The country’s inflation dropped to 3.3% in March from 3.4% in February, driven by a reduction in food inflation which dropped to -0.4% from 0.5%. Still, the policymakers maintained that elevated inflation risks persist due to global factors and exchange rate woes.

Michael Atingi-Ego, BoU deputy governor, said in a virtual briefing on Monday that the country’s core inflation is projected to rise between 5.5% to 6% in the next 12 months, and will return to the 5% target in the second half of 2025.

“The evolution of inflation remains challenging, influenced by factors such as the shilling exchange rate, supply-side shocks, global inflation, and domestic food supply. Forecasts have been adjusted downwards to the previous round, largely due to [the] relative stability of the shilling exchange rate,” Atingi-Ego said.

The BoU’s raise is expected to continue shoring up the Ugandan shilling, which has been in a free fall since February. Atingi-Ego said that the shilling’s drop was caused by foreign investors withdrawing funds from Uganda to look for higher yields in other markets.

The local currency, one of the best performing in Africa at the start of the year, has dropped by 4% despite the central bank’s interventions. 

“The recent CBR increase has had a spillover effect of stabilising the shilling exchange rate. However, the shilling remains vulnerable due to outflows of short-term foreign investor funds from the domestic market in search of attractive yield in other markets and strong domestic demand by corporates,” Atingi-Ego said.

The BoU’s growth forecast for the country’s economy for the current fiscal year that ends in June remained at 6% despite the challenging macroeconomic environment.

In a circular sent to banks seen by TechCabal, the apex bank increased the minimum capital requirement to $364.56 million or naira equivalent of ₦500 billion by March 31, 2026, to address rising macroeconomic challenges in Africa’s largest economy.

“The prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks have underscored the need for banks to raise and maintain adequate capital to enhance their resilience, solvency, and capacity to continue to support the growth of the Nigerian economy,” CBN said in a circular on Thursday.

Access Bank, Nigeria’s third most capitalised bank with $190.6 million (₦251.8 billion), would need to raise an additional $187.8 million (₦248.1 billion) to meet the new recapitalisation requirements of the central bank. 

On Thursday, the Holdco, Africa’s largest consumer bank, said that it will ask its shareholders to authorise the plans at an annual general meeting set for April 19.

Access’ wants to raise part of the funds by increasing its issued shares from ₦17.7 billion to ₦26.6 billion. The company has asked for regulatory authorisation to raise capital of up to ₦365 billion by way of a rights issue on such terms and conditions and on such dates as may be determined by the directors.

Access’ decision to recapitalise comes amid a rapid expansion in Africa, including a recent acquisition of Kenya’s National Bank of Kenya (NBK) from KCB Group in a deal estimated at $100 million.

Paul Russo, KCB Group CEO, revealed that keeping NBK would have required the bank to inject up to $60.7 million, despite sinking $106.3 million since buying it in 2019. The war chest will allow Access to expand its footprint in East Africa’s largest economy with the NBK acquisition.

Already, the bank has operations in 15 African countries with a keen interest in revving up its presence and becoming the largest bank on the continent by 2027.

Access Holdings recently made its biggest play in East Africa with the acquisition of the entire issued share capital of National Bank of Kenya Limited. 

“This partnership encompasses more than a convergence of capabilities; it signifies the fusion of collective expertise, resources, and an unwavering commitment to drive financial inclusion, empowering millions throughout Africa,” Aig-Imoukhuede said.

Nigeria and Kenya are the first and third largest recipients of diaspora remittances in sub-Saharan Africa, data from the World Bank’s Migration and Development Brief report shows. In 2023, remittances to Nigeria accounted for 38% of the total $58 billion remittance flows to the region, growing by 2%, while Ghana and Kenya, posted estimated gains of 5.6% and 3.8%, respectively. 

As the largest consumer bank in Africa with over 60 million customers in 21 countries, Access Bank will significantly boost its remittance business by tackling the challenges customers face in making remittances within and outside the continent.

