By Emmanuel Ojo
The recent currency flotation by the Central Bank of Nigeria, according to RedTech CEO Emmanuel Ojo, could help bring in more foreign investors to the fintech sector.
He said, “He emphasized the benefits of the naira unification for Nigeria’s digital payment systems and predicted that more foreign investors would enter the country’s fintech sector.
He pointed out that “Possibly this would also attract more foreign investors into the fintech space going forward”
Based on how they work around having a unification of exchange rates, foreign investors could now decide to localize their fees since there’s a supporting policy to allow them to repatriate their funds at the end of the day.
Emmanuel Ojo noted that the floatation of the naira would increase the cost of procuring software and other technological solutions that support digital payment systems.
When he continued to point out that
“Based on the advancements of digital payments, we’ve also seen an uprise in cyber-attacks and there’s a need for us to up our game in cyber security
Now we have solutions – software and hardware that we must purchase so that we can ensure that the consumers are protected.
For instance, you have hardware usually called HSMs that handle key management systems of data that are encrypted particularly when it comes to ISO messaging and card transactions.
Now these tools are quite expensive. But now with the floating of the naira, purchasing them would be more expensive than we used to experience.”
Likewise he pointed out that the naira’s floating rate would facilitate the processing of transactions in foreign currencies, which would be advantageous for the US dollar-based digital payment industry.
Few weeks ago the Central Bank of Nigeria (CBN) has authorized commercial banks and dealers to trade foreign exchange freely at a rate set by the market.
This approach was consistent with President Bola Tinubu’s pledge to harmonize the market’s various exchange rates.
As a result, banks could now sell foreign currency at prices set by the market, meaning that Nigeria now has a freely floating exchange rate.
Prior to the Sallah Break, the official Investor & Exporter Window exchange rate between the naira and the dollar closed at N763/$1 yesterday.
The naira depreciated to close at N763/$1 at the investor and exporter (I&E) window from an opening rate of N760.5 per dollar, according to information from the FMDQ Securities Exchange.
