Payment system key to lifting Nigerians from poverty – Cardoso

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has emphasized that a strong, inclusive and efficient payment system remains a critical tool for reducing poverty and expanding economic opportunities for Nigerians. He stated that financial inclusion, supported by digital payment infrastructure, is central to achieving sustainable economic growth and improving access to formal financial services across the country.

Cardoso’s remarks come amid ongoing reforms in Nigeria’s financial sector aimed at deepening digital finance adoption, improving transparency in transactions, and reducing reliance on cash-based economic activities. According to him, modern payment systems are not only financial tools but also development enablers capable of connecting millions of underserved citizens to the formal economy.

The governor noted that millions of Nigerians remain outside the formal financial system, limiting their ability to save securely, access credit, receive government support, or participate fully in economic activities. He stressed that bridging this gap is essential for inclusive development and long-term poverty reduction.

The Central Bank of Nigeria has in recent years prioritized policies aimed at expanding digital financial services, strengthening mobile money systems, and improving interoperability across payment platforms. These efforts are designed to reduce friction in transactions and make financial services more accessible, especially in rural and low-income communities.

Financial experts say that efficient payment systems reduce transaction costs, improve business efficiency, and enable small enterprises to grow by giving them access to formal banking services. For informal sector workers, digital payments also provide a pathway to financial identity, which is crucial for accessing loans and insurance products.

Cardoso highlighted that digital payment systems also support government efforts to deliver social welfare programs more effectively. By reducing leakages and improving transparency, electronic payments can ensure that financial assistance reaches intended beneficiaries without delays or inefficiencies.

Nigeria’s financial technology sector has played a significant role in expanding payment system access. Mobile banking, agency banking, USSD services, and digital wallets have helped millions of previously unbanked individuals gain access to financial services.

Industry stakeholders note that fintech innovation has been one of the fastest-growing segments of Nigeria’s economy, attracting investment and creating jobs while improving financial inclusion rates. However, challenges such as infrastructure gaps, cybersecurity risks, and digital literacy constraints still limit full adoption in some areas.

The governor also pointed out that improving payment infrastructure is closely linked to broader economic reforms aimed at formalizing economic activity and improving tax collection efficiency. A more digital economy allows for better tracking of transactions and enhances fiscal planning.

Economists argue that financial inclusion is strongly correlated with poverty reduction, as access to financial services enables households to save, invest, and manage risk more effectively. Without access to formal banking systems, individuals often rely on informal and less secure financial arrangements.

The Central Bank of Nigeria has continued to push initiatives such as the cashless policy framework, which encourages electronic transactions over physical cash usage. The policy is intended to reduce the cost of cash management, improve monetary policy effectiveness, and promote financial system efficiency.

Experts also note that payment systems play a critical role in supporting small and medium-sized enterprises (SMEs), which are a major source of employment in Nigeria. Digital payments allow SMEs to operate more efficiently, expand their customer base, and access credit histories that can be used for financing.

However, infrastructure limitations remain a major challenge to achieving full financial inclusion. Unstable power supply, limited internet connectivity in rural areas, and high transaction costs can hinder adoption of digital financial services.

Cybersecurity concerns also remain an important issue, as increased digitization exposes users to risks such as fraud and data breaches. Regulators and financial institutions continue to invest in improving system security and consumer protection frameworks.

Despite these challenges, Nigeria has made significant progress in expanding digital payment usage over the past decade. Electronic transfers, mobile payments, and point-of-sale transactions have grown rapidly, reflecting changing consumer behavior and increased trust in digital systems.

Cardoso’s remarks underscore the belief that strengthening payment infrastructure is not just a financial policy issue but also a development strategy that can help lift millions out of poverty by integrating them into the formal economy.

He emphasized that continued collaboration between regulators, financial institutions, fintech companies, and other stakeholders will be essential for building a more inclusive financial ecosystem.

Analysts agree that while payment systems alone cannot eliminate poverty, they are a foundational element in creating opportunities for income generation, entrepreneurship, and access to essential financial services.

For now, the focus remains on expanding access, improving efficiency, and ensuring that Nigeria’s payment ecosystem becomes a reliable driver of inclusive economic growth under the oversight of the Central Bank of Nigeria.