 32% of the market share, housing a robust 217 fintech startups. This statistic comes as no surprise, given Nigeria’s well-established reputation as a fertile ground for fintech innovation.

Renowned names such as Kuda, Flutterwave, Opay, PalmPay, and Moniepoint have sprung from the Nigerian fintech landscape, contributing to its prominence. South Africa, with 140 startups (20.6%), Kenya with 102 (15%), and Egypt with 65 (9.6%), follow closely behind, securing second, third, and fourth positions, respectively. Rounding up the top 10 are Ghana, Uganda, Zambia, Senegal, Cameroon, and Rwanda.

The triad of Nigeria, South Africa, and Kenya together commands a substantial 67.7% of the fintech market share. When Egypt, Ghana, and Uganda are added to the equation, this collective stake surges to an imposing 86.7%. This data underscores the concentration of fintech activity in these major markets.

While the big three—Nigeria, South Africa, and Kenya—have attracted the lion’s share of funding, they have also experienced the highest number of startup exits within a two-year span. To elaborate, South Africa witnessed exits from 31.3% of its 140 startups, Kenya saw exits from 21.7% of its 102 startups, and Nigeria recorded exits from 20.9% of its 217 startups.

The Disrupt Africa report further illuminates Nigeria’s meteoric fintech rise over the past two years. During this period, Nigeria outpaced South Africa to become the leading market for fintech startups. The country’s fintech landscape has experienced steady growth, with 74 startups in 2017, 101 in 2019, 144 two years ago, and a remarkable 217 as of 2023, marking a remarkable 50.1% growth rate since 2021.

While the African tech ecosystem encompasses various verticals, including cleantech, healthtech, and proptech, fintech has assumed a pivotal role in propelling its growth. The allure of the fintech sector lies in its mission to address the persistent challenge of financial inclusion. Defined by the African Development Bank (AFDB) as initiatives that make formal financial services “Available, Accessible and Affordable to all segments of the population,” financial inclusion remains a driving force behind fintech innovation.

This focus on financial inclusion has captured the attention of investors, making fintech a fertile ground for funding. Nigeria, despite economic challenges, has managed to attract a substantial volume of investment, with a staggering $1.5 billion raised across 257 funding rounds since 2015, the highest of any African country. Moreover, Nigeria’s fintech funding in the past two years alone reached $1 billion. Egypt-based fintechs also strengthened their position in the African market by securing nearly $900 million in the same period. Ghana exhibited notable growth, generating over $100 million, a significant leap from the $3.5 million its startups secured in 2021.

In conclusion, Nigeria’s ascent as a fintech powerhouse in Africa reflects its commitment to innovation and financial inclusion. The country’s fintech sector has not only attracted substantial funding but has also set a compelling precedent for the broader African fintech ecosystem, highlighting the sector’s immense potential and capacity for growth. This unfolding narrative is closely monitored by executives and senior finance experts, as Nigeria’s fintech story continues to captivate the global financial community.