CBN licences in Nigeria: types, costs & what fintechs should know
If you’re building a fintech startup in Nigeria, one of the first things you’ll need to figure out is this: what CBN licences do we need to operate legally, and how much will it cost? Whether you plan to launch a digital wallet, a mobile money app, a savings platform, or a full-scale digital bank, the Central Bank of Nigeria (CBN) requires you to be licenced. And not just any licence. The type you apply for depends on your services, how you move money, and whether you’re holding customer funds. This guide breaks everything down clearly. You’ll learn: The different types of CBN licences available What each licence allows you to do The capital requirements and actual costs involved So, what kind of licence does your startup need? Let’s find out. The main types of fintech CBN licences in Nigeria Before investing time or money into your fintech product, you must know what licence aligns with your services. Below are the main types of licences issued by the CBN, what they’re used for, and the kinds of startups that apply for them. We’ve also included capital requirements, so you know what to expect upfront. 1. Switching and Processing Licence Who needs this: Companies that process payments, settle transactions, or serve as payment gateways (e.g., Paystack, Flutterwave). What it allows you to do: Transaction switching, card processing, clearing, and settlement services. Minimum capital: ₦2 billion Other requirements are PCI-DSS certification, a disaster recovery plan, risk frameworks, and agreements with banks or merchants. Application fee: ₦100,000 (non-refundable) CBN deposit (escrow): ₦2 billion (returned after the licence is issued) Is your startup building infrastructure that connects banks, wallets, and payment platforms? Then this is likely the licence you need. 2. Mobile Money Operator (MMO) Licence Who needs this: Wallet-based platforms that allow users to store and transfer funds (e.g., Paga, OPay). What it allows you to do: Offer wallets, send/receive money, pay bills, and more. Minimum capital: ₦2 billion CBN deposit (escrow): ₦2 billion Other requirements: 5-year business plan, KYC/AML procedures, data protection policies, and agreements with telcos or banks. Planning to run a mobile wallet or build a money transfer app? This licence is mandatory. 3. Payment Solution Service Provider (PSSP) Licence Who needs this: Gateways and APIs that facilitate online transactions for other businesses (e.g., Remita). It allows you to provide backend services for payment processing between banks, merchants, and consumers. Minimum capital: ₦100 million Escrow deposit: ₦100 million Extra requirements: Card security certifications, partner agreements, robust IT, and risk policies. If your startup supports merchants with checkout systems or payment APIs, this is the licence for you. 4. Payment Terminal Service Provider (PTSP) Licence Who needs this: Companies that manage and distribute POS terminals. It allows you to deploy and maintain point-of-sale devices across Nigeria. Minimum capital: ₦100 million Escrow deposit: ₦100 million Key requirements: PCI-DSS/PA-DSS compliance, draft technical agreements, and a detailed project rollout plan. Does your business manage POS terminals or build POS solutions? You’ll need this licence before you expand. 5. Payment Service Bank (PSB) Licence Who needs this: Institutions focused on providing banking services to the unbanked and underbanked, often in rural areas. What it allows you to do: Accept deposits, transfer funds, operate savings products, and issue debit cards. Minimum capital: ₦5 billion Special requirement: At least 25% of banking agents must be in rural or underserved areas. Thinking of launching a digital bank that targets financially excluded populations? This is your go-to licence. 6. Super-Agent Licence Who needs this: Platforms managing a network of smaller agents (not necessarily customer-facing). What it allows you to do: Create and manage an extensive agent network for financial services. Minimum capital: Varies (often ₦50 million+ depending on reach) Additional requirements: Operational structure, risk controls, signed agreements with agents and financial partners. If you’re building a last-mile distribution model using field agents or kiosks, this licence gives you the legal framework to scale. 7. CBN Regulatory Sandbox Who needs this: Early-stage startups testing innovative ideas that don’t clearly fall under existing CBN licences. It allows you to test new financial products under CBN supervision without full licencing. Cost: No capital deposit required during testing Process: Application-based, with approval timelines of 45–60 business days Still figuring out your model? The sandbox allows you to validate your idea before spending big on a licence. CBN fintech licence summary table Here’s a quick table showing the most common fintech CBN licences in Nigeria, their use, and the capital required. What does it cost to get a CBN fintech licence? Getting a licence in Nigeria doesn’t just mean filling out forms and waiting for approval. It means spending real money. If you don’t budget properly, the process can stall or fail. Let’s break down the actual costs you should expect. 1. Application fees These are non-refundable and must be paid to start your licencing process. Depending on the licence, most application fees range from ₦100,000 to ₦500,000. Some licences, like Payment Service Banks, may require additional administrative or inspection fees during the review stage. Tip: Don’t confuse this with the capital deposit. Application fees are paid upfront and are separate from your operational funds. 2. Capital requirements This is where it gets serious. Switching/Processing and MMO: ₦2 billion (escrow deposit) Payment Service Bank (PSB): ₦5 billion PSSP and PTSP: ₦100 million Super-Agent: Varies, but often ₦50 million or more Digital banks: ₦2 billion+ Microfinance banks: ₦20 million to ₦100 million (Tier-based) These amounts are either: Held by the CBN during processing, then refunded Or required as minimum paid-up share capital, meaning you must own the funds and reflect them in your financial statements. 3. Legal, compliance, and consulting fees You’ll likely need legal experts, compliance advisors, and sometimes former regulators to review your documents and structure. Expect to spend ₦2 million to ₦10 million on: Legal counsel Drafting partnership agreements Developing KYC/AML policies Reviewing tax and ownership documentation This is one of the most underestimated costs. Cutting corners here could lead to
Read MoreThe promise of Mystocks lies in access: To a pan-African digital stock exchange
