E-Financial
MasterCard Says Nigeria, 3 Others on Digital Evolution Threshold
A new Digital Evolution Index from MasterCard shows that South Africa, Egypt, Kenya and Nigeria are quickly moving towards digital evolution.
However, South Africa’s digital economy is the most developed in Africa, and one of the fastest growing in the world, according to the new Digital Evolution Index developed by MasterCard and The Fletcher School at Tufts University that tracks a country’s movement toward digital evolution, gauges progress and assesses challenges in 50 countries comprising the Index.
South Africa ranks 33 out of the countries measured by the index in digital readiness, which is defined by the markets’ ability to support and encourage digital commerce and payments. In Africa, it ranks ahead of Egypt (48), Kenya (49), and Nigeria (50).
South Africa also emerged as the fourth fastest growing digital economy behind China, Malaysia and Thailand.
“South Africa’s speed of growth can be attributed to the rapidly increasing proportion of the population with Internet access, an 86 percent adult mobile phone penetration rate, and a highly developed telecommunications network. However, what is significant is that all four of the African countries measured share a common trait of moving at a high rate of speed toward digital evolution, demonstrating huge growth potential for e-commerce,” said Ted Iacobuzio, Vice president, Global Insights, MasterCard.
The Index analyses four key underlying drivers and barriers that govern a country’s evolution into a digital economy, Demand (consumer demographics, income and internet access); Supply (technology and infrastructure); Institutional Environment (governmental policy), and Innovation (environment for creating startups and the overall competitive landscape).
Each country is given an overall digital readiness score between 0 (low digital readiness) and 100 (digitally saturated), which is derived from an average score of these four interdependent drivers.
The index also provides an indication, by country, where the next billion Internet users will come from globally.
According to McKinsey, Africa’s Internet penetration stood at 16 percent (167 million people) in 2013, and is forecasted to reach 50 percent (600 million people) by 2025, indicating the online consumer market will quadruple over this time.
“There are currently 2.9 billion Internet users in the world, a feat that took over 20 years to achieve. The next billion users will enter the market much faster than this. A significant proportion of these will come from Africa, where the four countries studied – Egypt, Kenya, South Africa and Nigeria – all represent exceptional growth potential coupled with short-term opportunity,” said Iacobuzio.
The study analysed each market’s evolution from 2008 to 2013 and grouped each country into one of four trajectory zones:
‘Stand Out’ countries have historically moved at a high rate of digital readiness and maintain high levels of digital transactions;
‘Break Out’ countries are typically developing countries that currently have low readiness scores, but are rapidly evolving;
‘Watch Out’ countries face various challenges, but have significant opportunities for investment; and
‘Stall Out’ countries, while possessing a history of strong growth, are highly evolved and offer little potential for change.
The Index positions South Africa as a ‘Break Out’ country with an overall score of 30 out of 100 in 2013. Its score jumped from 24 to 34 between 2008 and 2012, a substantial increase compared to other countries.
While infrastructure investments in South Africa will drive e-commerce to achieve a likely 30 percent growth rate in 2014, the Index indicates that demand for e-commerce currently lags the global average.
“South Africa may have a relatively average Index score overall, but its digital landscape is evolving rapidly. If this evolution continues at its current rate, South Africa has the potential to grow into a strong digital economy. It is a prime candidate for becoming a ‘Stand Out’ nation in the future,” he says.
The three other African countries ranked in the index are classified as “Watch Out” countries. Egypt scored 17.3, Kenya scored 16.9 and Nigeria scored 13.7 out of 100. These countries are just starting out on their journeys towards digital readiness, each facing different challenges.
“Encouragingly, Egypt, Kenya and Nigeria fared well in their speed of digital growth. This points to their potential to develop into evolved digital economies that further encourage digital payments, and enable future e-commerce opportunities,” he said.
Key African Insights:
Egypt’s Innovation score of 29.5 and its Demand and Supply drivers both above 15 helped place it second in the African rankings.
According to the Index, Egypt has the potential to be one of the top 10 fastest evolving countries globally in the next five years.
Mobile payments are in place for an impressive run due to the the first ever interoperable Arabic mobile money implementation in Egypt. While the e-commerce penetration rate among Egyptians is still low at 3.4 percent, Egypt’s online purchases are expected to triple by 2016, according to Euromonitor.
Kenya’s Innovation score of 32.9 was its highest driver score followed by its Institution score of 14.
