NIGERIA AND THE INVISIBLE RAILS

Nigeria’s ₦3.4 quadrillion economy runs on telecom networks, argues JOHN EMENIKE

In 2025, electronic payment transactions in Nigeria reached ₦3.458 quadrillion, according to the Central Bank of Nigeria’s Annual Report, more than triple the ₦1.078 quadrillion recorded just a year earlier. Transaction volume rose to 47.9 billion from 11.3 billion. By the first half of 2026, Point-of-Sale terminals alone had processed ₦ 41.74 trillion, a 62.5 per cent increase over the same period in 2025, across a network of 8.36 million registered POS devices, of which 5.9 million were actively deployed.

AfricaNenda’s 2025 State of Inclusive Instant Payment Systems report rated Nigeria’s NIBSS Instant Payment platform as the first African instant payment system to achieve “mature” status on its Inclusivity Spectrum, with 57.7 million unique users, representing 52 per cent of the adult population. The practical question that maturity raises is: what physical infrastructure carries that volume, and who built it?

The answer, for anyone who pauses to trace the chain, is telecoms. Every POS terminal, every bank transfer initiated via a mobile app, every USSD session dialled on a feature phone, and every merchant payment confirmed via a fintech platform requires, at some point in its execution, a working mobile network connection. The terminals connect to their payment processors almost exclusively via mobile SIMs.

When a rider-hailing driver in Surulere accepts a digital fare, when a pharmacist in Aba confirms a transfer, when a fruit seller at Damaturu checks her POS balance at the end of the day, each of those moments depends on a signal travelling from a base station to a switch and back again.

Ebenezer Onyeagwu, former Group Managing Director of Zenith Bank, captured the relationship plainly when he observed that introducing USSD changed everything for banking. “Without telecoms infrastructure,” he said, “there is no USSD code.” His observation, made before the current wave of app-based banking gathered pace, is truer now than when he made it. USSD’s share of total payment value has declined to 0.14 per cent as smartphone users migrate to banking apps, and GTCO’s *737# platform saw volumes fall from ₦987 billion in the first half of 2024 to ₦499 billion a year later.

But the migration from USSD to apps deepens the economy’s dependence on telecoms infrastructure rather than reducing it. A USSD session uses the signalling layer of the mobile network, while a banking app uses the data layer, consuming more bandwidth, more consistently, across more hours of the day. The dependency has only thickened.

The infrastructure sustaining that dependency is the product of sustained capital deployment across the sector. According to the Nigerian Communications Commission, mobile network operators invested more than ₦2.13 trillion in capital expenditure on network infrastructure and upgrades in 2025, while tower companies committed an additional ₦373.8 billion, bringing the sector’s total investment to approximately ₦2.5 trillion for the year.

Within that total, MTN Nigeria’s ₦1 trillion full-year spend, more than double its ₦443.5 billion outlay in 2024, represented the single largest operator commitment and financed an expansion to 43,000 kilometres of fibre backbone and a population coverage footprint of 93.7 per cent. In the first half of 2026 alone, MTN deployed a further ₦620.5 billion in capital expenditure, while the NCC confirmed that operators collectively committed to more than 12,000 site additions and upgrades across the year, with nearly 3,000 delivered by mid-year and over 730 new 5G sites deployed across 27 states.

Airtel Nigeria, Globacom, and the broader tower and fibre infrastructure companies that serve all four operators have each contributed to a shared physical layer that now underpins the daily flows of Africa’s largest digital payments economy.

What has changed in the past decade is the number of institutions whose business models rest on that shared layer. A decade ago, the relationship was bilateral: banks used mobile channels, and telcos provided them. Today, the ecosystem includes payment service banks, mobile money operators, merchant aggregators, and lending platforms, all of which route their services through the same base stations and fibre lines that carry voice calls and WhatsApp messages.

Moniepoint, which reported processing ₦412 trillion across more than 14 billion transactions in its 2025 review, claims to power eight out of every ten in-person payments made across the country. OPay, PalmPay, and Kuda serve millions more. None of them own a single base station or a metre of fibre. Their infrastructure is borrowed from telecoms operators whose investment decisions determine whether it can bear the weight that Nigeria’s digital economy now places on it.

The regulatory system has begun to recognise this interdependence. The Central Bank of Nigeria now requires all POS transactions to connect to both licensed Payment Terminal Service Aggregators, NIBSS and UPSL, with automatic failover between them, a mandate that exists precisely because a single point of failure in the connectivity chain can cascade into settlement failures across thousands of terminals.

The joint CBN and NCC circular of December 2024, which directed banks and telecoms companies to resolve the ₦250 billion USSD debt dispute that had accumulated since 2019, was itself an acknowledgement that the two sectors had become so structurally intertwined that a commercial disagreement between them posed a systemic risk to the national payments system.

The fragility of the arrangement surfaces periodically. When network disruptions occur and affect operators at different times, POS operators report failed settlements, merchants revert to cash where they can find it, and the digital commerce layer that Nigeria increasingly depends upon contracts until the signal returns. The Central Bank’s own data shows that currency outside banks stood at ₦4.922 trillion in June 2026, enough to sustain barely two days of normal transaction volume if the digital rails went dark. An economy that has moved this far online has no offline mode.

The telecoms sector contributed ₦5.2 trillion and 9.72 per cent of real GDP in the second quarter of 2026, up 10.38 per cent year on year, compared with 4.43 per cent for the overall economy. But these figures capture only the sector’s direct output.

They do not capture the ₦41.74 trillion in first-half POS volumes, ride-hailing platforms, e-commerce deliveries, telemedicine consultations, and agricultural price-discovery tools that use the same infrastructure. The NCC designated telecoms towers, base stations, fibre-optic cables, data centres, and submarine cable landing points as Critical National Information Infrastructure in 2024. Whether the country treats that designation as an operational commitment will determine how resilient the ₦3.4 quadrillion economy proves to be when the next disruption occurs.

Emenike is a Social Commentator and Policy Analyst