If you live in Africa, it is likely that you can easily buy Amazon stocks than you might be able to buy stocks of a local marketplace in your country’s national exchange or that of a neighbouring African country. Mystocks Africa is trying to fix. As U.S.-listed equities soak up billions in African capital through apps like Bamboo and Risevest, Mystocks is betting that the next frontier of fintech isn’t sending capital out—it’s keeping it in, circulating it across Lagos, Nairobi, Johannesburg, Accra, and Gaborone. Founded in 2024 by Humphrey Kebaya and Mooketsi Morolong, Mystocks Africa, a mobile-first investment platform, is building a unified brokerage that allows both retail and institutional investors to trade across Africa’s major stock exchanges from a single app. Investors can trade in local currency, receive real-time analytics, and have access to an AI-powered portfolio intelligence. The app offers real-time trading across five African stock exchanges—Nigeria, Kenya, Ghana, Botswana, and South Africa—with plans to add Egypt, Morocco, and Tunisia later this year. Users can open an account in 24 hours and begin investing with as little as $10. Beyond equities, the platform supports trading in government bonds, money market funds, and ETFs. It also unlocks access to alternative assets like REITs and carbon credits—asset classes that have historically been inaccessible to or illiquid for retail investors across the continent. The challenges of building a Pan-African brokerage The promise of cross-border African investing faces two deeply rooted constraints: regulation and infrastructure. Every market Mystocks enters comes with its own capital markets authority, compliance regime, and interpretation of brokerage activity. For now, the startup operates through licensed local partners, but deeper integration will eventually require direct licenses in each country. That process can be both costly and unpredictable. Then there’s the issue of technology itself. While exchanges like the JSE and NGX have mature APIs, many others do not. Mystocks has found itself offering to co-develop digital plumbing just to enable reliable order flow and market data. Building a pan-African brokerage, in many ways, means building a continental infrastructure in real time. Still, Mystocks is moving with urgency. The company is also building a dedicated IPO portal that will allow both African and international users to participate in public listings in any supported market. For years, African startups have struggled to go public because local markets lack depth and retail participation. By aggregating demand across multiple countries, Mystocks hopes to inject new liquidity into African listings. The team is already preparing for potential high-profile IPOs like Flutterwave’s, with ambitions to include such deals directly on the platform. The company’s product suite also includes a subscription-based terminal called “Bridge” that offers institutional users market intelligence, research insights, and AI-driven analytics—essentially a Bloomberg terminal tailored to African markets. While Bloomberg charges up to $22,000/yearly, Mystocks’ Bridge product is priced at $199 for institutions and $8/month for retail investors. Even at its cheapest tier, Bridge includes a real-time news feed, squawk box alerts, and personalized stock guidance powered by generative AI. 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Mystocks earns from trading commissions, subscription fees, FX conversion margins, research sales, advertising, and affiliate partnerships. It also sells aggregated data and order flow to institutional clients. To drive retention, the startup layers on push notifications, fee rebates, referral bonuses, and gamified features like
Read MoreJumia launches third-party logistics service in profitability push
E-commerce giant Jumia is now offering its logistics network to third-party businesses, including traders who operate solely on social media platforms, a segment it previously considered competition. The strategic pivot, aimed at reducing fulfilment costs and diversifying revenue, comes as the company doubles down on achieving profitability by 2027. The new service, Jumia Delivery, allows third-party sellers to ship packages nationwide through Jumia’s existing logistics infrastructure, including its 494 pickup stations in Nigeria. After a pilot in Ivory Coast, the service launched in Nigeria and will soon expand to Kenya, Senegal, and Ghana, pending regulatory approvals. “Local social commerce merchants [one of our competitors] will always be around, and we are looking at this pool of merchants as an opportunity for Jumia,” CEO Francis Dufay shared on its Q1 earnings call on May 8. “We are working to onboard them to our marketplace and help them generate more sales. We are also looking to sell our Jumia delivery services and generate profits from them.” The move puts Jumia in competition with established logistics providers like Uber, Bolt, Chowdeck, Sendbox, and GIG, which have already built significant distribution networks. Unlike its competitors, Jumia is betting that opening up its fulfillment engine will drive scale and improve cost efficiency across its operations, particularly in the last mile. Until now, Jumia has implemented several strategies to reduce delivery expenses, which amounted to $9.4 million in the first quarter of 2025, and increase margins. So far, the benefits have come from staff reductions, including a 3% decrease in headcount in Q1 2025, renegotiated agreements for logistics and technology, and more efficient warehouse processes. Jumia Delivery will allow the company to move more goods in each trip, optimising fixed costs such as warehousing and last-mile operations. Nonetheless, Jumia Delivery will have to contend against a few players that have gained ground in distributing their logistics services and earned brand equity, including established players like DHL, GIG Logistics, Kwik Delivery, and Sendbox. Jumia also faces competition from the delivery services of Glovo, Chowdeck, Uber, Indrive, and Bolt, which are leveraging network effects to distribute their delivery services. The company will also compete with a growing number of independent delivery riders, who leverage personal relationships and offer more competitive pricing to sellers. Still, Jumia’s leadership is optimistic. “This is a scalable business that extends our value proposition across the digital economy,” the company stated. This development and other gains shared during the report have been well received by investors: Jumia’s share price climbed from $2.40 to $3.55 after its earnings call.