The collaboration, which is subject to approval from the Kenyan financial authorities, will see the players connect more than 60 million customers and 5 million businesses across 8 countries and process more than $1 billion a day in transaction value. Access Holdings which has a presence in 14 African countries and is the largest consumer banking institution, is expected to provide technology-infused financial services and Coronation Group will bring its technology expertise to the deal. 

M-Pesa, the mobile money platform of Safaricom, currently dominates the mobile money market in Kenya with a 96.5% share of the market. Another report has shown that 32% of remittances in Kenya are through mobile money operators. But M-Pesa is facing a future separate from Safaricom. In December 2023, Kamau Thugge, governor of the Central Bank of Kenya, said plans to split M-Pesa from Safaricom were ongoing to minimize shocks.

“African countries trade more with nations outside the continent than within themselves. Initiatives such as the African Continental Free Trade Area (AfCFTA) seek to address the lack of intra-continental trade. This partnership with Safaricom, Coronation Group and Access Holdings seeks to explore remittance corridors between East and West Africa, bringing alive the AfCFTA spirit,” said Sitoyo Lopokoyit, managing director, M-Pesa Africa. 

The first phase of the collaboration will concentrate on the biggest markets along the East and West African corridor, including Nigeria, Kenya, Ghana, and Tanzania. 

Five days out of seven a week, most of the over 25 ATM locations are empty because the machines are out of service, out of network, or out of cash. It is the same experience many bank customers face with about 22,600 ATM locations, as Inlaks data show, spread across the country.

Nigeria requires about 60,000 ATMs to meet up with its growing population of 216 million people and a banking population of 106 million adults, according to Tope Dare, executive director of Inlaks, the largest ATM operator in the country, which controls over 50% of the market. 

In 2010, Nigeria had roughly about 7,100 ATMs and the number grew to over 11,000 in 2011 because the CBN mandated the removal of the offsite deployment by banks. This meant that banks would no longer invest in ATMs outside their branches. The CBN seeded the deployment to independent ATM deployers which couldn’t run the project due to the cost. The ban was eventually lifted, allowing banks to invest more in ATMs. The number of ATMs then grew from 11,000 in 2011 to 16,000 around 2016 and 21,000 in 2019. It grew to 22,600 in 2021, where it has remained as of December 2023, an indication that investment in the market has reduced. 

Seventy-six per cent of the total ATMs in Nigeria are deployed by eight banks. Access Bank has over 4,000 ATMs, First Bank has about 3,300, UBA has 2,150 ATMs, Zenith has 2,100 ATMs, GTBank has 1800 ATMs, FCMB has 1,350, Polaris has 1300, and Union has 1,200. A total of 17,200 are owned by these eight banks.

Consequently, there needs to be more ATMs in Nigeria to serve the needs of the banking population, and this has always been the case with Nigerian banking services. 

The estimated branch count of the 24 commercial banks is about 4,500, which is not enough for an estimated 106 million banking population reported by EFInA. The BVN accounts are currently at 60.1 million and active bank account holders are about 135 million. The annual growth rate of ATMs in Nigeria is about 3%-4%, but this has dropped to below %1 in the past two years, as the Inlaks data show. 

Nigeria’s ATM per capita (number of ATMs per 100,000 adults) has also dropped from 16.92 ATMs in 2018 to about 16.15 in 2021. The global standard should be 1,000 ATMs per 100,000 bankable adults. Hence, Nigeria should have about 60,000 ATMs when it is measured against the unique bank customers at 60.1 million. Given the 22,600 active ATMs, there is a deficit of about 37,400 ATMs. As the number of bankable adults keeps increasing and more cards are issued, it is expected that ATMs will decrease in number over time, since the banks are not deploying more ATMs. 

Growth factors for ATMs

In the past, some of the factors that have contributed to the growth of ATM deployment in the country include banks’ profitability. When banks are profitable, they undertake branch expansion and capital expenditure. Banks also deploy more ATMs when their customer base is growing because this means that more cards will be issued, and there will be a need to provide cash and additional ATMs for the customers. Banks that undertake digitalisation initiatives often need to deploy more ATMs. Financial inclusion initiatives also impact the growth of ATMs positively. Banks will also deploy ATMs in areas with improved power generation, this is because the cost of electricity is a major burden for ATM deployment. 

