E-Financial
The Role of E-Payment Systems in Doing Business in Nigeria
By Rotimi Adeniyi-Akintola
Countries the world over are witnessing the rapid evolution of payment systems. These changes follow the technological shift from traditional modes of payment such as cash, cheques and cards, to the digital frontier of virtual currency and mobile platforms.
According to Capgemini and BNP Paribas World Payments Report, global non-cash transactions broke a decade-long record for growth in 2014-2015, with growth volumes in excess of 11%; to reach more than 433 billion transactions.
Two regions fuelled this increase: emerging Asia with a growth rate of 43.4% and CEMEA (Central Europe, Middle East, and Africa), with 16.4% growth. Nowhere has the growth of e-payment been more evident than in Africa.
The swell of different means of electronic payments (e-payment) and mobile payments continues to have a direct impact on local economies in Africa.
Whilst Kenya remains the continent-leader in this regard, thanks to the emergence of the likes of M-Pesa. Nigeria has also witnessed a sizeable increase in the volume of e-payments in recent years.
However, without significantly increasing the rate of financial inclusion in the country through innovative methods, some of which are discussed below, Nigeria runs the risk of never fully actualizing the expansive potential of e-payments on her economy.
Electronic or “E”-payments have significant economic benefits for individuals and businesses alike. Electronic payment lowers costs for businesses, as the more payments they can process electronically, the less they spend on paper and postage.
The convenience of e-payments can also help businesses improve customer retention, in comparison with those offering only traditional means of payments. The direct impacts of e-payments on a country’s GDP are well known and documented.
In 2016, a report by Moody’s Analytics on “The Impact of Electronic Payments on Economic Growth” stated that the explosion of e-payments resulted in an added US$460 million to Nigeria’s GDP from 2011 to 2015.
According to Christine Lagarde, Managing Director of the International Monetary Fund (IMF), Nigeria could save as much as US$9 billion – N3.24 trillion by shifting government payments alone from cash to digital systems.
She was further quoted as saying that such a shift creates the potential to help reduce corruption, increase revenues, and generate investments in health and education.
What this means is that digital tools could be a decisive factor for Nigeria in meeting the 2030 Sustainable Development Goals.
If the expected effect of the shift of government payments alone to e-payment would result in such huge gains, the impact of a similar shift in the private sector would certainly drive economic growth to seismic proportions.
However, despite the adoption of digital payments, cash continues to be utilized as the mainstream mode of payment in Nigeria, especially for low-value transactions.
Cash remains hugely popular in Nigeria, due to the anonymity it affords, the lack of adequate modernised payment infrastructure, and challenges with access to banking systems for the majority of Nigerians (financial inclusion). Other systemic challenges include the poor state of basic infrastructure; particularly electricity/power and telecommunications infrastructure.
Low literacy levels, infrastructure vandalism, and security issues mount further pressures on the shift to more advanced payment systems. Nonetheless, efforts to surmount these obstacles abound, and the opportunity to develop secure and efficient e-payment instruments to drive further economic growth, exists for Nigeria.
What is financial inclusion, and why is it important?
Financial inclusion is one of the major challenges to the growth of e-payments in Nigeria. Despite the Central Bank of Nigeria’s (CBN) target of 80% financial inclusion by the year 2020, the nation continues to struggle to provide financial products and services to its adult population, particularly the low-income demographic.
Financial inclusion matters, as it is one of the most important drivers of economic development. The benefits of financial inclusion for the poor are extremely significant.
Money which sits outside the banking system; in drawers, mattresses and the like, is unable to appreciate in value by earning interest, and hence has a lower worth or net present value when used in the future.
Financial inclusion would provide low income individuals and families with the means to safely make day-to-day transactions, safeguard their meagre savings, manage cash flow spikes and build working capital.
This capital can finance small businesses or micro-enterprises, mitigate shocks and expenses related to unexpected events such as medical emergencies, and improve overall welfare.
According to a 2016 report by Enhancing Financial Innovation & Access (EFInA), a financial sector development organisation, 40.1 million Nigerian adults, representing 41.6% of the adult population are financially excluded – do not have access to bank accounts or financial services. This is a huge setback to the drive towards more advanced e-payment solutions.
Radical measures are required to effectively provide a population of over 170 million citizens with access to financial services.
To this end, the Nigerian government has introduced key regulatory initiatives to drive financial inclusion and electronic payments. In 2012, the cashless society project – to make Nigeria a top-20 economy by 2020 was introduced, as part of a larger Financial System Strategy 2020 vision to boost Nigeria’s financial system.
Further, in 2017, the CBN reintroduced charges for cash handling, starting with 1.5% for cash deposits and 2% for cash withdrawals between 500,000 to 1,000,000 naira. These measures have not been enough to catalyse Nigeria’s financial inclusion goals.