Read MoreSpar enters South Africa’s mobile market with MTN-backed MVNO
Spar Group, the South African retail giant, is expanding into telecoms with the launch of Spar Mobile, a prepaid mobile virtual network operator (MVNO) built in partnership with megsApp and backed by MTN. The move deepens the convergence of retail and telecom in Africa’s most developed mobile market, where affordability and loyalty-driven models are reshaping competition. The MVNO will offer prepaid voice, data, and SMS services, with a twist: shoppers can earn free mobile data by purchasing selected promotional items in Spar and Tops! stores. The company claims this model could cut mobile costs for customers by up to 50%. “The Spar Mobile offering is anchored on simplicity, affordability, and trustworthiness, giving us a chance to create one-of-a-kind deals for our customers – linking groceries and Tops! Products with free data,” said Blake Raubenheimer, omnichannel executive at Spar Group. Customers can buy Spar Mobile SIM cards in-store for R15 ($0.80), which come preloaded with 300MB of data and R10 ($0.54) in airtime. In addition to traditional SIM cards, Spar Mobile supports eSIM functionality and number porting, and will be integrated with the Spar mobile app to simplify top-ups and account management. “Spar is well-positioned to run and operate an MVNO. We are building the network from very competitive pricing that is simple and easy for customers to understand,” said Raubenheimer. The launch follows similar MVNO plays from South African retailers, including Pick n Pay, TFG Connect, and Boxercom, all of which have launched MVNOs using MTN’s network. Since launching its MVNO platform in 2020, MTN has become a key enabler of retail-led telecom services in the country, second only to Cell C in MVNO hosting. South Africa’s MVNO market is projected to hit $90.91 million in 2025, according to industry estimates, driven by growing demand for flexible, low-cost mobile alternatives. Retailers are betting that bundling mobile services with everyday purchases will not only strengthen brand loyalty among existing customers but also attract new consumers looking for seamless digital access, particularly in price-sensitive markets. If Spar Mobile proves successful in South Africa, there is potential for expansion into other markets where Spar and MTN both operate. Countries like Botswana and Zambia, where both entities have a presence, could benefit from similar retailer-driven mobile services. A Spar-branded MVNO could serve as a practical solution for consumers in these markets, particularly if the incentive-driven model of earning free data through shopping resonates well with South African customers.
