McKinsey: Nigerian Banks’ Revenue Pool to Hit $16bn by 2030 Amid Consolidation Push

• Market size of African banks now around $107 billion, says report 

•Fintechs tighten competition, scale rapidly, rival banks 

•Continent’s banks lead global profitability despite currency pressures

Emmanuel Addeh in Abuja

Nigeria’s banking industry is on course for a structural transformation that will see market size rise to $16 billion by 2030, driven by consolidation, digital expansion, and regulatory tightening, according to a new report by McKinsey & Company.

The projection comes amid sweeping reforms in the sector, including a significant increase in minimum capital requirements and a shift toward more sustainable revenue models, as authorities seek to strengthen financial system resilience in the face of macroeconomic volatility.

According to the report, Nigerian banks have remained among the most profitable in Africa, outperforming regional averages due to elevated interest rates, aggressive loan repricing, and substantial foreign exchange gains.

A major driver of recent earnings, it said, has been foreign exchange liberalisation, stressing that following reforms in 2023, the top five Nigerian banks recorded more than $1.7 billion in FX-related income, accounting for roughly 40 per cent of their total operating income.  However, it said regulators moved swiftly to rein in reliance on such gains.

Besides, McKinsey & Company explained that Nigeria’s growth outlook is also tied to structural shifts in revenue composition. While corporate banking accounted for the largest share of new revenue between 2019 and 2024, the retail and SME segments recorded faster growth rates, supported by expansion in digital payments and agency banking.

The report highlighted the rapid rise of financial technology firms as a key competitive pressure, with fintechs now ranked among leading merchant acquirers, and increasingly competing with traditional banks across payments, savings, and business services.

These firms, it said, are leveraging digital channels to scale quickly, targeting individuals, agents, and small businesses. In response, banks have increased spending on technology, with annual software and e-banking investments running into tens of billions of naira per institution.

“Despite currency volatility, Nigerian banks are highly profitable, surpassing the African average due to repriced loans, higher interest rates, and stronger foreign-exchange gains. Nigeria’s banking market is forecast to grow at a 7 per cent Compound Annual Growth Rate (CAGR), reaching about $16 billion by 2030.

“Between 2019 and 2024, corporate banking accounted for the largest share of new revenue growth in Nigeria’s banking sector; however, the retail and SME segments grew faster, leveraging digital payments and agency banking to capture previously untapped markets.

“While the Nigerian market is less concentrated than some, consolidation is increasing. Between 2019 and 2024, the top banks increased their domestic asset share from 59 per cent to 64 per cent,” it added.

The report argued that the Nigerian banking sector over the past five years has been affected by macroeconomic shocks, increased regulation, and the maturation of digital disruption.

A weaker local currency, it maintained, has driven a revenue drop in dollar terms, but noted that top banks are mitigating this by expanding into new markets, with, for example, Access Bank’s foreign operations now accounting for 23 per cent of the bank’s total operating income.

Additionally, McKinsey highlighted that the central bank has significantly raised capital requirements from $33 million (50 billion naira) to $330 million (500 billion naira) for international banks, and from $16 million (25 billion naira) to $130 million (200 billion naira) for national banks by March 2026 and halted capital distributions for banks under forbearance to strengthen balance sheets and build resilience in the sector.

“A key feature of the landscape has been the evolution of fintechs like OPay and Moniepoint into major players that now rival traditional banks. OPay has surpassed 50 million downloads on the Google Play store, while Moniepoint ranks among the leading merchant acquirers, rivaling traditional banks in user adoption.

“Both companies offer savings wallets, debit cards, and business tools, building attractive ecosystems where individuals, agents, and SMEs alike want to stay. Traditional banks are responding by investing heavily in IT and digital in response. Recent filings show tens of billions of naira per bank per year in software additions and IT/e-banking expenses,” the report pointed out.

To navigate this dynamic and shifting environment, McKinsey stressed that Nigerian banks are building reliability and scale, and embracing the digital reality to reach new consumers, notably young, digitally native Nigerians and micro-, small, and medium-size enterprises (MSMEs).

With Nigeria’s digital shift underpinned by strong demographic and connectivity trends, it stressed that the country has more than 160 million active internet subscriptions, while over 60 per cent of the population is under the age of 25, creating a large, digitally active customer base.

The introduction of the open banking framework, according to McKinsey, is expected to intensify competition further by enabling customers to share financial data across institutions, allowing new entrants to build integrated services on top of existing banking infrastructure.

Across Africa, the report stated that similar growth dynamics are evident, with the continent’s banking sector expanding at a compound annual growth rate of about 17 per cent between 2020 and 2024 in constant currency terms, compared with a global average of 7 per cent.

However, currency depreciation significantly reduced headline performance, it said, noting that in dollar terms, African banking revenues grew from $81 billion in 2020 to $99 billion in 2024, representing a CAGR of 5.2 per cent, in line with global averages.