Boosting Financial Inclusion and E-payments
A major untapped resource for advancing financial inclusion would be to leverage existing telecommunications networks. Current mobile penetration stands at over 238,116,977active lines according to the Nigerian Communications Commission, with 21 million smartphones in circulation according to Jumia Mobile Report 2018. Compared to the 97.57 million bank accounts reported by the Nigeria Inter-Bank Settlement System (NIBSS) as being in existence in February 2017, it is evident that more Nigerians own mobile phones than those that operate bank accounts, even accounting for double or multiple mobile line registrations.
A report by KPMG Africa, estimated that only 30 million Nigerians have access to bank accounts.
There is therefore a clear incentive to harness mobile penetration as a means of driving e-payments and in turn driving economic growth.
The example of Kenya could provide some guidance here. Kenyans transacted a record US$33 billion on mobile money transactions in 2016, up from US$27.8 billion from the previous year, according to data from the Central Bank of Kenya.
In recognising this potential, and in an effort to bolster the use of mobile money, the CBN has repealed its decision to exclude telecommunications companies in Nigeria entirely from operating as purveyors of mobile money.
Approval was given to Globacom, Nigeria’s second national operator, to create 500,000 mobile money agent outlets in the country through the Glo Xchange, a mobile money agent network in partnership with 3 commercial banks.
Whilst this is a positive development, much more is required by the CBN in opening mobile payments to the telecommunications companies without restricting them to commercial banks. This will further harness their rich subscriber base.
The CBN is advised to identify opportunities to engage stakeholders and experts in dialogue, to identify avenues for collaboration on mobile payments, and mitigate potential problem areas.
The role of e-payments and financial inclusion in Nigeria’s economy will be further discussed at the “Technology as a Catalyst for the Ease of Doing Business” Conference 2018, due to hold on October 5, 2018, organised by Perchstone & Graeys and Knowledge Resources Limited, in conjunction with The Presidential Enabling Business Environment Council (PEBEC).
If interested, kindly send an email to [email protected] to express your interest in attending this conference.
The Senate yesterday recorded two major milestones in Nigeria’s financial sector, passing a landmark Insurance Regulatory Commission Bill to replace the nearly three-decade-old National Insurance Commission (NAICOM) Act of 1997.
Also in a separate development, the Committee on Banking Insurance and other Financial Institutions, overwhelmingly cleared former Director-General of the Securities and Exchange Commission (SEC) and current Deputy Governor of the Central Bank of Nigeria (CBN), Mr. Lamido Yuguda, for appointment as Chairman of the Board of the Asset Management Corporation of Nigeria (AMCON).
The insurance reform legislation, described by lawmakers as one of the most comprehensive overhauls of Nigeria’s insurance regulatory framework in decades, seeks to modernise regulation, strengthen consumer protection, enhance financial stability and align the nation’s insurance industry with global best practices.
The bill, passed during plenary presided over by the President of the Senate, Senator Godswill Akpabio, followed the adoption of the report of the Senate Committee on Banking, Insurance and Other Financial Institutions chaired by Senator Mukhail Adetokunbo Abiru (APC, Lagos East).
The legislation repeals the National Insurance Commission Act, 1997 and establishes a new Insurance Regulatory Commission with broader supervisory and enforcement powers designed to respond more effectively to the changing dynamics of the insurance industry.
Presenting the committee’s report, Abiru told senators that the existing legal framework had become grossly inadequate for regulating a rapidly evolving insurance sector.
He said: “The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business.”
According to him, although NAICOM had made significant contributions to regulating insurance companies, brokers and loss adjusters while protecting policyholders and enforcing industry standards, its enabling law had failed to keep pace with international developments.
Abiru explained: “Despite its significant contributions, the enabling law has become obsolete, failing to align with current realities and global best practices, and unable to keep pace with the evolving nature of the insurance industry, exposing numerous gaps in the law, necessitating urgent amendments.”
He disclosed that the proposed law guarantees the independence of the Insurance Regulatory Commission while substantially expanding its powers to supervise operators and safeguard the stability of the financial system.
According to him, the commission would have authority to issue regulations, standards, guidelines and directives, collaborate with domestic and international regulatory institutions, exchange supervisory information and intervene promptly in troubled insurance companies before their problems escalate.
He stressed that the strengthened intervention powers would remove bureaucratic bottlenecks that had previously delayed regulatory actions against distressed insurance firms.
Abiru said the legislation also introduces stricter corporate governance requirements by prescribing higher qualifications for members of the commission’s governing board.
He explained that only individuals with proven competence in insurance, finance, law, risk management and corporate governance would qualify for appointment, thereby ensuring more professional oversight of the industry.
