The Governor of Central Bank of Nigeria (CBN), Mr. Godwin I. Emefiele says the high level of confidence in the payment system introduced by the apex bank “between 2015 and 2020 has attracted the investment of about $500m in firms run by Nigerian founders.”

Emefiele who disclosed this in his keynote address delivered at the 31^st Seminar for Finance Correspondents & Business Editors, held at Maxbe Continental Hotel, Enugu and organized by Finance Correspondents Association of Nigeria (FICAN), with the theme, Trends In Nigerian Payments System: Regulating The Fintech Digital Playing Field, said CBN’s “robust payment system has continued to evolve towards meeting the needs of households and businesses in Nigeria.”

He said “In spite of these gains, about 36 percent of adult Nigerians still do not have access to financial services. Improving access to finance for individuals and businesses through digital channels can help to improve financial inclusion, lower the cost of transactions, and increase the flow of credit to businesses.

The Central Bank of Nigeria decided to introduce a central bank digital currency, the eNaira, which would help in attaining our goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses and firms as well as providing a reliable channel for remittances inflows into the country.

With the deployment of the eNaira, Nigerians in remote areas can conduct financial activities using their digital as well as features on phone devices. Partnering with our stakeholders in the financial industry, I believe that more Nigerians will be financially included.

I have been informed that seasoned professionals have been selected to present papers on the theme of the Seminar. I therefore invite all participants to learn from the wealth of knowledge they are bringing to bear. We expect that at the end of the sessions, participants would have acquired an in-depth understanding of the presentations and acquired a greater appreciation of the Bank’s commitment to economic growth and development.”

Emefiele said the CBN’s plan for the future of payments system in Nigeria “shall soon be the hub of payments in Africa.”

“In a couple of days from now, the Central Bank of Nigeria will beunveiling its Central Bank Digital Currency (CBDC), the eNaira, making Nigeria one of the first countries in Africa, and indeed the globe, to adopt the digitization of its national currency. However, to appreciate the latest technology, it is proper to cast our minds back to how we got to this point.

As you are aware, the payments system of any country plays a pivotal role in its economy, being the channel through which financial resources flow from one segment of the economy to the other. This represents the major foundation of the modern market economy.

In line with our mandate, as encapsulated in the Central Bank of Nigeria Act, 2007, the CBN regulates the Payments System, while banks, the Nigeria Inter-Bank Settlement System (NIBSS), the Nigerian Exchange Group, payment service providers and switching companies are the other major players in the system. The CBN, complemented by the Nigeria Deposit Insurance Corporation (NDIC) provides the necessary oversight function to ensure the efficiency and effectiveness of the payments system.

The year 2007 marked a turning point in the country’s payments system terrain with the launch of the CBN’s Payment Systems Vision 2020 (PSV 2020), which identified series of recommendations to increase the resilience of the payment system infrastructure and work-streams to encourage the usage of electronic payment methods. Since then, the country has continued to introduce initiatives that would help simplify payments and deepen financial inclusion.

Over the past 14 years, the Nigerian payment system has evolved significantly with extensive technological development backed by deliberate enabling regulation by the CBN. This has, no doubt, accelerated the development of novel financial products, services and channels all of which have placed Nigeria at the fore of the financial innovation race.

Due to the lockdowns associated with the management of the Corona Virus (COVID-19) pandemic, financial traffic to digital platforms increased significantly in 2020. Indeed, the spread of the virus at the time accelerated the speed of digitalization of many sectors of the economy. Expectedly, discussions have increased around the issue of the digital economy just as more opportunities have come up for financial institutions and other players within the payment ecosystem to innovate and provide more efficient options for payments and settlements.

As I noted indifferent fora before now, the post-COVID economy is predicted to be dominated by certain trends including a radically altered financial industry landscape as the accelerated shift towards digital financial services will attract more fintech investment and encourage competition to traditional financial institutions. This calls for an Increased and intensive regulatory scrutiny on the part of regulators to proactively monitor developments and ensure the continuous safety and soundness of the financial ecosystem. It is therefore imperative that Regulators must keep pace with these exponential developments and leverage new knowledge and technology tools such as Regtech and Suptech to enhance the efficiency and effectiveness of their mandate.

From all indication, digital revolution will be a focus for Financial Institutions in the months ahead therefore making Fintechs a major driver of the industry. Technology continues to change the face of the financial services industry. The advent of digital financial services, for example, has created faster, more efficient, and typically cheaper transactions compared to traditional financial services. As the global economy recovers from COVID-19, it is obvious that FinTech will play a more important role towards resilient and sustainable recovery.

Studies have already shown that only 1 percent of FinTechs have been critically affected by COVID-19 and 2 percent severely affected. By comparison, around 17 percent of other high-growth companies fall into these categories. It is therefore unsurprising that many FinTechs have experienced a surge in demand as working practices and customer banking habits changed. As a country with one of the largest millennial population in the world- (an estimated 62% of the Nigerian population  below 25 years of age), fast Smartphone growth driven by increasing affordability, Increasing mobile penetration and fast transition to 5G technology,   Nigeria remains primed to be an active playground for digital transformation and cannot afford to ignore the Fintech challenge

All of these validate the choice of theme for this seminar and I commend the management of Corporate Communications Department for the forethought it has demonstrated,” said Emefiele.