Why investors are looking away from ATMs

Dare says the ATM business in Nigeria is facing its most difficult times due to the high cost of maintenance, growing adoption of other banking channels, foreign exchange crisis, galloping inflation, insecurity, and uncertainty in the ATM policy environment, all of which are driving investors far away from the market.  

In 2016, the exchange rate for the dollar was ₦250. It rose to ₦325 in 2017 and stabilised between ₦330 and ₦360 by 2019. Dare says buying at a rate of ₦380 in 2020 and ₦455 before the Muhammadu Buhari administration left office, impacted the unit cost of ATMs significantly. However, it went from bad to worse when the new government under Bola Ahmed Tinubu dramatically announced the unification of the FX rate, which pushed the official rate to ₦750. The black market price for the dollar is currently above ₦1,500. 

“A machine that we were selling at ‘x’ million naira this time last year, by today we are selling at 3.5x today. This is affecting the hire purchasing cost due to FX. The FX is also dependent on the customs duty and the OPEX. The cost of maintaining ATMs has gone up due to inflation, the cost of transportation, and the cost of spare parts because you have to import spare parts from abroad,” Dare said. 

ATMs are also seeing fewer investments because most investors are paying more attention to other growing electronic channels such as PoS terminals, mobile app transfers, USSD, and other alternative channels consumers use to make payments faster and more convenient. 

“The rapid adoption of digital payment methods is influencing consumer behaviour, leading to a shift away from traditional ATMs in favour of more convenient digital alternatives,” said Olaoluwa Awoojodu, CEO of E-Settlement Limited.

The non-profitability of ATMs is also a big factor for investors. The interchange fee also known as the surcharge fee, is one of the lowest in the world. Today, when a customer visits an ATM he/she is charged N35 after the third transaction. The fee is fixed by the CBN; hence banks cannot change it without approval from the regulator. For investors, fixing the fee does not make sense given that the unit cost for processing ATM notes in Nigeria is one of the highest in the world. Today, it takes a minimum of 150 notes to process the equivalent of $100, said a bank CEO who wanted to remain anonymous. 

According to Dare, to revive the ATM business, the government should consider offering a tax concession. Presently the customs duty on ATMs is over 25%, whereas the duty on solar products is 5%. ATM policymakers also need to de-emphasise cash availability in ATMs and champion the upgrade of the machines to provide cardless payment innovations such as Near Field Communication (NFC). NFC is a short-range wireless communication technology that allows devices to exchange data without a physical connection. Users can initiate a transaction by tapping their NFC-enabled smartphones in front of the contactless reader on the ATM. This connection facilitates secure data transfer between the user’s mobile banking app and the ATM, eliminating the need for a physical card. 

“You can also have a convergence of your mobile to the ATM where you can initiate a transaction in your phone, and you can go to the ATM to consummate it. ATMs should go beyond the regular functions of cash dispensing to more advanced and innovative solutions and contactless payment at minimal costs. ATMs will not die in any country as long as cash is king,” said Dare. 

Firstmonie processed over ₦1.1 trillion in transactions in 2023, more than double the amount handled by Access Bank, Zenith Stanbic IBTC, Union, Ecobank, FCMB, and Fidelity Bank combined.

The Interswitch report only reflects payment activity within its network and excludes information from  Nigerian Inter-Bank Settlement System (NIBSS) which also processes a significant volume of payments.

The report shows that, compared to previous years, Firstmonie was outpaced by five VC-backed fintech companies—Moniepoint, Opay, MFS Africa (Onafriq), and Nomba. Previous Insterswitch reports show that from April 2021 to March 2022, Firstmonie processed the second-highest amount of agency banking payments—₦2 trillion, double what it processed in 2023.

Interswitch declined to comment on the figures.

Between 2021 and 2022, three bank-led agency banking services were in the top 10, but this new report shows them losing momentum and market share to fintech companies like Nomba, which processed ₦1.14 trillion—nearly 2.5 times what it did in 2021-2022.