Read MoreNigerians will pay more for calls and data under proposed 5% telecom tax
Telecom subscribers in Nigeria could soon be paying 5% more for data and voice services if the Nigeria Tax Bill 2024 is signed into law. Passed in the Senate on May 8, 2025, the bill reintroduces a controversial 5% excise tax on telecom services, a move operators warn would ultimately burden consumers and stall the country’s push for broader digital inclusion. The 5% excise duty was first introduced in the Finance Act of 2020 under former President Muhammadu Buhari. Designed to expand the list of goods and services subject to excise taxes, it was met with stiff resistance from telecom operators and consumer advocates. They warned it would raise the cost of already essential services in a struggling economy. President Tinubu suspended the tax in July 2023, citing its potential to worsen inflation and impede access to digital services. Fast forward to 2025, and the industry still isn’t buying it. As of August 2024, telecom operators reportedly paid 54 different taxes, according to the Association of Licensed Telecom Operators of Nigeria (ALTON). With the sector only just rebounding from currency devaluation and rising operational costs, operators fear the reintroduction of the excise duty could choke recovery efforts and slow digital inclusion. “We’ve had no clarity on how the 5% tax would be implemented, but the burden will fall on the consumer,” said Gbenga Daniel, President of ALTON, which represents major players like MTN Nigeria, Airtel Nigeria, Globacom, and 9mobile. “Telecoms should be treated as a social good, not taxed like luxury items. No one taxes telecoms like this in countries where infrastructure is taken seriously.” Industry stakeholders argue that excise taxes are typically reserved for luxury or harmful goods such as designer watches, luxury cars, alcohol, or tobacco, whose consumption governments might want to curb. Internet access, they say, hardly belongs in that category. An excise duty, however, is a specific type of tax that is levied on certain goods or services at the time of their purchase. The Nigerian Tax Bill describes excisable transactions as “transactions which take place— (a) physically in Nigeria, the excisable transaction is the provision of the service; and (b) remotely or virtually, the excisable transaction is the receipt or consumption of the service in Nigeria.” That means both domestic and international service providers offering telecom services in Nigeria would be liable to collect and remit the 5% tax, passing the cost on to the customers. “There’s no wiggle room for operators to absorb this cost,” said Anthony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON). “Operators are already working with a tariff increase that fell short of what they need. The new tax will squeeze margins and hit consumers the hardest.” Nnenna Ukoha, Head of Public Affairs at the Nigerian Communications Commission (NCC), told TechCabal that the regulator has not yet received the official version of the bill for review. Meanwhile, the bill does include some reliefs: 0% VAT on essential goods and services like food, healthcare, education, rent, public transport, and renewable energy. These categories, according to Presidential Fiscal Policy and Tax Reforms Committee Chair Taiwo Oyedele, make up around 82% of average household consumption, and close to 100% for low-income households. Still, the telecom sector, which recently implemented a 50% tariff increase on its services, remains uneasy. The timing of the bill is especially delicate, coming just as major players like MTN Nigeria and Airtel Africa are bouncing back financially. MTN posted a ₦133.7 billion ($83.1 million) profit after tax in Q1 2025, reversing a ₦392.7 billion ($244.06 million) loss in 2024. Airtel Africa reported $661 million in pre-tax profit for the year ending March 2025. These gains are a result of higher data usage, tariff hikes, and ongoing infrastructure investments. “The government should not be so extractive of the average Nigerian,” said ALTON’s Adebayo. “Someone recharging ₦1,000 will feel this 5% tax the most. It also places an additional compliance burden on operators to collect and remit the tax.” They argue that short-term tax revenue shouldn’t come at the cost of long-term growth. As the bill awaits harmonisation between the Senate and House of Representatives before it is forwarded to the President for assent, all eyes remain on whether the Tinubu administration will heed the telecom industry’s calls or press ahead with its broader fiscal ambitions.
Read MoreOpera spins off MiniPay app to target Africa’s $54 billion stablecoin market
Opera, the Norway-based internet company best known for its web browser, has launched MiniPay, its stablecoin payments app, as a standalone iOS app, opening access to users across Africa for the first time. The app was previously embedded in Opera Mini, limiting reach to Android users only. Opera joins a growing list of foreign players like Coinbase seeking growth in African markets as stablecoins gain ground globally. Opera hopes to compete more aggressively in Africa’s fast-growing digital currency market, where stablecoins accounted for 43% of crypto transactions in 2024. With $125 billion in crypto payments flowing through the continent and stablecoins making up $54 billion of that, the company sees a growing appetite for dollar-backed digital assets as tools for everyday payments and savings in volatile currency markets. “Stablecoins are gaining widespread recognition, with increasing demand from both developed and emerging markets alike,” a company spokesperson told TechCabal. “In Africa, there’s a strong need for faster, more affordable, and accessible financial