The Central Bank of Nigeria’s new data localisation directive marks a significant milestone in the country’s digital transformation journey. By requiring payment transaction data generated in Nigeria to be stored and processed within the country from January 2027, the policy aims to strengthen regulatory oversight, improve financial system resilience and reinforce Nigeria’s digital sovereignty. For financial institutions, it signals a new phase in the evolution of the country’s digital payments ecosystem. While many banks have already invested in local data infrastructure, the directive presents a different reality for fintechs and payment service providers that rely heavily on global cloud platforms. Drawing on lessons from jurisdictions such as India, Indonesia, Brazil and the European Union, the article examines how different approaches to data localisation have balanced regulation, innovation and economic growth, offering valuable insights for Nigeria’s implementation journey. Beyond the regulatory requirements, the policy presents an opportunity to strengthen Nigeria’s digital infrastructure, attract investment and position the country as a leading fintech hub in Africa. This Policy Insight outlines the practical considerations for financial institutions as they prepare for implementation and highlights the collaborative efforts needed to ensure the transition supports both innovation and long-term competitiveness. Click HERE to read more.
Category: Policy Insight
Nigeria’s FATF Exit: The Road to Financial Excellence
The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 by the G7 to set global standards against money laundering, terrorist financing, and related threats to financial integrity. Its core mandate is to ensure that countries implement robust Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) frameworks and comply through regular evaluations and public listings. For Nigeria—a major African economy with an active banking, insurance, fintech, and capital markets ecosystem—meeting FATF standards is vital for financial credibility, investment attraction, and regional leadership. The sector’s large transaction volumes, complex corporate structures, and cross-border activity make it particularly vulnerable to financial crime. Weak AML/CFT controls can quickly erode investor trust and undermine competitiveness. Nigeria undertook extensive reforms to address these gaps. It completed a national risk assessment of money laundering and terrorist financing, updated its AML/CFT strategy, and strengthened international cooperation. Supervision of financial institutions and designated non-financial businesses and professions (DNFBPs), and authorities gained quicker access to accurate beneficial ownership information. The Nigerian Financial Intelligence Unit (NFIU) increased dissemination of financial intelligence, which supported effective investigations and prosecutions. The government also enforced currency declaration rules, enhanced asset-recovery processes, and intensified terrorism-financing investigations while safeguarding legitimate activity. As a result, on October 24, 2025, FATF removed Nigeria from the grey list—a major boost to the country’s financial reputation. Delisting signals that Nigeria has addressed critical deficiencies in its AML/CFT framework and has strengthened the integrity of its financial system. For Nigeria, the benefits go beyond financial gains. Delisting affirms measurable progress in strengthening AML/CFT systems and reinforces the credibility of regulatory institutions such as the NFIU and the Central Bank. It also provides political support and public confidence to continue the reforms needed to safeguard the financial system. For Nigeria, maintaining this achievement will require deliberate and consistent action across key areas. Click HERE to read more.