Within the continent, the industry, it said, remains highly concentrated, with about 70 per cent of total revenue generated by five markets—South Africa, Nigeria, Egypt, Kenya, and Morocco. South Africa alone accounted for more than $26.4 billion in banking revenue in 2024 it added.

The report estimated Africa’s total banking market size at approximately $107 billion in 2025, highlighting both its scale and growth potential despite structural constraints,” the report explained.

“Strong fundamentals position African banking to sustain, and perhaps even increase, its profitable streak. With a total market size of around $107 billion in 2025, Africa’s banking market is sizeable yet highly concentrated,’’ the report said.

Looking ahead, it emphasised that growth in Nigeria is expected to be driven by increased financial inclusion, expansion of digital ecosystems, and deeper penetration of the SME segment.

However, it explained that risks remain from persistent inflation, exchange-rate volatility, and low per capita income levels, noting that Nigerian banks will need to balance growth with financial discipline, scale operations through consolidation, and invest in data and technology capabilities.

WTO Meeting in Cameroon Ends in Deadlock as Brazil Blocks US’ Bid to Extend E-commerce Moratorium

Ndubuisi Francis in Abuja

A meeting of the World Trade Organisation (WTO) in Yaounde, the Cameroonian capital, ended in a deadlock early Monday as members failed to reach a consensus on the core issues of reform, agriculture, and the renewal of a global ban on customs duties for e-commerce, after deep divisions blocked a deal.

The deadlock followed Brazil’s blocking of a bid by the United States and others to prolong a moratorium on duties for electronic transmissions, including digital downloads and streaming.

Among the setbacks, global trade ministers failed to extend the long-running moratorium under which WTO members refrained from applying levies on cross-border digital transmissions, a blow for developed countries and for Washington, in particular.

“We worked hard,” WTO Director-General, Ngozi Okonjo-Iweala told the conference.

Four days of intense negotiations in the Cameroonian capital had been scheduled to conclude around midday Sunday, but the closing ceremony was repeatedly delayed as countries scrambled to reach some kind of agreement.

Early Sunday, bleary-eyed negotiators had emerged from an all-night session with a draft text in hand, indicating a minimal deal on reform was in reach, according to diplomatic sources and experts.

That prospect evaporated when Brazil made a last-minute intervention, blocking a text on the e-commerce moratorium to protest the lack of progress in separate talks on agriculture, the sources told AFP on condition of anonymity.

The 166-member WTO has been trying for years to establish a programme of work for negotiations on agriculture, but the issue remains highly sensitive in many countries.

Going into Yaounde, countries had set the bar low, only hoping to issue a joint declaration aimed at laying the groundwork for future negotiations.

The main focus of the discussions in Yaounde, which took place against a backdrop of heightened trade tensions and global economic turmoil linked to the Middle East war, was on reform.

Ministers and delegates had been tasked with developing an action plan to revitalise a WTO weakened by geopolitical strains, stalled negotiations, and rising protectionism.

The organisation, which struggles to reach agreements because of the requirement for consensus, must undergo far-reaching reforms to emerge from a deep crisis that has raised questions over its central role in regulating international trade.

Any advance on reform was contingent on resolving the recurring question of the moratorium on customs duties for electronic transmissions – in place since 1998 and with its renewal discussed at every ministerial meeting since then.

Members, this time, failed to reach a deal, allowing it to lapse on Monday.

The United States had even been pushing for the moratorium to be made permanent, something many developing countries, India chief among them, had balked at over fear of losing tax revenues.

Washington had lowered its expectations over the course of the talks, with an agreement appearing to emerge on Sunday paving the way towards a five-year extension.

But Brazil did not want to go beyond two years, the country’s top diplomat said on X.

The expiration of the moratorium does not automatically trigger tariffs on digital trade, since WTO members can continue to individually choose not to impose customs duties on online goods and services ranging from e-books and music to telemedicine.

Expectations for progress had been low before the talks, but there were hopes the moratorium, which had been regularly renewed since 1998, would at least be extended.

Trade ⁠ministers could not agree to extend it for more than two years, which was not enough for the United States, diplomats said.

One said WTO’s future was being jeopardised.

US officials and business groups voiced frustration, and Britain’s Business and Trade Secretary, Peter Kyle, said the outcome was a “major setback for global trade”.

The talks tested WTO’s relevance after a year of huge trade turmoil and more recent disruptions in the Middle East.

Still, a subset of 66 members did agree to sidestep previous hurdles to usher in the world’s first baseline deal on digital trade rules among participants.

Reacting to the deadlock, Deputy Secretary General of the International Chamber of Commerce (ICC), Andrew Wilson, said, “It marks another crack in the foundations of the WTO system.”

Wilson urged delegates to renew the moratorium before states hit digital services with new charges.