One factor that may have contributed to the increased market share of agency banking players is the cash crunch in early 2023. As Nigeria grappled with widespread cash scarcity in 2023, traditional banks’ network infrastructure faltered under the weight of increased digital payments, leaving their various payment platforms, including POS agents, teetering. This operational nightmare was a golden opportunity for nimble fintech players whose platforms witnessed a surge in usage, including POS transactions.

The numbers speak for themselves. Paga, a long-time fintech player, processed a staggering ₦147.1 billion in transactions, more than double the ₦68.3 billion it handled through Interswitch’s platform between April 2021 and March  2022. This figure surpasses the transaction volume of the agency banking business of Access Bank, one of Nigeria’s biggest banks.

Industry analysts attribute this shift to several factors. Fintechs are perceived as more agile and adaptable, offering easier agent onboarding, a wider reach through mini POS terminals, and innovative solutions. Additionally, the 2023 cash crunch exposed limitations in traditional banking infrastructure, driving users towards alternative channels like agency banking, which fintechs were quicker to capitalize on.

More than being nimble, these fintechs are also more accessible than bank-led agency banking providers. While Firstmonie still boasts the largest bank-led agent network in Nigeria with over 200,000 agents, which it claims are “spread across 772 out of 774 local government areas in Nigeria,” it has stricter agent requirements that exclude a larger part of the small and medium businesses.

To become a Firstmonie agent, you must have an existing business registered with a corporate body or a current account. This excludes a lot of legitimate small businesses and even individuals who want to make a business of the POS agency by itself. Fintech competitors like Moniepoint and Opay only require means of personal identification.

“Amongst fintech themselves, there is cutthroat competition because this is all they have to survive on,” an agency banking expert told TechCabal. 

“Banks have many other options. They make money from loans, transfers, and more.” However, fintech has to come up with ways to survive or die. Last year saw the exit of agency banking services like Kippa Pay. The Interswitch report shows that the fintech processed only ₦36 million in 2023 before it closed shop due to the decreasing margins in the business. 

It is also plausible that fintech companies like Opay and Moniepoint, which have raised funding, can use VC funds to subsidise their products and services to gain market share. Firstmonie, for instance, reportedly has a higher charge on transactions than fintechs. VC funds also make fintech quicker on their feet than banks. While banks may need to wade through bureaucracy to make capital investments in hardware like the much cheaper mini POSes, fintechs like Nomba and Opay have been aggressively pushing to widen and deepen the reach of their services.

However, there may be a shift in dynamics in favour of the banks shortly, considering how inflation is driving up the cost of POS devices and shrinking margins. Seeing that VC funding is less forthcoming, this fintech may give way to banks that already have sustainable businesses that can feed the growth of their agency banking arm.

The company also said that the board will soon announce the appointment of an acting Group CEO who is expected to build on the “legacy of growth and operational excellence.” 

“The Access family has suffered a major loss with the passing of Dr. Wigwe who was a great friend and fine gentleman. He had a prodigious intellect, admirable personal qualities, and vast business experience which he brought to bear on the Access Family and for which we owe him a debt of gratitude,” said Abubakar Jimoh, chairman of Access Holdings in a statement.

The helicopter carrying Wigwe and the other passengers was identified as a Eurocopter EC130 by the U.S. Federal Aviation Administration.

The aircraft was headed to Las Vegas when it crashed near a border city between Nevada and California on Friday night, as per reports.

The 57-year-old CEO was a key figure in the transformation of Access Bank to a holding company and the largest bank in Nigeria by total assets. The bank is also one of the largest retail banks in sub-Saharan Africa with over 60 million customers in 20 countries. 

Apart from the banking sector, Herbert Wigwe was also invested in education with his latest project being a university named after him and located in Rivers State. 

On Monday, Yemi Cardoso, the Central Bank Governor, told Arise TV that the $7 billion figure was audited by Deloitte and around $2.4 billion in “invalid claims” were discovered. 

According to Cardoso, some infractions include not having valid import documents, claims from entities that didn’t exist, beneficiaries and account parties who got more foreign exchange than they asked for and some who did not ask for forex but got it. 

“We are not paying these claims if it is not a validly constituted request,” Cardoso said. And while Cardoso claimed the arrears owed to airlines had been paid, the airline association IATA said there was still $700 million unpaid.