From Competition to Collaboration: The Promise of Open Banking in Nigeria
Open Banking in Nigeria is set to reshape the financial sector by allowing customers to securely share data with third-party providers through standardized APIs. This customer-centric model fosters innovation, competition, and financial inclusion. Globally, open banking has delivered remarkable benefits: UK: Millions of consumers and businesses use secure data-sharing for tailored services and direct account-to-account payments. India: Account Aggregator framework expanded credit access for individuals and small businesses without traditional histories. Brazil & South Korea: Structured rollouts and reduced fees accelerated adoption and innovation. Nigeria’s Bold Steps The Operational Guidelines for Open Banking (2023) and the planned Open Banking Registry (OBR) mark a significant move toward implementation. Once fully launched, banks will share customer-approved data through standardized APIs, enabling: Personalized loans Integrated payments Better financial apps But success depends on more than technology. Building trust, ensuring strong consumer protection, and adopting phased rollout strategies are critical. Why It Matters Nigeria has the opportunity to create a secure, inclusive, and competitive financial ecosystem, empowering consumers, driving fintech growth, and positioning the country as a leader in Africa’s financial future. Want to explore the full policy insight and learn how Nigeria can unlock the promise of open banking? 👉 Click Read More About the Policy Insight
The Future of Work in Nigeria: Building a Talent Powerhouse for Africa and the World
The “Future of Work” is transforming economies worldwide. Advances in technology, demographic shifts, and evolving social expectations are redefining how people work, the skills they need, and how organisations operate. Generative AI is revolutionising sectors like customer service, financial services, logistics, and data analytics, boosting productivity while creating new challenges. Nigeria at a Critical Juncture With 232.7 million people and a predominantly young population, Nigeria stands at a crossroads. Rapid digital expansion, vibrant tech hubs, and entrepreneurial dynamism offer unique advantages. Yet, challenges such as weak infrastructure, skills gaps, and limited adoption of remote work persist. Key Drivers of Change Digital Transformation: Lagos and Abuja are emerging as tech hubs, home to innovators like Flutterwave, Paystack, and Andela. Skills Development: Initiatives like the 3 Million Technical Talent (3MTT) programme and reforms in technical education aim to close the skills gap. Industry Leadership: EnterpriseNGR’s Youth of Enterprise (YOE) Internship Programme is equipping young Nigerians with high-demand skills such as AI and data analysis. The Big Question Can Nigeria convert these opportunities into strengths and become Africa’s leading hub of talent? The answer lies in policy alignment, education reform, and investment in digital infrastructure. Discover actionable strategies for government, businesses, academia, and individuals to shape a future-ready workforce. 👉 Click to Read More
The Shield and the Buffer: Redefining Insurance as Nigeria’s Financial Shock Absorber
There’s an old myth that if a nuclear Armageddon were to wipe out life on Earth, cockroaches would be among the few survivors — crawling out of the wreckage to begin life anew. In the financial ecosystem, the insurance sector is expected to play a similar role: unglamorous, often overlooked, but ultimately resilient — the last institution standing when all else collapses. Yet in Nigeria, the sector hasn’t always lived up to this metaphor. A Fragile Past Between 2009 and 2011, during the aftershocks of the global financial crisis, Nigeria’s insurance industry faltered badly. Insurers, instead of offering stability to businesses and households, found themselves teetering on the edge. Bloated portfolios filled with illiquid, devalued assets became a source of internal tension. Liquidity was scarce, claim payments stalled, and basic obligations were unmet. Widespread retrenchments followed, with many employees going months without pay. In that period, insurers — far from being financial first responders — were among the first casualties. Their inability to absorb shocks left the broader economy even more exposed. A New Dawn: The Nigeria Insurance Industry Reform Act (NIIRA) Fast forward to 2025, and the enactment of the Nigeria Insurance Industry Reform Act (NIIRA) signals a long-overdue reckoning — and an opportunity to rebuild the sector as the economic stabiliser it’s meant to be. Key reforms under NIIRA include: Strengthened Capital Requirements: The Act raises the bar for market participation — ₦15 billion for non-life, ₦10 billion for life, and ₦35 billion for reinsurers — while embracing risk-based supervision to ensure only solvent players remain. Policyholder Protection Fund: In a groundbreaking move, Nigeria has established a guarantee fund to protect policyholders if an insurer fails — similar to how the NDIC protects bank depositors. Cash Reserve Requirements: Insurers must now deposit 10% of their minimum capital base with the Central Bank, invested only in secure, liquid instruments. This serves as a prudential buffer, boosting liquidity and claims-paying capacity. Stricter Investment and Governance Standards: NIIRA curtails reckless speculation by imposing tighter investment rules and enhancing NAICOM’s oversight authority. Governance standards have also been raised. These measures, coupled with compulsory insurance for strategic assets, localisation of cover for imports, and digitalisation of regulatory processes, are reshaping the industry’s foundations. More Than a Sector — A Multiplier Why does this matter to the broader economy? Because a functioning insurance sector unlocks confidence. It gives businesses the courage to take risks, supports infrastructure development, and cushions shocks from disaster, illness, or economic disruption. Its long-term capital stabilises financial markets. Its silent strength allows families, farmers, and firms to sleep easier. When insurance falters, entire sectors unravel — as Nigeria saw in 2009. But when it functions, it becomes the platform from which economies rebuild. The Road Ahead The challenge now lies not in legislation, but in execution. Will insurers rise to the new standards? Will regulators enforce them without fear or favour? Will the public regain trust in a sector that once failed it? If the answer is yes, then the next crisis may find Nigeria’s insurance sector not gasping for breath, but crawling from the rubble — resilient, ready, and essential. Just like the cockroach.
