Banks, Fintech Must Partner to Activate Nigeria’s $1trn Economic Target

Samuel Mobolaji

In a strategic call to action, financial industry leaders emphasized the importance of collaboration between banks and fintech companies as Nigeria strives towards achieving a $1 trillion Gross Domestic Product (GDP) by 2026.

This was the key message at the 2024 annual conference of the Finance Correspondents Association of Nigeria (FICAN), held over the weekend in Lagos, with the theme: Nigeria’s Journey Towards a $1 Trillion Economy: Impact of Banks’ Re-capitalisation, Opportunities for Fintechs, and Real Sector Growth.

Leading the charge, the Group Managing Director of United Bank for Africa (UBA) Plc, Mr Oliver Alawuba, underscored the collective responsibility of various stakeholders in attaining this ambitious economic target.

Represented by the Executive Director of Finance and Risk Management, UBA, Ugo Nwaghodoh, Alawuba, highlighted the significant role of Nigeria’s rapidly expanding fintech sector.

“Nigeria has the largest fintech market in Africa, with an ever-growing number of start-ups providing innovative solutions that address inefficiencies in the traditional banking system,” Alawuba noted.

He stressed that, as the country marches towards a $1 trillion economy, fintech would be crucial in expanding financial access, fostering innovation, and driving competition across the financial ecosystem.

“Fintech has already transformed how Nigerians access financial services, from mobile payments to lending platforms. This partnership with banks can stimulate real sector growth and bolster Nigeria’s economic transformation.”

The Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, echoed these sentiments, focusing on the need for a stronger, well-capitalized banking sector.

Hassan emphasized that the current recapitalization initiative led by the Central Bank of Nigeria (CBN) must be effectively implemented to enhance the resilience, solvency, and capacity of Nigerian banks.

This, he said, would enable them to absorb economic shocks and support national development.

Hassan was firm in his assertion that well-capitalized banks are essential for supporting President Bola Tinubu’s bold vision of growing Nigeria’s economy to $1 trillion.

“The opportunities and potentials for growth in the real sector rely heavily on affordable financing. Banks, in partnership with fintech, must harness these opportunities effectively,” he said.

He further pointed out the interconnectedness of financial service providers and the need for regulators and policymakers to understand how their actions influence the efficiency of the overall system.

Hassan, also highlighted how President Tinubu’s policy of foreign exchange rate unification could attract foreign direct investment, increase portfolio inflows, boost investor confidence, and improve Nigeria’s sovereign credit ratings.

The Chairman of FICAN, Mr Chima Nwokoji, in his welcome remarks, referenced global best practices, noting the example of Singapore, whose robust banking system had facilitated its rise as a financial hub.

Nwokoji emphasized that Nigeria could emulate such success by bolstering its financial infrastructure to fuel economic growth.

The conference closed with a strong consensus: the vision of a $1 trillion economy can only be achieved through strategic partnerships between banks and fintech innovators, with the real sector playing a central role in driving inclusive and sustainable growth.