“What remains is about $ 2.2 billion to be settled, and I am confident. We would clear all of that very shortly,” he added.

Last week, the CBN issued new policy directions to stabilise the Naira after a week of volatility. The apex bank aims to unify prices and close the disparity between the official FX window and the parallel market. 

PesaLink, a Kenyan platform that enables real-time fund transfers between bank accounts, is launching a merchant payments option. PesaLink made this announcement on X and follows an M-PESA service outage that has posed challenges for customers in making payments for goods and services through the paybill service.

“Most PesaLink Payments are business-related: bulk transactions, invoices, rent and more. Watch this space for merchant payments… some news coming soon!” PesaLink said on X, in response to customers who have been requesting for the feature for a long time.

One PesaLink customer said that they were calling for PesaLink to exist as a separate entity not associated with its current partners, Kenyan banks. “Pesalink needs to have an app and its own ecosystem that integrates with payment services and allow us to withdraw through local agents,” the customer, Kiruti Itimu said. Another fintech users, Saruni Maina, added, “Actually, PesaLink needs to have a merchant payment option to rival Lipa na M-PESA.”

Lipa na M-PESA, a cashless payment service that enables customers to make payments for goods and services, is supported by several products, with two being the most common. One of them is the M-PESA Till, which allows business owners to collect payments on the till and use the funds collected for other transactions directly from it. The other is the M-PESA paybill service, a cash collection service enabling businesses to regularly collect money from customers through M-PESA.

PesaLink, launched in 2017 by the Integrated Payment Service, a for-profit arm of the Kenya Bankers Association (KBA), has been successful due to its operational management by an independent agency (KBA). This approach has helped alleviate cases of conflict of interest amongst local banks. The platform facilitates affordable and faster real-time transactions, separating itself from alternatives like real-time gross settlement (RTGS) or cheques. Customers can also send up to KES 1 million ($6,135) to another bank account for KES 150 ($0.92), surpassing M-PESA’s current cap at KES 500,000 ($3,067).

According to a calendar released by the bank today, the CBN is proposing six rate meetings throughout 2024. 

 Monetary Policy Committee meetings, which set interest rates, is an instrument through which the CBN controls inflation. 

Nigeria’s inflation has soared all through 2023 to a 27-year high. While experts who have spoken to TechCabal on inflation figures have predicted interest rate hikes, Yemi Cardoso has held out, failing to call any meeting since his appointment. 

Adedayo Bakare, an investment analyst at Money Africa, believes raising interest still holds the key to curbing inflation.

“MPR is not ineffective; the CBN has broken the transmission of MPR to the financial markets and the overall economy,” Bakare said.

Oxygen X is not entirely a new product for the Access Corporation, having originally been named Quickbucks. The Quickbucks app has a 2.6-star rating on Android’s Playstore and was originally launched two years ago. 

“The Quickbucks app has about 7 million customers, and that is what they are trying to migrate to Oxygen,” one person with knowledge of the business said. “FairMoney and Opay lend to everyone, but banks want you to be their customer before lending to you.” 

A standalone lending app means that Oxygen can acquire users who don’t have Access Bank accounts.

While other holding companies in the financial services space have focused on fintech plays (GTCO has Squad, Stanbic has Zest, and Access has Hydrogen), Access Corporation has become the first to make a play for standalone digital lending. 

Oxygen will compete with digital lenders like Carbon and OPay, serving a growing mass of digital-first customers. Since moving to a holding company structure in 2020, the Access Corporation has made big bets, including the launch of Hydrogen and a rapid expansion across the continent. 

“We want to be present in 22 countries over the next five years,” Herbert Wigwe, Access Corporation’s CEO, said in a Bloomberg interview. Since then, the banking subsidiary has acquired several banks to deepen its global reach. 

In November 2023, Access Bank said it was expanding to Asia, joining the likes of South Africa’s bank TymeBank to open shop in Asia. Early this month, the bank acquired Megatech Insurance Brokers Ltd, an insurance brokerage company licensed and regulated by the National Insurance Commission.