This is due to a combination of factors including the country’s mobile payment capabilities, led by the M-Pesa platform, which shows an evolved mobile market where 25 percent of Kenya’s GDP travels through M-Pesa.
In 2013, Kenya’s mobile penetration rate was 72.5 percent growing by 5.6 percent to 32.3 million subscribers during the second quarter of 2014. Kenya faces challenges with its Supply and Demand drivers, which if focussed on over time will lead to an improved overall Index score.
Nigeria’s Innovation and Institution drivers fared relatively well largely owing to the Central Bank of Nigeria’s Cashless Policy that is expected to drive growth in electronic payments and e-commerce, the country’s increasingly urban population that will have better access to the Internet over the coming years, and the fact that Nigeria has 94 percent mobile penetration.
Its Supply and Demand drivers have much potential for improvement, with scores of 6.8 and 7.3 respectively, pointing to a need for improved technology and infrastructure.
However, Nigeria showed the greatest potential for digital growth.
Globally, Singapore, Sweden and Hong Kong are the top three countries on the Index with the most active and advanced digital economies with scores of 56, 55 and 53.5 respectively.
The United Kingdom and Switzerland round out the top five, while the United States ranks sixth among the 50 countries measured.
The Digital Evolution Index is an output of the study conducted by researchers at The Fletcher School with the support of MasterCard.
Analyzing datasets from public sources, such as The World Bank, and private sources such as EMPEA and Dow Jones VentureSource, the research team created an analytical framework for recognizing patterns and making sense of the global digital landscape, discerning country trends and evaluating their relative strengths and weaknesses.
The methodology for the Digital Evolution Index measures the current ability of countries to deliver on consumer demand and business supply capabilities, in combination with governmental policy and climate for innovation – four drivers defining digital readiness that were identified in the research hypothesis.
In addition to the current state, the study measured each country’s trajectory across the four drivers from 2008 through 2013.
The index then layers a quadrant matrix to visualize the trajectory of a particular country.
Nigerians have lost N4.8 trillion ($2.99 billion) to various scams since 2016, according to findings by Paul Alaje, a prominent Nigerian economist and chief economist at SPM Professionals.
This is coming on the heels of the recent crash of Crypto Bridge Exchange (CBEX), a digital asset company, where over 600,000 investors lost N1.3 trillion.
With the collapse of CBEX, Alaje said that accounting for the depreciation of the naira, the actual figure is close to N8 trillion ($5 billion) since 2016.
CBEX, like all Ponzis and scams, was an investment fraud that pays existing investors with funds collected from new investors.
CBEX lured investors with promises of a 100% return on investment after 30 days.
Consistent with other scams, the early investors received the promised returns, attracting thousands more into what they thought was a legitimate platform.
Following the platform’s collapse, the Economic and Financial Crimes Commission (EFCC) has arrested two suspects believed to be among the operators.
A source from the economic crimes watchdog told a local outlet that five others, including two Nigerian siblings and a British citizen, are under probe for their involvement.
The EFCC is investigating who funded the firm, how it managed to evade regulatory scrutiny, and its legacy financial partners.
Emomotimi Agama, director general, Securities and Exchange Commission (SEC) said that CBEX wasn’t registered, limiting the agency’s ability to crack down on the company.
“The first responsibility of the SEC is to watch over regulated institutions within the confines of its available resources. Registration actually is the hallmark of regulation. Without registration, the possibility of regulation becomes difficult,”.
Agama further noted that no member of the public had made any reports regarding CBEX before it blew up, despite the company operating for nine months.
Nigeria’s banking sector, in 2024, thrived in a stormy economic climate, capitalising on market volatility to deliver record profits.
According to The Sun, nine of the country’s listed banking giants—Access Holdings, FCMB, Fidelity, First Bank Holdco, GTCO, Stanbic IBTC, UBA, Wema Bank, and Zenith—posted a combined profit after tax (PAT) of N4.786 trillion, a clear 53.3 per cent increase from the N3.121 trillion recorded in 2023.
Yet, beyond the glittering headline figures lies a deeper story, one told not just by earnings reports, but by the banks’ Value-Added Statements (VAS).
Often overlooked, this financial segment unpacks how the wealth created by each institution was distributed among key stakeholders: governments, employees, shareholders, and capital providers.
In 2024, total value added across these top banks surged to N8.871 trillion, a 66.3 per cent rise from N5.335 trillion the year before.
But what’s striking is who took the biggest slice of this financial pie.
The Nigerian government emerged as the single largest external beneficiary, surpassing shareholders by a significant margin.