The committee chairman further revealed that the bill significantly strengthens enforcement mechanisms by imposing stiffer sanctions on erring operators.
According to him, the law provides for heavier financial penalties, suspension of operating licences, additional liabilities for defaulting operators and disqualification of persons responsible for the collapse or regulatory failure of insurance institutions from occupying positions within the industry.
Abiru also noted that the legislation broadens the commission’s mandate beyond regulation to include the effective administration, supervision, control, integrity and overall development of insurance business in Nigeria.
He said the proposed change of name from the National Insurance Commission to the Insurance Regulatory Commission would eliminate longstanding confusion about the agency’s role and better reflect its statutory responsibility as the country’s insurance regulator.
Giving insight into the legislative process, Abiru disclosed that the committee subjected the bill to rigorous scrutiny, including a public hearing held on November 12, 2025.
He said more than 50 memoranda and several oral submissions were received from critical stakeholders, including the Federal Ministry of Finance, CBN, Nigeria Deposit Insurance Corporation, SEC, Federal Mortgage Bank of Nigeria, Nigerian Insurers Association, Nigerian Council of Registered Insurance Brokers and the Chartered Insurance Institute of Nigeria. Africans& Diaspora
According to him, the overwhelming consensus among stakeholders was that urgent reforms had become inevitable.
Abiru said: “The inputs made on the proposed bill will go a long way in providing a comprehensive legal framework for the regulation and supervision of all manner of insurance businesses in Nigeria to ensure that the industry is able to successfully compete on a global level and improve international competitiveness of Nigeria’s insurance industry.”
After considering the bill clause-by-clause in the Committee of the Whole, the Senate unanimously passed it for third reading.
Akpabio commended Abiru and members of the committee for championing what he described as a far-reaching reform capable of transforming Nigeria’s insurance industry.
He assured the committee that the National Assembly would continue to enact laws that would strengthen the country’s financial services sector, improve transparency and promote international competitiveness.
The bill will now proceed to the House of Representatives for concurrence before being transmitted to President Bola Tinubu for presidential assent.
After the plenary on Tuesday, the Senate Committee on Banking, Insurance and Other Financial Institutions overwhelmingly cleared Yuguda as Chairman of the Board of AMCON after granting him the rare privilege of a “take a bow and go” screening.
The committee dispensed with the conventional screening process on the grounds that Yuguda had previously appeared before the Senate for confirmation into several strategic public offices and had consistently demonstrated exceptional competence.
Presenting the nomination, the Special Adviser to the President on National Assembly Matters (Senate), Senator Basheer Lado, reminded lawmakers that Yuguda had undergone rigorous screening in the past.
He explained that the latest appearance was simply to comply with the provisions of Section 10(1)(a) of the AMCON Establishment Act, 2019, as amended. Abiru described Yuguda as one of the most trusted public officials appointed by President Tinubu.
He told committee members: “As all of us may recall, the appointee, Mr. Lamido Yuguda, whose résumé is before every member, has appeared before this committee on previous occasions.”
He added: “More recently, he also appeared before us for screening as Deputy Governor of the Central Bank of Nigeria.”
In a light-hearted remark that drew laughter from members, Abiru observed: “If you ask me, I think he is probably the luckiest person in this administration, having been appointed by the same president on three different occasions for three different responsibilities.
“I am sure you will agree with me that he is more than qualified for the role he is about to assume.”
Former Senate Chief Whip, Senator Orji Uzor Kalu, immediately moved the motion for Yuguda to “take a bow and go”.
Kalu said: “President Tinubu has, on three occasions, appointed the same man to important national assignments. I therefore move that Mr. Lamido Yuguda be allowed to take a bow and go.”
The motion was seconded by the committee’s Acting Vice-Chairman, Senator Mohammed Sani Musa, who described the nominee as eminently qualified.
Musa said: “Looking at the résumé of the nominee and considering that Mr. President has repeatedly found him worthy of appointment to critical national offices, there is no doubt that he is eminently qualified.” ExecutiveBranch
The committee unanimously adopted the motion through a voice vote, after which Abiru formally declared Yuguda cleared.
The committee, however, quickly shifted attention to AMCON’s future, with Musa calling for a comprehensive briefing on the corporation’s performance as it approaches its statutory wind-up date in 2030.
He reminded the management that AMCON was established to resolve non-performing loans, distressed banks and systemic financial risks, stressing that lawmakers needed a comprehensive assessment of its achievements and pending obligations.
Musa said: “It has a statutory lifespan and is expected to wind up around 2030. Looking at that timeline, there is a need for this committee to receive an up-to-date report on the status of AMCON.
“We need to know where the corporation stands today, what it has achieved since inception and what outstanding responsibilities remain before its expected sunset.”
Responding, Abiru assured the committee that the requested briefing would be provided.