solutions.” Opera says it wants to make global payments “as easy as texting.” It first launched MiniPay in September 2023, but it wasn’t until October 2024 that it built a standalone app for Android users. Now, Africans can access the app on iOS and Android smartphones. “It made sense to launch the iOS and Android standalone app, making MiniPay accessible across all major mobile platforms,” said the company spokesperson. “We have seen rapid growth in key African markets, so the standalone app offers more flexibility and allows us to scale faster.” Opera partnered with Celo in 2021 to build the MiniPay app on the Celo blockchain network. Celo is known for its fast settlement times, low-cost transactions—which cost less than a dollar for stablecoin payments—and mobile-first design capabilities. The app offers M-Pesa and Apple Pay payments in key markets in Africa, like Kenya and South Africa, and Latin America (LATAM) to allow users to spend and withdraw money easily to their bank accounts. MiniPay plans to expand further in North America, LATAM, and Europe in the second and third quarters of 2025. 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The app supports three stablecoins—cUSD (Celo US dollar), USDT, and USDC—and offers a $0.10 welcome bonus alongside daily cash rewards when users log in. MiniPay operates as a non-custodial stablecoin wallet app, meaning it allows users to control their funds. The app does not handle fiat transactions directly; instead, it relies on partners and liquidity providers like Yellow Card, Fonbnk, Partna, TransFi, Transak, and Onramper for competitive exchange rates. According to Opera, MiniPay supports over 35 local currencies, making it easy for users to exchange their stablecoins for fiat money (off-ramping). “As a self-custody solution, it is an unregulated software product and does not manage fiat transactions directly,” the company said. “MiniPay integrates with a range of regulated partners who serve as the on-ramps and off-ramps in their respective markets. MiniPay itself only facilitates transactions in dollar-denominated stablecoins (such as USDT, USDC, cUSD).” Facilitating stablecoin trades means MiniPay will possibly be classified as a securities exchange in markets like Nigeria, requiring the app to be registered with the country’s Securities and Exchange Commission (SEC). The regulatory aspect of MiniPay’s global march may draw attention to its ambition. In markets like Nigeria, where regulators are tightening oversight, Opera says its reliance on
Read MoreKenya proposes ban on cashless-only payments below $775 under new bill
Kenya may soon outlaw cashless-only transactions for everyday purchases, under a proposed law that would make it mandatory for businesses to also accept physical currency for payments below Ksh100,000 ($775). The Central Bank of Kenya (Amendment) Bill, 2025, sponsored by Suba South Member of Parliament Caroli Omondi, would make it illegal for businesses operating in physical locations to reject cash for transactions under $775. Omondi said the bill is about protecting everyday Kenyans who are being left behind as more businesses go digital. If passed, the law would mark a significant regulatory intervention in Kenya’s fast-digitising economy, where mobile money and card payments have become the default in neighbourhood shops, restaurants, and public transport. It would compel businesses, many of which have embraced cashless payments to boost accountability and reduce theft, to rethink their processes. “A majority of Kenyans still rely on cash transactions while some older people do not know how to use mobile money services, making it discriminatory to deny them access to services or buying goods in cash,” Omondi said. Under the proposed law, businesses that violate the rule could face fines of up to $775 along with potential civil liability if customers choose to pursue damages. While the Central Bank of Kenya (CBK) has not publicly commented on the bill, the regulator has long pushed for digital payments and market-led adoption. The value of Kenya’s digital payments is projected to reach $14.5 billion by 2028. The bill could clash with the government’s digital transition, coming when all state services from park entry fees to birth and death registrations and passport applications are processed exclusively through the e-Citizen platform. Most of these payments are under $20. However, Omondi warned that overreliance on digital-only transactions leaves Kenya vulnerable, citing the July 2024 IT crash in the United States, which caused widespread disruption as electronic payment networks went offline. “Suddenly and without warning the exchange of goods and services stopped with the IT outage. Buyers were unable to effect cashless payments. Everyone was in need of immediate cash to make payments,” Omondi said. The bill, still in its early days, will go through a parliamentary committee review and public consultation before it returns to the floor for debate.
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👨🏿🚀TechCabal Daily – A for Access. B for Bank. C for consequence