A closer look reveals that tax collections from these banks totaled N1.166 trillion, marking a dramatic 111.4 per cent increase from the previous year.
Shareholders, by contrast, received N951.4 billion in dividends—an 87 per cent rise, but still over N200 billion less than what the government took home.
Zenith Bank led the profitability race, reporting a PAT of N1.032 trillion and generating N1.583 trillion in value added.
The government received N294 billion from the bank in taxes—the highest across the industry—while shareholders earned N196.7 billion.
A hefty N1.085 trillion was retained for reserves and future investments.
GTCO followed closely with a PAT of N1.018 trillion and N1.410 trillion in value added.
Taxes to government soared to N248.4 billion—a staggering 257 per cent year-on-year increase—while dividends to shareholders stood at N236.3 billion, slightly trailing government collections.
Access Holdings posted the highest total value added—N1.622 trillion—with a PAT of N642.2 billion.
From this, the government claimed N224.8 billion (14 per cent of value added), while N125.3 billion went to shareholders.
First Bank Holdco recorded a value added of N1.593 trillion and PAT of N663.5 billion, with N132.9 billion in taxes paid.
Yet shareholders received just N25.1 billion, highlighting a sharp imbalance in wealth distribution.
Fidelity Bank’s PAT rose 179 per cent to N278.1 billion, with value added hitting N508.7 billion.
Government collections surged to N95.5 billion, dwarfing shareholder payouts.
Stanbic IBTC reported N408.6 billion in value added. Interestingly, employees received the largest share—N86.7 billion—outpacing both the government (N78.5 billion) and shareholders (N64.8 billion).
FCMB faced a 21 per cent dip in PAT to N73.3 billion, but still increased its value added by 24 per cent to N205.1 billion. Government received N38.6 billion, nearly double what shareholders earned (N21.8 billion).
UBA, with a PAT of N766.6 billion, generated N1.384 trillion in value added.
However, 75 per cent of this was retained for business growth and expansion.
Wema Bank, one of the year’s breakout performers, recorded a PAT of N86.3 billion, up nearly 140 per cent, and created N156.7 billion in value added.
In a rare deviation from the trend, shareholders received N21.4 billion, exceeding the N16.2 billion paid in taxes, placing Wema among the few banks where equity investors earned more than the state.
While Nigerian banks returned record profits in 2024 and shareholders saw strong dividend growth, it was the government that emerged the biggest financial winner, receiving a massive N1.166 trillion—over N200 billion more than total shareholder dividends. The figures underscore a significant shift in wealth distribution from capital investors to the public treasury, raising important questions about how value is shared in Nigeria’s evolving financial ecosystem.
Mr. Samuel Agbeluyi, the President of the Chartered Institute of Taxation of Nigeria, has charged incoming tax professionals to see their roles as critical to shaping Nigeria’s fiscal policies and building a more efficient tax system.
Agbeluyi gave the charge on Tuesday at the opening of the April 2025 Pre-Induction Orientation Programme held in Abuja.
While addressing participants, the CITN President said the orientation marked not just a personal achievement for inductees but the beginning of a greater national responsibility.
According to him, “Ultimately, it is expected that at the end of this programme and the induction thereafter, the number of tax professionals in the roll call of the CITN and indeed Nigeria would grow.
“Most importantly, more professionals would be added to the struggle of building an efficient and effective tax system in Nigeria, whilst influencing government fiscal policies and adding immense value to various stakeholders.”
Agbeluyi stated that the institute’s charter empowers it to determine the standard of knowledge and skills required to become a professional in the field, adding that the training was a deliberate step towards producing competent tax administrators capable of delivering value in the Nigerian economy.
He also noted that facilitators had been carefully selected from among experienced tax professionals and administrators to guide inductees using practical scenarios.
In her remarks, the Deputy Director of the CITN Tax Academy, Mrs Yetunde Suleiman, said the training was designed to expose participants to key developments in national and international tax administration, as well as emerging issues in the digital economy.
She noted that taxation remained central to Nigeria’s economic development and urged the inductees to take their training seriously in light of growing challenges in the country’s tax system, such as evasion, ambiguity of laws and high compliance costs.
Suleiman said, “There is a continuous need to produce, train and unleash qualified tax professionals to tackle these hydra-headed tax challenges.”
She urged participants to approach the sessions with enthusiasm, noting that the knowledge acquired would prepare them to become ambassadors of the institute and sound professionals equipped to drive reform in the tax space.
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