India’s High Commissioner, Balasubramanian, made an audacious proposal to transform Nigeria’s digital payment landscape by introducing India’s Unified Payments Interface (UPI) technology, as the country struggles with escalating socio-economic crises, including double-digit unemployment, skyrocketing inflation, and a currency on life support. This project raises important concerns regarding its viability and compatibility with Nigeria’s larger economic reality, even as it shows India’s growing interest in strengthening its commercial connections with Nigeria.
India’s UPI has been transformative in its home country, enabling over 3,700 transactions per second and accounting for 46 percent of the world’s mobile transactions. Its potential to replicate such success in Nigeria, where mobile payments are increasingly embraced, appears promising. However, a closer examination reveals a stark challenge: Nigeria’s infrastructure and institutional weaknesses.
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Digital technologies thrive in environments where foundational systems—power supply, internet connectivity, and regulatory clarity—function seamlessly. Nigeria, however, continues to struggle with erratic electricity supply, low broadband penetration, and a lack of digital literacy among its population. These structural impediments cast doubt on the viability of deploying advanced payment systems at scale.
Furthermore, the introduction of UPI risks exacerbating socio-economic disparities. Without deliberate efforts to promote inclusivity, the technological divide could deepen, leaving rural communities and low-income groups behind. For a country with significant informal economic activity, bridging this divide is critical to any meaningful digital transformation.
“ Its potential to replicate such success in Nigeria, where mobile payments are increasingly embraced, appears promising. However, a closer examination reveals a stark challenge: Nigeria’s infrastructure and institutional weaknesses.”
India’s interest in Nigeria is not confined to digital payments. Bilateral trade between the two nations currently stands at $7.95 billion, driven by Nigeria’s oil exports and India’s supply of refined petroleum products, pharmaceuticals, and engineering goods. Yet, recent years have seen a decline in trade volume, reflecting shifting global energy dynamics and the challenges of diversifying trade beyond oil.
India’s pivot to sectors such as agriculture, mining, and FinTech suggests a strategic recalibration. By introducing UPI, India aims to position itself as a key partner in Nigeria’s quest for economic diversification. But this raises a critical question: does Nigeria have the institutional readiness to capitalise on these opportunities, or will they become missed chances, as has often been the case in its history of international partnerships?
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The recent commissioning of the Dangote Refinery, hailed as a game-changer for Nigeria’s petroleum sector, also casts a shadow over India’s refined oil exports to Nigeria. While India remains one of Nigeria’s top trading partners, the refinery’s operations could disrupt established trade flows. India’s focus on emerging sectors such as FinTech may reflect a pragmatic effort to adapt to these evolving realities.
However, it is worth noting that India’s engagement goes beyond trade. From security cooperation to capacity building in agriculture and healthcare, Indian investments have surpassed $27 billion in Nigeria, underscoring a long-term commitment that few other countries can rival.
The success of India’s digital payment initiative in Nigeria depends on more than technological deployment—it requires alignment with Nigeria’s economic and institutional priorities. This is where the Nigerian government must step up. Introducing UPI without addressing systemic issues such as unreliable electricity, regulatory opacity, and corruption risks turning a transformative idea into yet another underwhelming initiative.
For India, the venture represents both opportunity and risk. While Nigeria offers a vast market with significant potential, the complexities of doing business in the country demand patience, resilience, and strategic foresight. Indian companies, having operated in Nigeria for decades, understand this dynamic well. Their continued investments, despite security and economic challenges, reflect a belief in Nigeria’s potential that the government itself must strive to match.
India’s push to export UPI to Nigeria is a bold move that underscores its growing global economic ambition. For Nigeria, it represents a chance to harness cutting-edge technology to drive financial inclusion and economic diversification. Yet, success depends on Nigeria’s ability to address the structural barriers that have long stymied progress.
This partnership, if handled with care, could mark the beginning of a new chapter in Nigeria-India relations—one that transcends oil and embraces innovation. But without robust governance and strategic planning, it risks becoming another chapter in the story of unrealised potential.
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Nigeria must approach this opportunity with the seriousness it demands, recognising that technology is not a panacea but a tool that can only succeed in a supportive ecosystem. This requires a concerted effort from both the public and private sectors to foster an environment conducive to innovation and growth. The government must invest in digital infrastructure, streamline regulations, and promote digital literacy. Additionally, businesses must embrace technological advancements, invest in research and development, and collaborate with startups and tech hubs.
India, for its part, must remain vigilant, ensuring its investments align with Nigeria’s needs while navigating the complexities of one of Africa’s most challenging markets. This necessitates a deep understanding of the Nigerian market, its unique challenges, and its potential. Indian companies should prioritise partnerships with local businesses, transfer knowledge and technology, and create sustainable jobs. By working closely with Nigerian stakeholders, India can contribute to Nigeria’s digital transformation and reap the benefits of a thriving partnership.
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