Nigeria’s Insurance Reset: Strategic Implications of the 2025 Reform Act
The 2025 Nigeria Insurance Industry Reform Act marks a bold and transformative step towards modernising the country’s insurance landscape. With its sweeping overhaul of outdated laws and introduction of a unified regulatory framework, the Act is a strategic reset designed to build a more resilient, transparent, and inclusive insurance sector. Core of the Nigerian Insurance Industry Reform At its core, the Insurance Industry Reform Act aims to ensure that only competent and financially sound operators are licensed, while empowering the National Insurance Commission (NAICOM) to adopt a risk-based approach to supervision. This shift is critical for aligning Nigeria’s insurance regime with global standards and for restoring public confidence in the industry. Among the most significant changes are the increased capital requirements for insurers, the introduction of risk-based capital models, and the mandatory separation of life and non-life insurance businesses. These reforms are expected to strengthen the financial health of insurers, improve claims responsiveness, and attract both local and foreign investment. Consumer Protection Under the Nigeria Insurance Industry Reform 2025 The Insurance Industry Reform Act also introduces two key protection mechanisms: the Insurance Policyholders Protection Fund, which safeguards consumers in the event of insurer insolvency, and the Road Safety and Accident Victims Compensation Fund, which provides support for victims of road accidents involving uninsured or unidentified vehicles. These initiatives reflect a strong consumer protection ethos and a commitment to social impact. Furthermore, the localisation of insurance for imported goods, stricter aviation insurance rules, and the compulsory inclusion of ECOWAS Brown Card coverage in motor policies all signal a more robust and globally integrated insurance framework. While the insurance industry reform presents opportunities for growth and innovation, it also brings transitional challenges—particularly for smaller insurers. Effective implementation, stakeholder engagement, and capacity-building will be essential to ensure a smooth transition and to unlock the full potential of the reform. The Nigeria Insurance Industry Reform 2025 sets the foundation for a more resilient, transparent, and globally aligned Nigeria insurance sector Click here to read the full Policy Insight and explore the strategic implications of the 2025 Reform Act in greater detail.
Boosting Economic Growth through Bank Recapitalisation: A Path to National Prosperity
Nigeria is at a pivotal moment in its economic journey. With the Central Bank of Nigeria (CBN) enforcing new minimum capital requirements for banks by March 2026, the financial sector is being reshaped to better support national growth. This policy aims to strengthen banks’ resilience, boost lending capacity, and align with Nigeria’s ambition to become a US$1 trillion economy by 2030. Before the CBN introduced the new capital requirements in March 2024, many Nigerian banks were operating with a low capital requirement—a minimum capital base of ₦25 billion, about US$16.5 million at today’s value. The new thresholds—₦500 billion for international banks, ₦200 billion for national banks, and ₦50 billion for regional banks—are driving a wave of recapitalisation, positioning the sector to finance large-scale projects and absorb economic shocks. This is a strategic opportunity to transform Nigeria’s financial system into a driver of inclusive and sustainable development. 👉 Click HERE to read more
Nigeria’s New Tax Law: Potential Positive Economic Impacts
The Nigeria’s new Tax Law represents a transformative legislative initiative that consolidates all taxes previously governed by various laws into a unified framework. Its potential positive economic impacts include: 1. Increased Job Creation: With lower tax rates and a more business-friendly environment, companies will have more resources to scale and hire additional staff. This will contribute to reducing unemployment. 2. Attraction of Foreign Direct Investment (FDI): The simplification of tax processes and the reduction of corporate tax rates make Nigeria more attractive to foreign investors. The clearer and more predictable tax environment reduces the risk for investors, encouraging long-term investments. 3. Enhanced Economic Diversification: By making tax regulations more business-friendly and reducing burdens on entrepreneurs, the reform can stimulate the growth of diverse sectors, such as technology, manufacturing, and services. This can help reduce Nigeria’s dependency on oil and contribute to a more diversified economy. 