He said: “I am sure the leadership of AMCON understands the point you have raised, and it is well noted.
“I have no doubt that, in the not-too-distant future, the committee will receive a comprehensive response on the issues you have highlighted.” The recommendation confirming Yuguda’s appointment is expected to be presented before the Senate in plenary for final approval.
E-Financial
CBN Retains Interest Rate at 26.5% as Cardoso Cites Global Uncertainty Despite Inflation Drop
Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR), the nation’s benchmark interest rate, at 26.5 per cent, citing heightened global uncertainties despite signs of resilience in the domestic economy.
The CBN Governor, Mr Olayemi Cardoso, announced the decision on Tuesday after the conclusion of the 306th meeting of the Monetary Policy Committee (MPC) held in Abuja from July 20 to July 21.
Cardoso said the committee resolved to maintain the current monetary policy stance after reviewing domestic and international economic developments.
“The Committee decided to retain the Monetary Policy Rate at 26.5 per cent,” he said.
The governor said renewed geopolitical tensions, particularly in the Middle East, continued to pose risks to global energy prices and inflation, necessitating a cautious approach.
He said the committee also retained the Standing Facilities Corridor at +50/-450 basis points around the MPR.
The Cash Reserve Ratio (CRR) was also left unchanged at 45 per cent for Deposit Money Banks, 16 per cent for merchant banks and 75 per cent for non-Treasury Single Account public sector deposits.
According to Cardoso, the MPC’s decision followed an assessment of the balance of risks confronting the economy.
“Although headline inflation moderated marginally in June 2026, global uncertainties have intensified, largely due to renewed hostilities in the Middle East,” he said.
He added that despite the challenging global environment, Nigeria’s economy had remained resilient, supported by ongoing structural reforms.
The governor noted that the committee would continue to monitor economic developments and adjust policy measures when necessary to maintain price stability.
The latest decision represents the second time in 2026 that the MPC has maintained the benchmark interest rate at 26.5 per cent.
The announcement came shortly after the National Bureau of Statistics (NBS) reported that Nigeria’s headline inflation rate eased slightly to 15.91 per cent in June 2026 from 15.93 per cent recorded in May.
National Insurance Commission (NAICOM) has declared that it has no plans to extend the 31 July 2026, deadline for the ongoing insurance industry recapitalisation exercise, asserting that the date is firmly rooted in the new Insurance Act.
Speaking at the investiture of Mr Akinjide Oluwarotimi-Orimolade as the 53rd president of the Chartered Insurance Institute of Nigeria (CIIN) in Lagos, Olusegun Omosehin, commissioner for Insurance, emphasised that the exercise remained central to building a resilient market.
With less than two weeks left before the window closes, the regulator commended operators making steady progress but stressed that the timeline must be treated with absolute urgency.
Omosehin said, “A stronger capital base must translate into stronger service delivery, prompt claims settlement, improved consumer protection, and a market that Nigerians can trust.
“The industry’s future will be determined by the quality of leadership, depth of competence, and discipline in serving the public interest.”
The ongoing exercise follows the historic signing of the Nigeria Insurance Industry Reform Act by President Bola Tinubu, which effectively repealed the outdated 2003 Insurance Act. Under the new framework, the sector is transitioning from a static baseline model to a dynamic risk-based capital structure. This regulatory shift aims to fortify operators against systemic economic shocks and better position the industry to contribute significantly to the Federal Government’s target of a $1tn economy.
Consequently, the exercise requires a massive capital lift across the board, pushing life underwriters from N2bn to N10bn, non-life operators from N3bn to N15bn, and reinsurers from N10bn to N35bn.
The push comes amid strong legislative alignment, with the National Assembly pledging its full backing to ensure these reforms translate into deeper market penetration.
Also speaking at the event, Ahmadu Jaha, chairman of the House of Representatives Committee on Insurance and Actuarial Matters, reaffirmed the parliament’s dedication to providing the necessary legal frameworks to drive sector growth.
Jaha said, “As Chairman of the House Committee on Insurance and Actuarial Matters, I wish to reaffirm the unwavering commitment of the House of Representatives to supporting legislative initiatives that will strengthen the insurance industry, improve regulatory effectiveness, enhance consumer protection and promote wider insurance penetration across Nigeria.
“The National Assembly recognises the critical role of the insurance industry in mobilising long-term capital, financing infrastructure development, protecting businesses and households against unforeseen risks, promoting financial stability and driving sustainable economic growth.”
Responding to the charge, the newly inaugurated Orimolade, president, CIIN, stated that his administration would aggressively protect the public interest by advancing the core mandates of the institute.
Orimolade promised “to build on the programmes of my predecessors while evolving new ideas that can further increase insurance education, awareness and acceptance across the country.”
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