Professional services firm, Ernst and Young, has released a report on the state of fintech in Nigeria in collaboration with the Fintech Association of Nigeria (FinTechNGR).
According to the Nigerian FinTech Census 2020 report (PDF), attracting and retaining talents is the biggest challenge faced by Nigerian fintech startups. Of course, the COVID-19 pandemic changing the hiring landscape did not help.
Data analytics, cyber and IT security, and software engineering emerged as the most critical skills required for success, according to 77% of fintech leaders interviewed for the report. CFOs and administrative talents are other necessary but scarce skills needed by fintech startups.
This is hardly surprising. Google’s IFC report shows that while there is a growing number of software developers in Africa, a skills gap exists with often-dated engineering curricula not providing opportunities for developers to practise skills gained in the classroom.
Also, Nigeria’s developer population of about 85,000 is still small compared to other parts of the world. With about 120,000, South Africa has the largest number of developers on the continent, while Egypt is second with nearly 86,000 developers. Kenya and Morocco round up the top five with 58,175 and 46,483 developers, respectively.
The report details challenges faced by fintech startups showing that while they mainly hire locally, they also leverage international talents, with about 48% using international talents.
To tackle this skills shortage, 77% of respondents partner with other SMEs and universities to ensure that they have a good talent supply. They also provide opportunities for talents to get upskilled.
Away from the dearth of skills, fintech startups also battle with the country's brain drain as more skilled workers emigrate or choose to work with foreign startups.
Other highlights
The report also shows that foreign investors accounted for most startup funding (57%) received by fintech startups. In addition, post-revenue startups were more likely to receive funding when compared to pre-revenue startups.
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Startups interviewed also stated that, apart from finances, they need support in partnership opportunities, access to new customers, and international expansion and growth, among other priorities.
