NITDA: Traditional regulations can no longer guarantee Nigeria’s financial stability

Nigeria’s financial stability can no longer be guaranteed through traditional regulatory approaches, and its ability to maintain the stability and integrity of the financial system increasingly depends on sovereignty over the digital infrastructure that powers it.

The Director-General of the National Information Technology Development Agency, Kashifu Inuwa, made the warning on Thursday in Lagos at the 15th Retreat of the Central Bank of Nigeria’s Committee of Departmental Directors.

He told regulators they must move beyond monitoring individual financial institutions to overseeing the entire digital ecosystem, including telecoms networks, cloud platforms, fintechs, and data systems that modern banking now depends on.

He said Nigeria’s rapid expansion of electronic payments, which hit approximately N1.07 quadrillion in 2024, had created a financial system that extended far beyond the direct reach of traditional supervisory models, making real-time visibility across the ecosystem an urgent necessity.

What they are saying

Inuwa said financial stability and digital stability are now inseparable, and that regulators must get ahead of the institutions they oversee rather than waiting for periodic returns to understand what is happening.

• “To achieve financial stability, we need digital stability. Without digital stability, today we cannot be talking about financial stability in the financial sector,” he said.
• “We cannot wait for regulated institutions to submit returns before we analyse and understand what is happening. We need end-to-end visibility of the ecosystem,” he added.

On digital sovereignty, Inuwa made a strong argument, linking Nigeria’s financial system security directly to control over the infrastructure that runs it.

• “Financial stability now depends on resilient technology and Nigeria’s capacity for digital self-determination. If we do not build, control and maintain sovereignty over critical digital infrastructure, how can we guarantee the stability and integrity of our financial system?” he said.
• “The future of supervision is not merely to digitise regulation, but to digitally transform how regulators sense, understand and respond to risks across the ecosystem,” he added.

CBN Governor Olayemi Cardoso, addressing participants virtually, said the bank is in a strong position following its ongoing reforms and urged staff to see institutionalisation as protection rather than a threat.

• “The Bank is in a good place. Our staff have nothing to fear. Reform and institutionalisation are not a threat to the career officer; they are the protection of the career officer,” he said.

CBN Committee of Departmental Directors Chairman Jimoh Musa Itoba described the retreat as more than an annual engagement, charging directors to take greater ownership of financial stability and Nigeria’s economic growth ambitions.

• “The directors are the major anchors of the Bank,” he said, urging participants to challenge existing narratives and generate practical solutions that management could implement.
• “Let us be committed, let us get engaged, and make sure that at the end of this retreat, we are not only questioning what we do today but also providing solutions that management can implement,” he added.

Get up to speed

Nigeria’s financial system has become increasingly dependent on the digital infrastructure that powers banking and payments, and regulators have begun responding to risks beyond traditional financial supervision.

• In July, Nairametrics reported that Inuwa had warned that the future of Nigerian banking would depend increasingly on AI, RegTech and cyber resilience, with digital trust becoming critical to the sector’s growth.

That concern is also shaping how financial data is handled.

• In June, the CBN’s data localisation policy required banks, payment service providers and fintechs to localise customer and transaction data within Nigeria by January 2027, creating fresh demand for local data-centre capacity and putting greater emphasis on where critical financial data is stored.

The question of control over Nigeria’s digital infrastructure has since moved further up the agenda.

• Nairametrics reported earlier this month that NITDA had signed regulatory instruments under the National Sovereign Cloud Initiative, designed to establish a trusted cloud ecosystem and strengthen Nigeria’s digital infrastructure.

That initiative moved into another phase this week, with NITDA and the Budget Office inaugurating a Joint Technical Committee to develop the fiscal, procurement, financing and investment structures needed to implement the sovereign cloud policy.

What you should know

NITDA has also called for greater coordination among 15 ministries, departments and agencies (MDAs) to fully implement the incentives provided under the Nigeria Startup Act (NSA).

The agency made the call at the NSA Incentives Activation Co-Creation Session in Abuja.

NITDA said effective implementation of the legislation would require government institutions across different sectors to work together to ensure startups and investors can access the incentives and other benefits provided under the law, which was signed four years ago.