In the past month, I shared two unique warnings about Nigeria’s financial system architecture. To start with, we noticed that the recent ₦4.65 trillion bank recapitalisation didn’t help the real economy since regular commercial banks were only chasing safe government bonds.

After that, we dug into OPay’s $4 billion US IPO filing and saw that a single foreign-backed algorithm was quietly raking in 90% of its global revenue just from the survival trades in Nigeria’s informal sector.

This week, the Nigerian government finally heard my cry. Their answer is an amazing flex of government strength. After God, na governemnt.

On Tuesday, the Nigerian Senate approved a big bill to regulate “Systemically Important Fintechs” (SIIs). The law isn’t just about stricter compliance or raising capital rules or implementing the new tax laws. The bill gives the Central Bank of Nigeria (CBN) the power to supervise the inner workings and systems of these digital fintech companies directly with no restrictions.

The government’s making it a law to have secret access to the servers that run the country’s algorithms.

If you wanna know why the federal government is acting so fast, just check out what went down at the Central Bank few days back.

Data from November 9 showed Nigerian banks had stashed a whopping ₦5.9 trillion in idle cash at the CBN’s Standing Deposit Facility (SDF). The banks are outright refusing to provide loans to businesses or the public.

They are completely happy to accumulate cash and have the central bank pay them interest. The liquidity hoarding was so intense that the CBN had to launch a new ₦1.5 trillion debt auction earlier to absorb the surplus cash.

The Great Migration

We are seeing the ultimate and definitive split within the Nigerian financial system. The conventional tier-one banks have effectively turned into money-market hedge funds. Their sole purpose is to trade government securities and move trillions of Naira between their vaults and the CBN.

With traditional banks abandoning the streets, the true activity of the human economy, including market traders, gig workers, and small businesses, moved entirely onto FinTech platforms.

The government has recognised a disturbing fact: despite strict regulation of traditional banks, these banks no longer connect with the citizens. The algorithms do.

When a tier-one bank’s mobile app is offline for a day, corporate businesses express their dissatisfaction. But if OPay or Moniepoint goes down for a day, the informal economy takes a hit, and loads of people get close to rioting.

The Argument

The recent Senate bill is a clear admission of government failure, hidden behind the guise of regulatory updates.

The state loses its importance in the daily lives of citizens when it cannot provide the physical infrastructure for the working class, and its highly regulated banks refuse to fund the real economy.

By tagging these fintechs as “systemically important” and pushing for direct server access, the government’s basically forcing its way back into an economy that’s left it in the dust.

We’re stepping into the age of digital takeover. The government has realized that the modern central bank of the Nigerian masses is not in the glass headquarters of Abuja. It is on a cloud server hosted by foreign-backed FinTech companies.

The government’s not happy anymore just taxing or regulating the digital economy. They’re legally taking over the machine.