When a scarcity of hard cash worsened an already tough economic situation in Nigeria in 2023, an unprecedented development occurred: e-payments soared and became the new norm in the country. Several companies tapped into this ecosystem, a move that made them some of Africa’s fastest growing firms, according to a report from the Financial Times.
In early 2023, when Nigeria began rolling out its newly designed currency notes, the country was hit by a cash crisis.
The reason? Nigeria’s apex Bank had put a cap on the maximum amount of hard cash that individuals and corporations could withdraw as part of wider efforts to tame money laundering.
While this scarcity of hard cash worsened Nigeria’s tough economic situation, an unprecedented development occurred: e-payments soared and became the new norm in the country.
In turn, Nigerian companies that rode on this development to help fix the flow of money in the country – by leveraging digital technologies to digitise their key stakeholders across the value chain – began winning big, with significant revenue growth to emerge among Africa’s fastest-growing firms.
The West African economy ranks second overall with 25 companies after South Africa (42) in this year’s Financial Times’ annual Africa’s Fastest Growing Companies rankings. Nigeria produced the continent’s top-ranked country in the index and three – OmniRetail, Moniepoint and AFEX – in the top ten.
OmniRetail was Africa’s fastest-growing company in 2024. The company is an e-commerce platform that digitises the supply chain from distributors to retailers by embracing a retailer-first, asset-light approach. It saw its compound annual growth rate (CAGR) in revenue rise by 772.39% between 2019 and 2022.
“We will continue to improve infrastructure for efficient product distribution, envisioning more product variety and efficient distribution to even more remote areas. As a company, we are on a journey to eliminate the inefficiencies of traditional trade by digitising the key stakeholders across the value chain” said OmniRetail CEO Deepankar Rustagi.
According to the Nigeria Inter-Bank Settlement System (NIBSS) Nigeria’s Electronic payments surged to US$413.87 billion in 2023, growing by more than 50% compared to 2022.
According to the data, there has been a significant increase in the total value of point-of-sale (PoS) transactions, amounting to US$7.4 billion (N10.73 trillion) in 2023, a 27.85% increase from the US$5.78 billion (8.39 trillion naira) recorded in 2022.
Since 2019 when it started operations, OmniRetail has onboarded over 140,000 small retailers and listed more than 200 brands on its platform.
For the second year running, Moniepoint was listed as Africa’s fastest growing fintech by both the Financial Times and Statista. The payment startup finished fourth on the Financial Times’ global list, with its revenue growing by 332.3% to US$149 million.
According to a statement on its website, Moniepoint said its efforts have helped to close Nigeria’s financial inclusion gap citing number of Nigerians – mostly businesses in the informal sector – who did not have access to formal banking services has dropped from about 51% in 2018 to 36% in 2023.
“More people have accounts because we’ve been able to leverage our strong distribution network. People no longer have to go to banking halls, the banking halls are going to them,” said Moniepoint.
As of February 22, 2023, the company said it had activated a new payment terminal every 30 seconds in Nigeria and introduced web payments with the introduction of virtual accounts. By the close of 2023, the company reported disbursing over US$70 million in loans to thousands of small businesses.
In February 2024, Moniepoint partnered with Nigeria’s Corporate Affairs Commission (CAC) to digitize and formalize operations for over 2 million small and medium businesses across Nigeria.
“Our recent partnership with the CAC, for example, will ensure that 30 million businesses will become formalised in the next five years, giving them access to a full range of financial services and government assistance,” said Moniepoint.
Commodities brokerage firm, Africa Exchange finished fifth-best with revenues of US$415 million with a growth rate of 287.82%. The all-inclusive online trading platform has a presence in 7 countries including the home country Nigeria, Kenya, Uganda and Coted’Ivoire, Dubai, USA, and the Netherlands.
Kenya tied in third position with a big newcomer, Morocco, with 12 fastest-growing companies each in the top 125 list. Morocco had just three last year.
International Monetary Fund has forecast Nigeria’s GDP to drop to US$253 billion in 2024 relegating the country to fourth-largest economy – citing the depreciation of the Naira as the main reason behind the economy’s current decline.
South Africa is poised to be Africa’s largest economy with a GDP of US$373 billion, followed by Egypt with US$348 billion, and Algeria with US$267 billion.
Nigeria had maintained its title as “Africa’s largest economy,” for a decade with a total GDP of US$477 billion following rebasing in 2013.