July 01, 2013 / RTC
Nigeria is a large and growing country-2011 population of over 164million and population growth rate of 3.2%. Real GDP has grown at between 6-7% since 2007, with nominal and PPP GDP at $242bn and over $400bn respectively (CBN Annual Report, 2011). In 2012, real GDP growth rate was 6.5% and real and PPP GDP rose to $261.5bn and $450.5bn respectively (CBN, 2013). Foreign reserves are now in excess of $45bn and macroeconomic conditions are generally stable. However, social conditions are less than ideal-$/day poverty at 62.5%; life expectancy a mere 54 years; and unemployment close to 24%. Private consumption expenditure has however grown since 1999, though the growth rate is now declining.
Internet and Payments Sector
Only 7% of internet users worldwide are in Africa. 167.3million Africans have access to the internet compared with 254.9million Latin Americans, half a billion Europeans and over 1 billion Asians. Internet penetration in Africa is 15.6% versus a world average of 34.3%. However Nigeria is Africa’s top internet nation with 48.4 million internet users (Internet World Stats, 2012). The electronic payments sector in Nigeria is dominated by ATMs, which as at 2011 constituted 93% of all alternatives to cash. The telecommunications revolution from 2001 and banking consolidation of 2005-2006 have provided a strong foundation for growth of electronic payments.
“Cashless Lagos” Initiative
In a major push to encourage e-payments and other alternatives to cash, the CBN commenced a “Cashless Lagos” policy in Lagos State of Nigeria, as part of a wider shared services programme that seeks to achieve a 30% reduction in cost of banking services. Other objectives include increasing access, convenience and service levels across the industry; and integrating financial services into the economy.