Economy
Payments, Trading and Crowdfunding are Boosting Nigeria’s Fledgeling Fintech Sector
While Nigeria’s financial technology sector is not exactly booming, it shows steady growth signs with promise for the short, medium, and long term. Over the last 12 months, Nigeria has witnessed the fintech sector emerge and take significant strides, especially when compared to data from 2020. For example, the value of all instant payments made in 2021 was more than N241 trillion, almost double that of 2020’s figures.
But it is not just payments where there is growth and potential. Overall, in 2021, nearly $1 billion was pumped into the Nigerian startup sector, which was a whopping 501% more than in the previous year. It now ranks second in Africa in terms of funding and investment for startups, equivalent to 41% of what reaches the entire continent. Not only this, but three different Nigerian startups all hit a valuation of $1 billion, becoming what is known as a “unicorn”.
Trading companies
In the first four months of 2022, the top 10 Nigerian stock broking firms traded some NGN 579 billion in stocks, over 63% of the country’s total. The country has a population of over 200 million people, with more and more coming online every year. Recent figures from Statista show that over half of the population is online, meaning many are gaining interest in trading and other forms of investment. According to data from various trading stakeholders, domestic trading transactions accounted for a significant amount (78%) of the market, demonstrating the interest of locals.
There is widespread interest in various sectors such as forex, stocks, and of course, CFD trading. The latter, short for contract for difference, is popular due to the fact there is no need to purchase the asset or security, instead, the trader simply estimates how much they think the value will rise or fall. Various sources put the number of active traders in the country at around 300,000, a number which has shot up over the last two years and is expected to grow at a steady pace.
Payment companies
Digital payment companies have done exceptionally well over the last year. Out of the new Nigerian unicorns, Flutterwave made significant waves along with Interswitch, Moove and Quickteller. Flutterwave managed to raise some $250 million in funding back in February, while Moove raised $105 million. These kinds of sums are significant for the country and set a promising precedent for the years to come.
Other signs of positivity include collaborations with big names such as Flutterwave with Paypal, Paystack with Apple Pay, and Carbon with Visa. There is also growth in alternative banking models that aim to serve the unbanked and provide better access to financial systems to those living in rural areas.
Credit and funding platforms
Due to challenges with the unbanked and a lack of access to conventional lending solutions, many Nigerians look to other solutions for financing their startups. These include crowdfunding which has taken off in a big way in the country. As it can be expensive to borrow from traditional financial institutions, crowdfunding apps and platforms have become very popular with entrepreneurs.
In the agricultural sector, agritech companies are particularly fond of using such methods to raise all-important capital. There are many big crowdfunding companies in the country, such as ThriveAgric, Farmcrowdy, and Porkmoney. By the end of this year, Statista predicts it will be worth $1.98 million with a CAGR of almost 6% over the next few years.
The Nigerian fintech sector has plenty of potentials and shows signs of sustainable growth in the medium and long term. This will lead to a more financially literate society and more opportunities for entrepreneurs, startups, and the community as a whole.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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