In partnership with Lire en Français اقرأ هذا باللغة العربية Howdy! How much do you know about technology in Francophone Africa? What are the region’s most important startups or crucial policy developments around tech innovation? We’re excited to partner with Lina Kacyem, Investment Manager, Launch Africa Ventures to introduce a web-only newsletter about tech in Francophone Africa. Lina has almost twenty years of experience in various sectors of the financial industry and is the co-founder of the angel network, Next Millennia Angels. As an investment manager, Lina leads investments in Francophone Africa and will bring decades of first-hand experience, insider insights and analysis of the region’s technology landscape into curating a newsletter that will help you and our wider audience learn about the tech innovation, policy, culture, and economy as it unfolds in Francophone Africa. Expect a dispatch every two Tuesdays, beginning later today. Access Bank Kenya and ABC in regulator crosshairs MTN Group grew its revenue by 10.4% in Q1 2025 IHS shares hit 20-month high Egypt’s Nawy raises $75 million World Wide Web 3 Opportunities Banking Access Bank Kenya and ABC could get fined by the CBK over non-compliance on loan rate cuts Image Source: Zikoko Memes/TechCabal Bank ABC and Access Bank Kenya—the subsidiary owned by Nigeria’s largest bank by assets—could get fined by the regulator, Central Bank of Kenya (CBK), for refusing to comply with the loan rate cuts. The two banks top a list of five lenders that raised lending rates in March, despite warnings from the Central Bank of Kenya. Access Bank pushed its average rate to 20.5%, up from 20.39%, while ABC moved from 17.42% to 17.54%. Others—DIB, Kingdom, and Guardian Bank—also nudged their rates higher, putting them in the regulator’s crosshairs. This showdown has been brewing for months. Since August 2024, the CBK has been cutting its benchmark policy rate to make loans cheaper. But some banks, rather than follow suit, have held firm—or raised rates altogether. Frustrated, the CBK now plans to start fining non-compliant lenders from June: KES 20 million ($155 million) upfront or three times the gain, plus daily penalties. Bank executives, too, could be personally fined. So why the standoff?Banks argue that the CBK’s new pricing formula—pegging rates to its benchmark rate plus a lending margin—is too rigid. They prefer using the interbank rate, which they say reflects market realities better. Yet, Kenya is not an isolated case, even in Africa. In 2018, the Bank of Ghana (BoG) and commercial banks in the country went through the same dance. The BoG had cut its key rate by 550 basis points to 20% for nearly two years, but banks didn’t pass on the lower rates to borrowers—largely due to a high volume of bad loans. Elsewhere, in South Africa and Morocco, regulators have also struggled with banks to rein in lending rates, as lenders remain wary of credit risk. What the CBK has going for it is the Supreme Court’s June 2024 ruling, which stated that banks must seek approval from the Cabinet Secretary before raising interest rates on loans. This decision cleared the path for the CBK’s push to enforce compliance with rate cuts. And it seems determined to win this one. Whether through fines, pressure, or more inspections, it wants rates to come down—and fast. Because if credit doesn’t flow, the economy won’t either. In this tug-of-war, it’s borrowers who are still paying the price. Seamless Global Payments With Fincra. Issue accounts in NGN, KES, EUR, USD & more with one integration. Send & receive funds seamlessly across borders; no more banking hassles or complex conversions. Create an account for free & go global today. Companies MTN Group grew its revenue by 10.4% in Q1 2025 as fintech drives growth for the company MTN head office/Image Source: TechCentral On May 12, MTN Group, Africa’s largest homegrown telecom operator, reported a 10.4% year-on-year (YoY) increase in Q1 2025 revenue—from R42.90 billion ($2.34 billion) to R47.37 billion ($2.6 billion)—accounting for the currency devaluations across several of its markets. Nigeria reclaimed its title as MTN’s top-earning country—after Q4 2024’s slump. The country generated R13 billion ($710 million) in revenue, slightly ahead of South Africa’s R10.7 billion ($584 million). Regionally, the group’s’s West and Central Africa (WECA) operations led the charge, raking in a combined R15 billion ($819 million) to become MTN’s most profitable region this quarter. Data revenue increased by 17.9% as the demand for data reached 5,677 petabytes in the quarter. However, voice, which has historically been a top money-spinner for MTN, surprisingly fell, declining by 0.1%. Fintech was the standout performer. MTN’s mobile money platform (MoMo) handled $95.3 billion in transaction value—up 48.9% from $72.7 billion. The number of transactions also rose from 4.8 billion to 5.5 billion, with an average transaction size of $17.3. Put plainly: users transacted more often, and with fatter wallets. This high-octane activity helped fintech revenue climb from R4.9 billion ($268 million) to R6.2 billion ($339 million)—a 25.2% increase in constant currency terms. Uganda remained the fintech crown jewel, driving the lion’s share of growth. Meanwhile, Nigeria’s MoMo user numbers continued to decline, likely affected by delayed regulatory approvals and licence bottlenecks. MTN’s Q1 shows a company leaning heavily—and smartly—into digital services, driven by the increasing appetite for data services among subscribers. High data purchases lead to more smartphone use; more smartphone use exposes users to fintech adoption, which MTN plays in. The telecom operator benefits on both ends. It already has partnerships with satellite companies Lynk Global, Starlink, Eutelsat OneWeb, and AST & Science in different markets as it plans to strengthen its broadband reach. MTN’s digital bets are what’s keeping the engine humming—and shareholders smiling. Or at least, not frowning. Power Your Business With Paga Engine Join businesses already building smarter with Paga Engine. Get started today. Telecoms IHS shares hit 20-month high as Nigerian telcos bounce back Image Source: Google What is good for the goose is good for the gander. As Nigeria’s telecom operators—MTN and Airtel—bounce back from a
Read MoreAsk an Investor: Why is local capital important for Africa’s tech ecosystem?
