E-Financial
The Wirecard Scandal, Lesson for Africa’s Fintech and Regulators
By Emmanuel Okoegwale,
A Television documentary titled ‘Skandal! Bringing Down Wirecard’ caught my attention on Netflix during the weekend. Years back, I had met an executive of the firm when He attended, our annual payment conference in Lagos, Nigeria and was seeking partnership opportunities in Africa.
Much later, the news of their troubles sufficed but the circumstances surrounding it, was unclear till recent disclosures.
Wirecard which had a market capitalization of 24B euros at its peak in 2018, licked the dust in a significant way, judging from itself size and status in German, a country known for its very effective and efficient government machinery so what went wrong?
The story line looks like a well-established, formidable and innovative German payment processor with operations in some other parts of the world, was built on a scheme, set up to pull the wool over the eyes of their own government, regulators, investors and the public.
For some years, the media and the telescopic scrutiny of brutal short sellers (investor who profits when the valuation of a company goes down in value) latched on to wirecard’s trail with some painstaking investigation to establish some wrong doings but it appeared that the German financial watchdogs built a ‘ringfence’ around their iconic payment company, for years. With unrelenting attacks, Wirecard catapulted in June 2020.
The management disclosed that €1.9 billion was “missing” in its book which was previously reported as held with two Philippines Banks but the banks denied it. The shares of company tumbled down by over 72%. The damage from a short-seller’s barrel can be very brutal. JUMIA is still recovering from the damage from a lone wolf short seller’s attack on their NYSE IPO.
Though short sellers are unnecessary irritants to financial services regulators and how did the German financial markets watchdog BAFIN, allowed repeated reports from foreign jurisdiction with classified information, whistle blowers reports go untreated severally?
Some of the accusations
In financial services world, market operators can work with offshore partners and third-parties where there is license limitation, lack of operational base etc and earn a commission.
It’s not an illegal business activity in many jurisdictions but for some reasons, these offshore commissions were a major chuck of the revenue of wirecard and they are coming majorly from three partners, that looked alike in their business presentation, operations etc but in reality are extremely small business entities which raised the question of the legality of the volumes of cash coming from those sources and the resultant ‘padding’ of their books.
Some far-reaching proposals had been tabled to address and prevent future occurrences such as mandatory auditor’s report to the finance ministry in reporting irregularities, change of market operator’s auditors every ten years, intervention of the of the financial regulator based on suspicion of irregularities etc.
A regulator’s job is to create market certainty and appropriate risk but in the case of wirecard, the German financial watchdogs dropped the ball. Due to missteps of a single market operator, it will take a while for Germany watchdogs to build back the confidence that people have in their financial services market, judging from the possibility of future revelations that may be presented in court during the trail of the arrested top executives.
There is a national systemic risk and contagion effect if national regulators don’t step-up their role as gatekeepers for financial technology firms with local and offshore operations.
Emmanuel Okoegwale is a digital finance specialist based in Lagos – Nigeria Emmanuelok2007@gmail.com
Nigeria’s Value Added Tax (VAT) revenue surged to ₦6.72 trillion in 2024, marking an 84.6% increase from ₦3.64 trillion in 2023, according to the National Bureau of Statistics (NBS). This sharp rise reflects stronger economic activity and improved tax collection efforts across key sectors.
VAT revenue showed consistent growth throughout the year. In Q1 2024, collections stood at ₦1.43 trillion. This rose to ₦1.56 trillion in Q2, representing a 9.09% increase. Q3 recorded ₦1.78 trillion, up 14% from the previous quarter, while Q4 peaked at ₦1.95 trillion, a 9.5% rise from Q3.
In Q4 alone, VAT collections totaled ₦1.95 trillion, with domestic VAT payments contributing ₦917.40 billion, non-import foreign VAT at ₦554.68 billion, and import VAT at ₦474.75 billion. Domestic VAT remained the largest source, indicating strong local business activity and consumer spending.
Several sectors posted significant quarter-on-quarter growth in Q4. Extraterritorial organisations and bodies saw a dramatic rise of 180.05%, followed by agriculture, forestry and fishing at 70.83%, and human health and social work at 46.13%. These gains suggest increased operational scope, improved compliance, and possibly targeted government incentives.
However, not all sectors fared well. Households as employers and self-use production contracted by 28.97%, while the information and communication sector declined by 23%. The drop in ICT may reflect shifting market dynamics or regulatory headwinds affecting digital services.