4. Improved Compliance and Reduced Informality: By making the tax system less complex and more transparent, the reform could encourage businesses in the informal sector to formalize their operations. This would not only increase the number of registered taxpayers but also create a level playing field, benefiting both businesses and the government. 5. Better Utilization of Development Levies: The shift of funds towards a specific developmental goal, education, ensures that the collected taxes are directed towards critical areas that can foster long-term economic growth. This strategic allocation supports human capital development which is essential for sustainable growth. 6. Enhanced Revenue Collection: With the efficient tax administration and collection systems, including the introduction of a single tax authority responsible for all tax collections, the proposed reform will increase Nigeria’s tax-to-GDP ratio, which currently lags other emerging economies. This additional revenue can support public services, infrastructure development, and social programs. 7. Increased Transparency: The adoption of technology and centralized systems will reduce opportunities for fraud and corruption. 8. Empowered Taxpayers: The provisions for refunds and dispute resolution will help promote fairness and accountability, encouraging voluntary compliance.
The Nigeria Tax Bill 2024: An Intricate Interrogation
The NTB represents a significant overhaul of the country’s tax framework, introducing key reforms aimed at enhancing compliance, expanding the tax base, and stimulating economic growth. The NTB incorporates a comprehensive taxpayer identification system, a progressive personal income tax regime, digital transformation in tax administration, and adjustments to corporate and value-added taxation. Notably, it mandates the use of Taxpayer Identification Numbers (Tax IDs) for all taxable entities, integrates an Electronic Fiscal System (EFS) for real-time transaction reporting, and introduces progressive tax structures that increase the tax exemption threshold and lower mid-tier rates, leaving more income in the hands of taxpayers, which could boost consumer spending and economic growth. In addition, The NTB introduces a gradual increase in VAT rates, revises the VAT revenue-sharing formula, and consolidates existing business tax deductions into a streamlined Development Levy to support human capital development initiatives like the Student Education Loan Fund. These reforms aim to create a more efficient, transparent, and equitable tax system, ensuring that taxation supports both fiscal sustainability and economic inclusivity. Click here to learn more
Solving Nigeria’s Youth Unemployment Crisis from Three Different Lenses
The International Labour Organisation (ILO) projects the global unemployment rate to rise slightly from 5.1% in 2023 to 5.2% by the end of 2024, amounting to an additional 2 million unemployed people and pushing aggregate unemployment to 190.8 million. Young people fare badly, with the unemployment rate up to four times that of adults (3.9% versus 13.3%); as of 2022, one in four youths is neither in employment, education, nor training (NEET). High inflation and other macroeconomic imbalances will further compound the growing unemployment. This is particularly the case for Nigeria, where the unemployment level is high, and poverty is projected to affect 38.8% of the population by 2024 according to PwC; Although data from the National Bureau of Statistics showed a decline in the unemployment rate at 4.3% in Q2 2024 compared to 5.3% in Q1 2024, youth unemployment, for persons with upper secondary education, remained higher than the national average at 8.5%. Nigeria has many youths who lack employability skills, and the available jobs are way below the working-age population. Unfortunately, the economy grows slower-than-required and fails to keep the unemployment rates in check. The unemployment challenge is drifting more youth to the informal sector. About 77% of the world’s young adults are engaged in the informal sector. The statistic is higher in Africa and West Africa, where 94.9% and 97.9%, respectively, are currently employed in the informal economy. The informal economy refers to economic activities and enterprises that operate outside formal regulatory, legal, and taxation frameworks. These activities are typically unregistered, unregulated, and untaxed, often providing income and employment opportunities, especially in developing countries. Examples of the informal economy include street vending, small-scale farming, domestic work, informal transportation services like motorbike taxis, unregistered construction work, tailoring, and freelance repair services. While the informal economy often serves as a safety net for those excluded from formal employment, it can also lack social