The surge in profits recorded by Nigerian banks in 2024 is proving to be more than a shareholder delight — it’s fast becoming a major boost to the country’s underfunded tech ecosystem.
According to an analysis of audited results from six commercial banks, their collective contribution to the Nigeria Information Technology Development Fund (NITDEF) has climbed by 57% year-on-year, hitting N34.3 billion — the highest since the fund was established.
These banks — Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Fidelity Bank, Stanbic IBTC Holdings, and Wema Bank — have so far outpaced last year’s total contribution of N21.8 billion. This leap underscores the direct link between banks’ profitability and the growth of the technology development fund managed by the National Information Technology Development Agency (NITDA).
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What makes the 2024 figure even more significant is that it excludes the financials of major players like Access Holdings and FBN Holdings, both of which were top contributors in 2023. Last year, the total remittance by all banks stood at N33.7 billion. Now, with only six banks already crossing that mark, 2024 appears set to deliver a record-breaking inflow into the Fund.
Banks Leading the Charge
Zenith Bank topped the chart with an N11.4 billion remittance, a sharp 70% jump from its N6.7 billion contribution in 2023, mirroring its eye-watering profit before tax (PBT) of N1.3 trillion. Close behind is GTCO, which paid N10 billion from a PBT of N1.26 trillion, more than doubling its N4.7 billion contribution the previous year.
UBA paid N4.67 billion from its N803.7 billion PBT — a decline from the N6.7 billion it paid in 2023. Fidelity Bank paid N3.9 billion, up from N2.3 billion, while Stanbic IBTC remitted N3.2 billion, also nearly doubling its 2023 figure of N1.8 billion. Wema Bank, despite being the smallest among them in terms of profits, paid a respectable N1 billion from a PBT of N102.5 billion.
These payments are in line with the NITDA Act of 2007, which mandates companies with an annual turnover of over N100 million — including banks, pension funds, insurance companies, and telecom operators — to pay 1% of their profit before tax to the fund.
Failure to comply, according to the law, can lead to fines of at least N1 million and the prosecution of company executives if it’s found that the non-compliance was deliberate.
Past Apathy and Present Momentum
NITDA has in recent years lamented the refusal of several eligible companies to comply with the mandatory levy. But the 2024 returns, at least from these six banks, indicate a sharp reversal. While the total NITDEF collection in 2022, across all sectors, stood at N22.5 billion (then the highest ever), it has now been eclipsed by the six-bank total alone.
With the expected addition of other top contributors like Access Holdings and FBN Holdings, this year’s NITDEF inflow could approach or even exceed N50 billion — a figure previously thought far-fetched.
Still, NITDA has continued to battle with low compliance across several sectors. The FIRS, which handles collection on NITDA’s behalf, has called on the agency to demonstrate better transparency in its use of the fund to encourage voluntary compliance.
Where the Money Goes
Kashifu Inuwa, Director-General of NITDA, has repeatedly stressed the strategic importance of the fund in achieving the agency’s digital transformation goals.
According to him, NITDEF is a pillar for several national initiatives, including the Nigerian Startup Act implementation, the completion of the National Digital Innovation and Entrepreneurship Centre, the execution of the National Data Strategy, blockchain adoption framework, and National Digital Skills Strategy aiming for 95% digital literacy by 2030.
These initiatives, Inuwa noted, are vital to positioning Nigeria as a tech-forward country that can compete globally. But to make that happen, the agency needs consistent and increasing financial support.
A Growing Source of Tech Funding
Beyond compliance, the current momentum among banks points to a broader opportunity for NITDA: turning the NITDEF into a reliable financing arm for Nigeria’s growing tech ambitions. In a landscape where government funding for innovation is often limited or mismanaged, the NITDEF when transparently administered, is expected to become a game-changer.
The challenge, however, remains in bridging the gap between the fund’s inflows and visible, impactful projects that Nigerians can connect with. As Kabiru Abba, Lead for General Tax Operations at FIRS, put it, NITDA must “continue to showcase its achievements” using the fund if it hopes to build public trust and ensure long-term compliance.
With 2024 shaping up to be a bumper year for NITDEF, attention is now turning to how the agency will deploy the fund. Industry watchers say it’s time for NITDA to step beyond vague policy announcements and deliver visible, large-scale tech interventions — from training to infrastructure and support for startups.
If it gets this right, the surge in bank profits may not only brighten the bottom lines of investors, but also lay the foundation for a more digitally literate, innovative, and competitive Nigeria.