The first hint that the Nigerian fintech ecosystem was headed for a head-on confrontation with the industry’s top regulator — the Central Bank of Nigeria — came at the peak of the #ENDSAR protest, now infamous for one of the most popular youth-led revolts against police brutality. Fintech startup Flutterwave had just announced a crowdfunding link through which payments could be made in support of the protests. But that was not to be. A tweet that followed about an hour later stated that Flutterwave had been “summoned” by the Central Bank of Nigeria for handling these funds. It would later be revealed by Tunde Lemo, a former deputy governor of the Central Bank of Nigeria (CBN) and chairman of Flutterwave, that he ordered the suspension of the fintech firm’s payment platform to prevent illicit financial flow.
After the #EndSARS incident were a series of regulatory attacks and frustrations — including the memorable freezing of accounts belonging to fintechs — from the CBN targeted at fintech startups. Now, it appears leading fintechs in Nigeria have recognized a missing limb: minimal participation by them in the lobbying affairs of regulatory bodies. And they look more set to play the dirty game. Buoyed by millions of dollars in funding, they are poaching former regulators who once saw them as threats.
Opay
Following Olu Akanmu’s resignation from his role as co-CEO of Opera’s Africa fintech startup OPay, Daudu Gotring, a former director of the trade and exchange department at the Central Bank of Nigeria and a contestant for the Plateau state gubernatorial seat in the previous Nigerian general elections, was recruited as the Managing Director of the company. Although Opay portrayed Gotring’s hiring as a move to propel the company towards greater achievements, industry observers speculated that it might be linked to rumors four months earlier that the CBN had suspended accounts of fintech companies like OPay and PalmPay due to concerns about fraud.
Gotring, previously responsible for overseeing the affairs of the CBN’s trade and exchange department, managed various tasks, including issuing guidelines and regulations for the Foreign Exchange Market’s operations. Data from the Nigeria Inter-Bank Settlement Systems (NIBSS) revealed that licensed mobile money operators, including Opay and PalmPay, processed transactions valued at N46.6 trillion ($31.5 bn) in 2023.
One of OPAY’s primary reasons for selecting a former CBN director as MD is that the company deemed Gotring necessary to navigate the intricate Nigerian financial environment, given his blend of regulatory and political influences, as it pursues increasingly ambitious goals.
Flutterwave
Tunde Lemo, a former Deputy Governor (Financial Surveillance) of the Central Bank of Nigeria, had long served on the board of Nigeria’s leading fintech, Flutterwave. Formerly overseeing one of the CBN’s most influential departments, responsible for comprehensive surveillance of the financial system and developing regulatory and supervisory frameworks for financial institutions, Lemo’s influence became evident during the #EndSARS protests when he was rumored to have influenced the apex bank’s decision to spare Flutterwave from license revocation.
Recognizing the sway held by former apex bankers, the company appointed Dipo Fatokun, a former director of the CBN, as its new chairman. During his tenure at the CBN, Fatokun supervised critical initiatives such as the Cashless Nigeria Initiative, the Bank Verification Number project, and the Treasury Single Account (TSA) for the Federal Government, as well as automating foreign currency payments for the Central Bank’s internal and external customers.
Fatokun is expected to play a pivotal role in guiding the company through its next phase of growth. Flutterwave recently shuttered Barter, a virtual card service launched in 2017, focusing instead on its enterprise and remittance business segments. It’s clear that Fatokun’s experience at the central bank closely aligns with Flutterwave’s growth trajectory, indicating the company’s intent to compete at the highest regulatory level in Nigeria’s enterprise payments and remittance segments.
| Former Bank Chiefs Hired | Name of Hiring Startups | Former Job Title/Portfolio/Company | Job Title at Startup | Years of Startup On Hiring Date | Reasons/Impacts for Hiring |
|---|---|---|---|---|---|
| Dipo Fatokun | Flutterwave | Former Director (Cashless Nigeria Initiative, Bank Verification Number, etc) Central Bank of Nigeria. | Board Chair | 8 years | Flutterwave says Fatokun will help promote best practices “as the company moves ahead on its next growth journey |
| Daudu Gotring | Opay | Former Director (Trade and Exchange Department), Central Bank of Nigeria | Managing Director | 5 years | Opay says Mr Gotring, a veteran in the financial services industry, will continue to steer the Opay ship in the direction of even greater strides. |
| Tunde O. Lemo | Flutterwave | Former Deputy Governor (Financial Surveillance), Central Bank of Nigeria | Board Chair | – | Influence with regulator. Lemo was quoted as instructing the shutting down of Flutterwave platform to prevent illicit financial flow during the 2020 ENDSARS protests. |
| Thabani Jali | Tyme Bank, South Africa | Director (Compliance and Governance), NedBank Group | Board Chair | 4 years | To bring stability and sound corporate governance practices to the neobank. |
To What Effect?
Thus far, the trend of Nigerian fintech startups hiring former apex bank chiefs seems to be gaining traction. However, there’s a caveat: director fees. Unofficial data suggests that the average annual pay for Opay’s CEO ranges between $150,000 to $200,000 or more. This compensation is typically reserved for top fintechs with substantial funding reserves. Additionally, these appointments can potentially extend for as long as desired, given that a recently released code of corporate governance for banks and financial institutions stipulates a maximum term of twelve years for non-executive directors, a category most former CBN hires fall under.
Beyond the regulatory and political influence, it appears that Nigerian fintech startups, now mature and confident in their formidable fundraising capabilities, are beginning to navigate the landscape akin to their traditional counterparts.
