Nigeria's fintech sector, recognized as one of the fastest-growing in Africa, is increasingly reliant on foreign capital, which poses significant risks according to the Central Bank of Nigeria's 2025 Fintech Policy Insight Report. The report reveals that while startups in Nigeria secured $520 million in equity funding in 2024, this represented a decline from $747 million in 2019, a year when Nigeria accounted for roughly 37% of all African startup investment. This drop can be attributed to broader economic challenges, including rising interest rates in advanced economies, which have deterred venture capital flows.

Despite these downturns, the report emphasizes the resilience of Nigeria's fintech landscape, highlighting its status as a key hub for financial innovation even amidst global economic pressures. However, the Central Bank cautions that the sector's vulnerability to international market variations necessitates a shift towards bolstering domestic funding channels. This could involve tapping into Nigeria’s capital markets and fostering a stronger local investment environment to mitigate the risks associated with foreign reliance.

The findings serve to underscore the critical need for policy frameworks that support the development of local funding solutions, allowing the fintech sector to thrive independently of global financial trends. This approach could not only stabilize the sector amidst fluctuations but could also enhance Nigeria’s overall economic stability as it continues to establish itself as a leader in financial technology within Africa.