For five consecutive editions of Ask an Investor, we’ve asked Africa-focused investors the same core questions: how can local capital fund the continent’s startups, how do those backers add value, and what makes money? This week, our recap of the past five episodes pulls hard-won lessons from every interview: Marge Ntambi (Benue Capital), Axel Peyriere (serial angel & founder), Fisayo Durojaye (Immerse VC), Biola Alabi (Delta 40/angel syndicates), and Alexandre Lazarow (Fluent Ventures). The importance of local capital and local knowledge When Uganda-based Benue Capital invited dozens of Kampala high-net-worth individuals (HNWIs) to a closed-door summit, Ntambi’s team started with a blunt provocation: “Every missed Series A is someone else’s yield farm.” She then pulled up a simple bar chart showing how a $100k cheque into Ugandan startups could already be worth 10× after a couple of years. “True ecosystem ownership starts with local investment,” she told TechCabal. Ntambi’s larger thesis is that local capital is not charity but risk arbitrage. A Kampala landlord most likely has information about land registries, boda traffic patterns, and parish-level politics that a Palo Alto associate might never acquire quickly enough to price. That knowledge compresses uncertainty, and local investors, if properly organised, can buy the same venture upside at a meaningful discount because they can diligence faster and support better. Peyriere echoed the point from an operator’s chair. After 14 years writing cheques across Africa and Asia as an angel investor, he backs only sectors he has operated in: mobility and marketplaces. His wins—Julaya, Termii, Grey—grew out of pain points he has lived through. “The best solutions are built ground up for local realities,” he said. By staying in sectors he’s familiar with, he avoids the tourist trap Lazarow warns about: importing a Valley checklist into markets that do not care about Valley heuristics. For Immerse VC’s Durojaye, local domain mastery is his first filter; it let him spot Shuttlers and OnePort early and walk away from financial-inclusion pitches that made people download apps. “If I know more about your industry than you do, I’m out.” Biola Alabi’s journey underscores the same psychology. Her first cheque—into Big Cabal Media—was tiny by today’s standards, but it snowballed because she paired cash with crisis-time mentorship. Local insight as a competitive moat Each investor gave a case where local context, not capital, was decisive. Durojaye only invested in Shuttlers because he had spent years in yellow buses and BRT queues. When a structured commuter-bus platform was pitched, he instantly saw the market others dismissed. Lazarow, on the other hand, recognised OffBusiness’s Indian model but only funded Matta after its founders proved they could underwrite credit in naira without bureau data, something a Brazilian or US team could not replicate. Designing exits in a market short on IPOs Every investor acknowledged an uncomfortable fact: Africa still lacks deep public-market or private equity demand for $200 million tech companies. They offered three ways to generate returns, like secondaries, exit-first deal design, and valuation discipline. Peyriere, Durojaye, and Alabi have each sold portions or all of their positions, sometimes grudgingly, when later-stage investors wanted cleaner caps or when they wanted to exit from their investment. These partial exits returned capital to LPs and angels without strangling upside. Their rules of thumb: if a secondary offers 5–10X on an early cheque, take at least some chips off; bake secondaries into term sheets: 10–15% of any Series B or C can be allocated to liquidity for earlier holders; keep founders above a threshold stake post-secondary. Lazarow will not enter a deal unless at least one of three paths feels realistic today: a strategic acquirer list with precedent multiples, local or regional private equity buyout appetite, or an active secondary market with discount parameters understood. Ntambi pushes founders to prepare governance artefacts—data room hygiene, board minutes, clean option pools—from the seed round. “Exit blockers seed themselves at incorporation,” she warned. Durojaye’s harshest critique: funds marking companies at $100 million at Series A in markets where banks or telcos rarely pay over $40 million. The inevitable down-round kills morale and dilutes everyone. What value-add looks like when cash is only 50% of the need Across all five conversations, value-add meant time-consuming, sleeves-rolled work: cap table surgery, hiring CFOs, co-founder matchmaking, and regulatory hand-holding. This is what often separates a good investor from a great investor. At Benue Capital, the value-add is geared towards local investors as the firm walks HNWIs through real exit case studies like Asaak and SafeBoda and offers co-investment vehicles so first-timers learn without too much risk. Peyriere, on the other hand, has an operator hotline for his portfolio startups where he offers advice, brokers warm intros to Series A investors, and pressure-tests founders’ market strategy using his AUTO24 playbook. Alabi operates as a crisis manager and syndicate shepherd. She helped engineer Big Cabal Media’s CEO transition, and in other deals, she structures paperwork, mediates disputes, and once even helped an angel liquidate their investment to handle mid-life emergencies. The common thread across these six stories is that investors insist that Africa’s biggest competitive advantage is context-specific execution. “If we want startups solving problems that matter to African communities, we need African investors at the table,” Ntambi said. Local money brings patience and accountability, local knowledge turns global playbooks into profit, and locally engineered exits recycle cash back into the next cohort of startups.