Overall, the surge in VAT revenue signals a positive fiscal outlook for Nigeria, with implications for budgetary planning, infrastructure investment, and social services funding. It also highlights the importance of sector-specific monitoring to sustain momentum and address emerging challenges.
Federal Inland Revenue Service (FIRS) has commenced an electronic invoicing solution (e-invoicing) aimed at transforming digital tax administration and revolutionising tax payment in Nigeria.
The e-invoicing system, also known as the Merchant-Buyer Model, is designed to make tax compliance easier, faster and more transparent for all categories of taxpayers.
A statement by Dare Adekanmbi, special adviser on Media to Zacch Adedeji, chairman, FIRS, said the solution went live on August 1, following a successful pilot phase which began in November 2024.
According to the statement, large taxpayers, which are companies with annual turnover of N5 billion and above, are the first to be onboarded. In less than two weeks after the initiative went live, no fewer than 1,000 companies, representing 20 per cent of over 5,000 eligible firms, have embraced the solution and commenced integration with the FIRS MBS platform.
It noted that the remaining large taxpayers are expected to come onboard on or before November 1, the deadline for all firms in the category to complete their onboarding and integration processes.
“MTN Nigeria became the first taxpayer to transmit live electronic invoices to the FIRS, officially ushering in the e-invoicing regime. Huawei Nigeria and IHS Nigeria have also concluded test transmissions and are set to go live in the coming days.
“In collaboration with the National Information Technology Development Agency (NITDA), Service Providers have been incorporated into the ecosystem to act as both System Integrators and Access Point Providers. These providers will facilitate the onboarding, integration, and invoice transmission processes for taxpayers.”
The statement commended all large taxpayers, tax consultants, and service providers for their cooperation and commitment to the success of the project.
“We also acknowledge the genuine efforts of many taxpayers who strove to meet the 1st of August 2025 deadline but encountered operational constraints.
“In the spirit of encouraging voluntary compliance, the FIRS management has graciously approved a three-month extension of the deadline, with the new deadline now set for 1st November 2025.
“The FIRS e-Invoicing Implementation Team will continue to provide support through stakeholder engagements, including webinars, workshops, and town hall meetings, to ensure a seamless transition for all large taxpayers,” it added.
The national e-invoicing solution is an electronic fiscal system (EFS) developed by FIRS to provide real-time visibility into commercial transactions and ensure the authenticity, accuracy and completeness of invoices.
It is being implemented in phases, starting with large taxpayers, with medium and emerging groups to follow.
The initiative aligns with global best practices and supports the Federal Government’s broader objectives of enhancing revenue assurance, reducing tax evasion, and modernising tax administration.
It is also a critical tool in the implementation of the Nigeria Revenue Services Reform Act, which seeks to harmonise revenue reporting and establish a single source of truth for government revenues.
First Securities Brokers Limited, the stockbroking subsidiary of First Holdco Plc, recently announced its impressive performance in the latest Nigerian Exchange (NGX) Broker Performance Report. The firm secured first place in terms of trading volume and value of transactions for the month of July, 2025.
According to the report, First Securities Brokers Limited displayed strong trading activity and strategic market positioning, further solidifying its reputation as a significant player in the capital and equities market.
Fiona Ahimie, Chief Executive Officer and Managing Director of First Securities Brokers Limited expressed her pleasure at the firm’s achievement of a trading value of ₦414.457 billion, which accounts for 22.80% of the total trading value reported by the NGX during the review period. This performance highlights the effectiveness of the integrated model promoted by First Holdco Plc.
The Holding Company’s strategic focus on synergy within the Group played a crucial role in enhancing the performance of First Securities Brokers Limited.
“This remarkable achievement reflects the hard work and dedication of our entire workforce, as well as the trust our clients continue to place in us. It underscores our growing influence and effectiveness in the Nigerian equities market,” she added.
“Our focus on providing innovative and seamless trading solutions, coupled with deep market expertise, has been crucial to driving this success. We are not just a brokerage firm; we are strategic partners in our clients’ financial journeys. This recognition further motivates us to deliver exceptional value.”
“We remain committed to creating long-term value for our clients and stakeholders. Building on this momentum, we will continue to enhance our service offerings and further establish our position as a key driver of growth and development in the Nigerian financial market.”
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