In the last decade, Nigeria has become a fintech powerhouse in sub-Saharan Africa. The fintech scene has produced two unicorns — Flutterwave and Interswitch — and several high-profile international acquisitions and partnerships with venture capital funding, including Paystack, OPay, and Kuda. Between 2014 and 2019, Nigeria’s fintech companies raised more than $600 million in funding, and $439 million in 2020.
Ironically, this growth has highlighted a gap within the ecosystem: talent. A recent Ernst & Young report on the state of fintech in Nigeria highlights that “the quality and volume of fintech talent in Nigeria is limited and insufficient.” Nigerian fintech organizations have had trouble attracting and retaining employees. Workers who are proficient in data analytics, cybersecurity, and software engineering are difficult to find. This talent gap presents barriers to growth.
Nigerian fintech founders and investors have been weathering this problem for many years. Victor Asemota, co-founder of MFiSA, an African mobile financial services accelerator, wrote in a tweet earlier this year that the biggest challenge startups in Africa face is talent. “Many are feeling the pains already. The biggest threat to talent availability is migration,” he wrote. Jessica Akano, recruiting manager at Andela, a software engineering outsourcing startup in Lagos, told TechCabal in 2019 that one of the major challenges of her role has been hiring talent, given pay competition and the many opportunities for software engineers at home and abroad. “There’s always another company willing to pay more or do more.”
Being a nascent industry, the competition for fintech talent is high because the talent pool is limited. While this gap is not new, over the last four years, it’s been exacerbated by several factors, including a fintech boom that increased the emigration of young Nigerians to Canada and Europe and a broken education system with outdated computer science curricula and inadequate teaching tools.
Also, Nigeria’s rising inflation and continual devaluation of the naira against the U.S. dollar has spurred local talent to seek foreign employers in order to earn in U.S. dollars as a hedge against inflation and devaluation. The pandemic further opened up international remote working opportunities to Nigerians.
Fintech founders and employers have resorted to providing hands-on training programs for new employees, hiring from outside of Nigeria, and hiring foreign-educated Nigerians. While some large and well-funded fintech companies, like Paystack, are able to successfully explore these options, smaller companies with lean budgets cannot afford to hire and train fresh graduates — or even to hire international candidates or returning Nigerians who studied abroad. Unless this gap is filled, smaller fintech companies will remain at a disadvantage. The last thing a budding ecosystem needs is an uneven playing field where smaller companies are unable to compete for talent.
Several local entrepreneurs have stepped up to tackle the talent crisis. Perhaps the most successful to date is the HNG Internship, a three-month remote internship designed to find, develop, and place the most talented software developers in Africa. The program is run by Hotels.ng founder Mark Essien and started out as an internal company project to build a pipeline of coders and designers for his hotel booking startup. Today, the HNG Internship draws nationwide and regional applications. Participants are incentivized with weekly stipends. Those who successfully complete the program are placed at local and international technology companies, including leading fintechs like Paga and Flutterwave. In 2020, the internship had 13,000 applicants and 40 mentors.
Another example, albeit on a smaller scale, is the Lambda School Africa Pilot. Several Nigerian fintechs — including Paystack, Buycoins, and Wallets Africa — partnered with the San Francisco-based Lambda School to sponsor Nigerian applicants for a free nine-month full stack developer education.
Software developer communities like ForLoop Africa and Data Science Nigeria host frequent masterclasses on machine learning and front-end development, and run vibrant online and offline communities to groom young programmers and attract new interest from students in tertiary institutions. However, these communities are in their early stages and most of their activities are currently limited to the city of Lagos.
We are at the beginning of government partnerships with local training providers to drive scale at the sub-national level. In southern Nigeria, the Akwa Ibom state government signed a memorandum of understanding with HNG Internship in 2017 to provide a remote internship for its residents and promote local tech talent and employability. In December 2020, the Edo state government partnered with Decagon, a software engineering training institute, to produce 15,000 developers in five years.
In order to solve the tech talent gap, other state governments in Nigeria need to follow suit. Aside from alleviating the squeeze on the local talent pool, tech training presents an opportunity to close the local employment gap on a larger scale, as one in three Nigerian adults are unemployed. The Nigerian government also has an opportunity to future-proof and increase the marketability of its growing youth population, as technology design and programming are among the top job skills of the future.
Closing the tech talent gap in Nigeria will also require longer-term solutions. Exposing Nigerian students at the primary, secondary, and tertiary levels to STEM-related concepts, projects, and internships in fintech companies will only enhance tech-based entrepreneurship to address Africa’s unique challenges.
The exponential growth of Nigeria’s fintech industry is expected to continue over the next decade. Fintech companies are meeting an unmet demand; almost 50% of the adult population in Nigeria is financially excluded, meaning that these consumers have no access to banking services. Smartphone and internet access continue to increase, providing bullish signals for investors and entrepreneurs.
Seizing this opportunity, however, is only possible with a commensurately skilled talent base.