protections, stability, and benefits like healthcare or retirement plans. The challenges become obvious with a critical mass of young people on the continent employed in the informal sector. Skill mismatch is one causative factor responsible for the current trend in unemployment. Young graduates find it difficult to match their educational qualifications with the jobs available. The unreformed educational system that fails to keep up with workplace skill requirements is a major hindrance to youth employment. Given that about 63 percent of Nigerians are multi-dimensionally poor, deprived in three areas: money, education, and basic infrastructure, only a few can afford quality education outside of the current system. The economic environment has been challenging with high inflation, interest and exchange rates. The business sector finds it challenging to create enough jobs to absorb the current labour force. In addition, geographical labour mobility is fueling a high urban population density, putting pressure on existing public utilities, including education and training facilities. It is however important to note that advancements in technology are creating more jobs. This is made possible by the gig economy, which is enabled through democratisation of technology skill training and preference for flexible work schedules. Unfortunately, skill requirements for jobs change with advancements in technology. This is particularly so in “industries with rapidly evolving new technologies or practices.” The future of work is now quite unpredictable. This can be challenging for young people who may not have access to quality education and training programmes. All this suggests a rocky start for youth and young graduates. The implication of youth unemployment is significant for both youths and the economy. Unemployed youth earn little or no income and cannot save. Low savings implies low investments and low investment suggests low national income through the multiplier effect, and eventually negatively impacts businesses and slows down economic activities. Other significant negative implications are increasing income inequality, political instability, and social unrest. Unemployment has been recognized as a risk factor that stimulates 40% of people that join rebel movements and 46% of those that participate in gangs. Between 2023 and 2024, the Tinubu administration has launched youth employment initiatives, focusing on empowering young people and enhancing job creation. Notable among these is the 3 Million Technical Talent (3MTT) programme that aims to equip 3 million Nigerians with technical skills to enhance youth employability and job creation by 2025. Till date, the programme has trained 60,000 youths. Also, the government works closely with the United Nations Development Programme (UNDP) to implement The Nigerian Jubilee fellowship, a youth internship programme designed to provide 20,000 young Nigerians with valuable work experience and career development opportunities in public and private organisations. Collectively, these efforts focus on skill development, entrepreneurship, and job creation, aiming to reduce youth unemployment across Nigeria. What can Nigeria’s public and private sectors do to accelerate current efforts, reduce the unemployment crisis and help youth secure a future? In this Policy Insights we look at solving this challenge from three unique lenses: Help youth secure their first job through internships: Employability skills or soft skills are becoming more relevant today due to the increased automation of jobs. In addition to technical skills, graduates must be able to communicate, work in teams, and be innovative to support improved processes and productivity. Employers also benefit! The availability of trained graduates suggests quality, skilled workers for employers. In Singapore, the government partnered with employers to offer traineeships to recent and potential graduates in the final stage of their education. While employers recruit graduates for up to 12 months, the government funded 80% of the internship allowance. This sustained collaborative effort contributed to the low youth unemployment rate. The decrease in youth unemployment in the UK, among other factors, has been, in part, attributed to increased investment by employers in apprenticeships and internships that offer young people the opportunity to develop workplace skills and valuable experience in their career path. The Nigerian government can intensify current efforts, adopt Singapore’s model by funding or subsidizing internship in both the public and private sectors. Also, industry bodies and associations should collaborate with companies in their respective industries… Continue reading Solving Nigeria’s Youth Unemployment Crisis from Three Different Lenses