How Nigeria’s Mobile Money Success Offers Key Insights into Driving an Era of AI Prosperity

Ola Williams

By the close of 2023, the total GDP of countries using mobile money services was $720 billion higher than it would have been without the proliferation of those services. And at the heart of the world’s mobile money revolution lies Sub-Saharan Africa, leading the market’s growth with over 1.1 billion registered accounts. Without question, mobile services have become a formidable financial force in this region. 

Underpinning this economic metamorphosis was the introduction of the Internet. As connectivity swept across Africa, so mobile money services flourished, extending financial lifelines to millions of unbanked individuals and catapulting nations like Nigeria to the forefront of the global mobile money arena. It’s estimated that in 2023, more than a third of newly registered and active 30-day accounts originated from West Africa, with Nigeria one of the primary drivers of this growth. 

Throughout history, there have been general-purpose technologies (GPTs) that have sparked industrial revolutions and redefined entire economies, acting as catalysts for widespread innovation and growth. The Internet is one of those game-changing technologies, having transformed every sector it touched and setting the stage for unparalleled economic development.

In Nigeria, the financial services industry (FSI) has adeptly embraced GPTs like the Internet, with trailblazing enterprises like Flutterwave, Paga and OPay leveraging connectivity to revolutionise business models and unlock immense growth potential. 

Widely recognised as the next great GPT, AI is expected to define the fourth industrial revolution, creating ‘flywheel’ effects that will propel organisations into new realms of innovation and opportunity at an unprecedented pace. According to the World Trade Organisation, artificial intelligence could contribute $136 billion in productivity gains, cost savings, and increased revenues to countries in SSA by 2030. Nigeria is expected to benefit from 43 percent of this amount due to its proactive AI strategy.  

As the country once again finds itself at the brink of an opportunity to add billions to its GDP and export market-leading solutions – the question is what can we learn from the FSI sector’s incredible success with mobile internet to harness the next great wave of AI-driven innovation? 

Addressing critical gaps in the market

Many of Nigeria’s most famous mobile money exports began with a vision to transform access to financial services, making it possible for previously unbanked individuals to open bank accounts swiftly, transact effortlessly, and secure loans with ease. As a result, the percentage of Nigerians with access to banking services surged by nearly 16 percent between 2011 and 2021. Leading FSI companies also played a pivotal role in expanding access to credit, using innovative methods to offer loans with minimal documentation. By harnessing data on how customers engage with specific applications, they bridge the gap in a country where only two percent of adults currently have bank credit. This scenario paved the way for mobile money services to thrive, offering a convenient and accessible alternative for financial transactions.

In much the same way, the key to success with AI in Nigeria will lie in understanding and addressing the country’s unique challenges. It’s about recognising the complexities, prioritising areas where AI can make a real difference and working closely with stakeholders to create solutions that are not only technologically sound but also culturally relevant and beneficial to local communities.

Driving regulatory support

The Central Bank of Nigeria (CBN) has been instrumental in nurturing the growth of mobile money services in the nation. By introducing a comprehensive regulatory framework, the CBN set the stage for mobile money operators to thrive. This framework is not just a set of guidelines; it includes crucial provisions for Know Your Customer (KYC) and Customer Due Diligence (CDD) requirements, which ensure operators properly identify their customers and assess risks before offering their services. It’s a robust system that has significantly contributed to the seamless operation and widespread acceptance of mobile money in Nigeria.

Similarly, to harness the full potential of AI, Nigeria will need sound regulatory support to ensure strong reception and usage of the technology. This boils down to two key aspects: usefulness and trust. While technology must genuinely solve real-world problems and enhance people’s lives, it also needs to be trustworthy, backed by safeguards that protect societal and ethical values. Building and deepening trust should be at the forefront of how governments develop AI regulations and industry practices. Companies like ours, involved in the development and deployment of AI, also have a significant responsibility to continuously invest in robust AI governance practices, ensuring the technology is used safely, securely, and in a manner that the public deems trustworthy.

Investing in critical infrastructure

Now, we come to the backbone of the mobile money revolution: investments in infrastructure. Private-sector companies such as those in the telecommunications sector have been pivotal in laying this groundwork. Their strategic investments in infrastructure and connectivity have opened up mobile money services to even the most rural and underserved areas, boosting accessibility significantly. According to the GSMA, both mobile network operator (MNO)-led and non-MNO-led providers have been key drivers of mobile money growth in Nigeria.

The infrastructure needed to fuel AI innovation warrants even greater intensity of planning and investment. AI capabilities are doubling every six months, requiring constant investment to maintain cutting-edge infrastructure. It’s for this reason; we can expect to see ongoing strategic investments from organisations across both the public and private sectors to expand advanced infrastructure in strategic locations on the continent. Industry leaders will increasingly be required to combine forces to drive the scale of impact needed, partnering to develop entire digital ecosystems, built on investment in state-of-the-art datacentres.

Both startups and large corporations in Nigeria’s FSI industry are already tapping into the next wave of GPT innovation. WallX, for example, simplifies finance for SMEs by offering solutions for managing international transactions, establishing credit records, and securing loans through AI-driven credit evaluation. Access Holdings, on the other hand, has adopted Copilot for Microsoft 365 to address challenges in data management, meeting productivity, and app development, significantly reducing time spent on tasks. 

However, Jeffrey Ding, a professor at George Washington University, provides a key insight: the true driver of economic growth during an industrial revolution is not leading in GPT innovation but widespread adoption of these key technologies. To benefit most from a technology, a country must diffuse it across every sector of its economy. For Nigeria, embracing AI means ensuring its benefits are felt beyond leading pockets in the financial services industry and across all economic sectors. Focusing on the key success factors mentioned earlier will be crucial for achieving this widespread adoption and maximising AI’s benefits nationwide.

The feat of mobile money in Nigeria is a testament to the power of GPT adoption in transforming key sectors. By learning from the country’s greatest success story, we can harness AI to reinvent many more industries, exporting solutions and services and positioning Nigeria as a producer rather than just a consumer of technology. This shift will pave the way for the nation to become an economic powerhouse, driving market-leading growth across the economy and empowering local communities with cutting-edge advancements.

Ola Williams, Managing Director, Microsoft Nigeria and Ghana