2022 was the year that took everyone by surprise – it was the year that soothsayers like me got rapidly defenestrated because, to be frank, our predictions are educated guesses. I’m not sure a thousand random monkeys would have done worse.
If someone told me that tech valuations would have such a bad rout, I would have bet my entire savings and two of my limbs.
I’m not sure the future look-see would be any different this year.
Nevertheless, to err is human but to predict is also human. So, let’s do it.
#1 CBN loses the cashless war. Again.
When the Central Bank of Nigeria came out with the new Naira notes and cashless policy to go with them, like bread and butter, every smart person hailed it as one of the best policy approaches to drive adoption of digital payments. But then I was publicly cautious that cash isn’t something that gives up easily. Unfortunately, the CBN lost the initiative by not properly managing stakeholders, and with the help of corrupt politicians, cash will probably win this round.
#2 Telcos lose the USSD war. Again
Banks have refused to play ball with telcos as far as paying for USSD sessions is concerned. And trust me, it’s not a valid game as the arguments from the telcos to make banks pay for USSD are so asinine I wouldn’t understand why they are even dragging banks into it in the first place. Banks won the round but the telcos are threatening to come back again. This time around, the banks will spank them, even with MTN and Karl in the ring, decisively and conclusively.
#3 Top super agent networks crack cardless transactions
Everyone knows that super agents have been growing like wild vines. But so far, the super agents have only been serving the financially included who have debit cards. Eventually, their growth will peak. But knowing the smart guys running the show, they will push into doing cardless transactions as the innovation will extend new vista of growth. Expect anyone to be able to do transactions without cards at any agent location around you soon.
#4 Market coalesces around few major fintech players
While it doesn’t snow in Nigeria, the funding winter is pretty cold and our teeth are chattering. That means with no immediate cash available, there will be tons of funerals for dead startups not able to fund their sustenance. The truth is, the problems startups are solving won’t disappear, so those lucky enough to be alive will continue to solve these problems, expand and grow. At the end of the year, only a few major and more powerful players will remain.
Should we bet on the winners?
#5 The new debit card scheme misses the mark
The CBN, NIBSS, and banks really do love to solve the payments problem in a cost-effective way. You can’t blame them – running transactions with international card brands can be quite expensive, especially when all the FX margins on international transactions have vanished. So they came together to launch a new card scheme starting in January. But this may miss the mark because of various reasons: #1 they don’t have the experience of the incumbent scheme operators; #2 the current operators won’t really help, they may even make sure it doesn’t work; #3 if it doesn’t work well, the market will dump it like a bad habit; #4 read 1 to 3 again.
#6 FCCPC lending regulation loses relevance
Last year, some lenders were acting like absolute troublemakers – their behavior was so bad it was practically criminal. But when the FCCPC tried to fix the problem, they conveniently forgot to address the root cause – borrowers just don’t like to pay up. By ignoring the lenders in their quest for privacy, the FCCPC has no allies in the industry to help them succeed. And when the FCCPC gets tired of chasing down lenders, which will happen soon anyway, the entire FCCPC compliance will fall apart.
#7 Moniepoint becomes a commercial bank
This isn’t even a prediction; it’s as certain as my dog not becoming the next president of Nigeria (I don’t’ve a dog and even if I did, nobody would vote for it). Moniepoint is an MFB that became the financial infrastructure for Teamapt and is growing faster than thunder. It makes logical sense for Moniepoint to become a proper commercial bank: #1 it can now use its excess liquidity to do treasury transactions and make tons of money instead of counting pennies; #2 it can start banking larger customers to develop stronger clout (think corporates); #3 it can do large credits to FMCGs and lock down the entire value chain; #4 What else won’t it do?
#8 MTN PSB becomes the largest super-agent
Here’s the one thing you don’t do with Karl Toriola – bet against him. So come 2023, putting the fraud and madness of 2022 behind him, MoMo, the MTN bank, will start to use the best of its network leverage to catch up with Moniepoint to become the largest agency network in Nigeria. If it cracks the cardless transaction, then that will be its leverage.
#9 Startup investment recovers because nothing lasts forever, not even bad news
While the winter may seem to drag on forever, and the sun seems not to shine again, things will start thawing. You see, nothing lasts forever. Around Q3 and Q4 of 2023, VCs will be back in the investment arena, seeking out the next Paystack, Flutterwave, and Teamapt. This time around, though, the due diligence will be worse than a colonoscopy.
#10 CBDCs, including eNaira, are laid to rest
In 2022, the crypto winter started, and boy, it will be cold and long. The winter has already frozen NFTs, numerous exchanges, and tons of tokens. Meme coins are now, guess what, just meme coins! Expect the same fate for Central Bank Digital Currencies (CBDCs), including our dear eNaira.
The problem with CBDC is that it is trying to solve a problem that doesn’t exist. Cryptocurrencies were created to sideline regulations and central control, so the concept of CBDC itself is anathema.
The CBN relaunched the eNaira and got banks to line up behind it. But we all know that nobody is using it for anything. Maybe they should just allow the ghost to rest in peace this year.