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What MTN’s first ₦1 trillion quarter says about the future of Nigerian telcos
This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, telcos, and financial institutions. A new edition drops every Monday. In the first quarter of 2025, MTN Nigeria made more money than any telecommunication company has ever made in a single quarter on the Nigerian Exchange Limited (NGX). The record performance was not by accident but as a result of rising data demand, strategic fintech expansion, tariff hikes, and sustained investment in infrastructure, according to MTN’s latest earnings report. As the broader telecom industry grapples with slowing momentum—GDP growth fell to 6.25% in 2024, the lowest in at least six years—such gains could offer a much-needed boost to the sector’s growth in Q1. MTN’s total revenue—which includes income from services as well as non-service items like SIM cards and device sales—jumped by 40.5% year-on-year, reaching ₦1.06 trillion ($658.4 million) in Q1 2025, up from ₦752.9 billion ($467.7 million) in the same period last year. Compared to Q4 2024, MTN’s total revenue grew by 6.8% from ₦990.6 billion ($615.3 million). In February 2025, the Nigerian Communications Commission (NCC) approved a proposal to raise tariffs on voice and data services after a decade, a move it justified as necessary to offset foreign exchange losses and inflationary pressure. MTN attributed the increase to its ability to sustain investments, with ₦202.4 billion ($125.7 million) spent on capital expenditure in Q1, up 159% year-on-year. “The tariff empowered us to accelerate network investments, boost capacity, and improve user experience,” Karl Toriola, MTN Nigeria CEO, said in its earnings report. Data remains MTN’s most bankable product MTN’s total revenue from data services rose by 51.5% year-on-year to ₦529.4 billion ($328.8 million), driven by a 46.4% surge in data traffic and the addition of 2.6 million new active data users in Q1. MTN now serves 50.3 million data subscribers, out of a total of 84.1 million. The company’s data revenue is higher than Airtel Africa’s revenue of $139 million for the same period. Data usage per subscriber jumped by 29.5% to 12.8 gigabytes (GB), even with higher tariffs. NCC data revealed that national data spending surged to ₦585.08 billion ($363.4 million) in March 2025, nearly double the ₦287.77 billion ($178.2 million) recorded in January. “Approximately 4.0 million smartphones were added to the network during the quarter, raising smartphone penetration to 60.7%,” Toriola added, attributing the growth to rising demand for high-speed mobile internet. According to the GSMA, a non-profit trade association that represents the interests of mobile network operators worldwide, 58 million Nigerians are active internet users, with 85% using mobile internet for video calls, 75% for free online video streaming, and 54% for free music streaming. MTN also continues to build enterprise services for corporate clients, offering broadband (FibreX), mobile engagement suites, bulk SMS, cloud services, and IoT connectivity, ensuring that wholesale contracts remain a stable revenue stream. MTN’s primary revenue source is not retail consumers but rather wholesale agreements with large companies, says a Lagos-based analyst at a major investment firm who asked not to be named to speak freely. “These big companies generate significant income for MTN through their high data consumption. Therefore, even if retail consumer spending decreases, MTN’s total revenue remains stable due to its reliance on these major corporate clients,’ he said. Fintech: Fewer users, more value MTN’s fintech play, often overshadowed by its core telco business, is beginning to pull more weight. Revenue from its financial services arm rose by 57.9% to ₦36.1 billion ($22.4 million) in Q1, largely due to growth in airtime lending (Xtratime) and increased float income. However, the number of active wallets declined by 25.7% to 2.1 million. MTN explained that this drop was strategic; it focused on acquiring high-value users who contribute more significantly to float balances and transaction volumes. “Since Q3 2024, we revamped our customer acquisition strategy, optimising incentives and engagement, resulting in stronger qualitative performance and deeper service penetration,” the company noted. Rising operating expenses Operational discipline helped MTN sustain profitability despite Nigeria’s tough macroeconomic environment. After taking a major forex hit in 2024, MTN returned to profit in Q1 2025 for the third straight quarter. Operating expenses grew modestly by 4.2% to ₦408.7 billion ($253.8 million), much lower than the 25% increase recorded in Q1 last year. Key drivers included renegotiated tower leases—especially with IHS Towers—and ongoing cost-efficiency initiatives. “Cost efficiency supported the containment of overall operating cost growth,” MTN stated in its earnings report. Gains for MTN but woes for consumers The 50% tariff hike means increased monthly spending for cash-strapped consumers. In an economy grappling with double-digit inflation, higher connectivity costs are biting into household budgets. According to the National Bureau of Statistics, headline inflation in Nigeria rose for the first time this year to 24.2% in March. Mobile and internet access are now essential services, making their cost a significant aspect of the cost of living. Although Nigeria meets the United Nations’ affordability standard (1GB of data costing no more than 2% of average monthly income), the total spending on internet services is still a burden for many Nigerians. Research by Utility Bidder, a United Kingdom-based business energy consultancy, shows that Nigerian households spend over 67.7% of their monthly income on utilities, comprising water, gas, electricity, broadband, and mobile data. “Data costs have significantly increased, nearly doubling my expenses. This data also depletes quickly,” Peace Michael, a Lagos-based freelance journalist, told TechCabal over a phone call. Before the tariff increase, she would buy 75GB for one month at ₦18,000 ($11.2) from a 15GB plan, which was ₦6,000 – ₦7,000 ($3.74 – $4.37) To manage this, Michael had to remove some social media apps like Facebook and TikTok from my phone. “It’s frustrating to deal with poor network service alongside rising tariffs,” she added. Another MTN user, Femi, who asked only for his first name to be used, said he typically purchases around 75GB of data, twice a month, due to heavy usage. However, sometimes he buys it only once
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