Over the years, the facilitation of digital trade and the expansion of e-commerce have remained huge hurdles to the successful realization of the African Continental Free Trade Area (AfCFTA), the world’s largest trade agreement. As Africa’s largest economy, Nigeria has a unique opportunity to leverage the benefits of AfCFTA by investing in its digital economy and overcoming these challenges.
In its 2025 Economic Report on Africa (ERA), the Economic Commission for Africa (ECA) stressed that the successful implementation of the AfCFTA agreement requires comprehensive reforms at all levels. As part of these measures, the ECA urged governments to integrate digital technologies such as blockchain and electronic data processing to reduce trade costs and improve efficiency. Also, the commission underscored the necessity of substantial investment in digital infrastructure, including broadband networks, data centers, and internet exchange points.
Fortunately, Nigeria already has a strong foundation to expand its digital economy and enhance e-commerce transactions within the country and beyond. In March 2025, Visa, a global payment services leader, announced plans to establish a data center infrastructure in Nigeria. According to the company, this initiative aims to introduce new technologies to the Nigerian market, reinforcing the country’s growing digital economy.
Data centers are vital for modern businesses and governments, ensuring secure and reliable digital data storage, processing, and management. Although Nigeria currently has 16 data centers, industry experts argue this number is insufficient, with an estimated sector gap of at least $600 million. Expanding these facilities would localize more content from global tech giants like Meta and Google, reducing reliance on international networks and enhancing resilience against disruptions, such as the early 2024 undersea cable failures that severely impacted Internet connectivity across Nigeria and several West African nations.
Visa’s investment highlights the broader efforts to strengthen Nigeria’s digital ecosystem. “This is in addition to its investments of over $1 billion in the country, including a substantial technological partnership with @moniepoint to foster digital payment solutions, a $200 million investment in Interswitch, and a partnership with @thriveagric to empower smallholder farmers and enhance food security in Nigeria,” Visa said.
The Power of Fintech
Supporting fintech startups that facilitate cross-border transactions and establishing a unified digital payment system, such as the Pan-African Payment and Settlement System (PAPSS), would position Nigeria at the forefront of AfCFTA’s vision.
With over 200 fintech companies, Nigeria’s financial technology sector has become a driving force for economic growth. These companies provide essential services such as quick loans, flexible savings options, seamless payments, and e-commerce solutions. The industry has witnessed significant growth, generating $293.2 million in the first quarter of 2021— a significant rise from $178.3 million in 2018 and $153.1 million in 2017.
Nigeria’s financial inclusion and digital economy have also experienced significant progress. The country recorded 3.7 billion real-time transactions in 2021, ranking as the world’s sixth most developed real-time payment market. Data from the Nigeria Inter-Bank Settlement System (NIBSS) further highlights this expansion, with electronic payment transactions reaching N234.4 trillion in the first quarter of 2024, indicating a strong shift toward a cashless economy.
According to the Central Bank of Nigeria, cashless transactions increased to over N600 trillion by the end of 2023, up from N395.38 trillion in 2022. This growth has positioned Nigeria as the fourth-ranked economy globally in maximizing the benefits of real-time payments. Projections suggest that real-time transactions could reach 8.8 billion by 2026, potentially generating $6 billion in economic output and contributing an additional one percent to the country’s Gross Domestic Product (GDP).
Investing in its digital economy will enhance Nigeria’s competitiveness, attract foreign investment, and create jobs, ensuring it becomes a leader in AfCFTA’s digital trade expansion. Strengthening payment platforms will also facilitate seamless intra-African trade and financial inclusion.
The Nigeria Digital Economy Diagnostic has further stressed the importance of investing in digital transformation. By improving digital connectivity, fostering digital skills, and expanding digital financial services, Nigeria can unlock new economic opportunities, generate employment, and improve livelihoods.
“As the biggest economy in Africa with one of the largest populations of young people in the world, Nigeria is well-positioned to develop a strong digital economy, which would have a transformational impact on the country,” the report reads in part. “Through innovations and investments, the Nigerian economy can harness digital data and new technologies, generate new content, link individuals with markets and government services, and roll out new, sustainable business models.”
The report also noted the vibrant digital entrepreneurship ecosystem in Lagos and Abuja, supported by incubators, venture capital firms, and digital startups. However, challenges such as a difficult business environment, lack of early-stage financing, and limited market opportunities beyond these cities must be addressed to ensure broader growth.
Digital transformation is the driver of growth and innovation in the 21st century, according to Pichai, CEO of Google. “Countries that embrace these technologies will lead the future.”
As Nigeria grapples with rising unemployment, experts believe digital transformation is a beacon of hope, providing pathways for job creation and skill development essential for driving economic growth and national stability.
Shereefdeen Ahmad is a journalist and Free Trade Fellow at Ominira Initiative
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