The Nigerian market will invest approx. 1,028 bn USD into payment and IT solutions. The paper give clear recommendation on how to tab the potential in Nigeria.

1. NIGERIA A CASHLESS SOCIETY –
A MULTIMILLION CHANCE FOR NIGERIA AND EUROPEAN IT COMPANIES
1,208,000,000 € ‐ That is the estimated amount of
money Nigeria will invest in PoS terminals, ATMs and
payment solutions though 2015 due to the “Cash‐less
Lagos project”. This will result in various prospects for
the country on one hand and huge business
opportunities for solution companies on the other hand.
“For all the challenges
of the Nigerian market,
if companies do not
have a Nigeria strategy
they do not really have
an Africa strategy.”
(CEO, SAB Miller, 2009)
Africa in a nutshell When talking about future business,
Africa is one of the fastest growing
markets. The annual average GDP
growth since 2000 counts is 4,9%
and the population is set to double
in the next fourty years from 1
billion to 2 billion people. Due to the
high birth rate the median age in
Africa is twenty years. The number of
smart phones increased by 1280%
from 2010 to 2011, enabling the
population for mobile payments and
banking. The growing middle class
has already started to revolutionize
the banking industry.
Banking in Africa Compared to European countries,
banking in Africa is different. In
Sub‐Saharan Africa, with over 400
million bankable people, four out of
five adults do not have a bank
account yet. However, there are
growing trends using cell phones to
make payments. This group of
unbanked people will have to be
addressed by the local banking
sector and offers huge opportunities
for banks and IT organizations.
Banking in Nigeria Due to a survey by Enhancing
Financial Innovation and Access in
Nigeria 65% of the adult males, 77%
of adult females and 80% of the
country’s rural population are
unbanked. As a result, currently 85%
of all payment transactions in
Nigeria are done with physical cash.

2. “I must say my bank is awesome,” Osoba says. “I have
been using their internet banking for over a year, and
I’m more comfortable with it than having to go to the
bank. I do so much from my phone/laptop than I ever
thought I could. I only go into the banking hall to make
deposits.”
(Wale Osoba, a young entrepreneur, Lagos)
Cashless Lagos The “Cash‐Less Lagos Project” is one
of the regulations the Central Bank
of Nigeria established. It was
planned originally to be started on
January, 1st 2012 as a case scenario
in Lagos and later expanded
throughout in the country. Due to
some necessary amendments the
implementation has been postponed
till the 1st of January 2013. The goal
of this project is to reduce the
amount of physical money (coins
and notes) but not eliminate it. The
reasons for this target are
multilateral and to create multiple
favorable circumstances:
Huge business opportunities for
IT ‐ companies First, cash entails high costs for all
parties of the value chain, especially
the banks. Furthermore, money
which is outside the formal economy
limits the effectiveness of managing
inflation, encouraging economic
growth or other monetary policy. On
the consumer side there are also
high risks, due to cash‐related
crimes such as robberies. High cash‐usage
also contributes to fraudulent
activities including corruption,
leakages and money laundering. In
addition, fire and floods also
increase the danger of losing notes.
By reducing the amount of
circulating money Nigeria can
reduce costs and benefit from the
investments.
Content of this project is among
other rules that only CIT licensed
companies are allowed to provide
cash pick‐up services. If others do so
they will be sanctioned. Furthermore
3rd party cheques above N150,000
are not eligible over the counter, but
instead only through a clearing
house. Aside from that, there will be
a ‘cash handling charge’ on daily
cash withdrawals and deposits,
which occurs when these
transactions exceed N500.000 for
individuals and N3.000.000 for
corporate bodies.
Nevertheless this new regulation
offers great opportunities for
(European) companies, who offer
Reasons for introducing the new
cash policy in Nigeria:
1. Development and
modernization of the Nigerian
payment system
2. Reduction of costs e.g.
banking services and to push
financial inclusion
3. Improvment of the
effectiveness of monetary
policy (managing inflation,
driving economic growth)

3. solutions which meet the needs of
the new Nigerian standards.
Companies with a focus on POS‐terminals,
ATMs, payment terminals,
software for electronic payments or
mobile payment solutions should
not miss this chance for business.
With 10% cheque growth annually in
Nigeria, cheque solutions for
electronic cheque truncations are
needed. The importance of cheques
is rising as well and thereby so is the
demand for cheque scanning
methods, software and signature
solutions. These facts and figures
show the huge potential for the
industry as a result of the
regulations.
The numbers are tremendous:
According to the Central Bank of
Nigeria it is planned to install
additional 45.000 PoS terminals by
2012 and another 350.000 by 2015.
The targeted deployment rate of
2.247 machines per 100.000 people
would lead to more than 3,5 million
machines based on the current
population of Nigeria stated with
160 million people. Moreover, the
XCOM Africa GmbH is a consultancy
company with single focus on Africa. We
consult companies with their Africa
strategy and create value by
transferring our cultural Africa
knowledge into their organization. Our
services include market analysis,
development of market entry strategies,
coaching, local project managment,
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number of ATMs is expected to grow
to 75,000 by 2015, a dramatic
increase of 65,000 over the 10,000
currently in place.
Executive Takeaway Overall the banking system is in an
important phase of change. This
trend should be taken into
consideration by every European
company when thinking about
expanding into other countries and
continents. Africa, with its growing
population and importance for
future business, is a key market for
all banking solutions, focused
towards cashless solutions. Nigeria
will especially have a significant
demand for PoS, ATMs and many
other banking‐related products, like
software or other electronic
payment solutions.
Source Central Bank of Nigeria (2012)
EFInA (2012), www.cbn.gov.ng
ALLAfrica.com, Punchng.com
Global Press Institute
Quote http://www.globalpressinstitute.org
/global‐news/africa/nigeria/
nigerians‐debate‐pros‐and‐cons‐new‐
cashless‐policy?page=
3#ixzz1rvG5JhsA