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Top banks raise tech budget by 43% in Q1

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Nigeria’s largest lenders spent more than N119bn on information technology, software, and related digital infrastructure in the first three months of 2026, indicating the growing importance of technology investments as banks deepen digital transformation efforts.

An analysis of the first-quarter financial statements of four tier-one lenders—Guaranty Trust Holding Company Plc, Zenith Bank Plc, United Bank for Africa Plc and Access Bank Plc—by The PUNCH showed that their combined spending on technology rose to about N119.03bn in the period ended March 31, 2026, from N83.15bn in the corresponding period of 2025.

The increase of N35.88bn represents a 43.2 per cent year-on-year rise in technology spending, reflecting growing investments in software, digital banking platforms, cybersecurity, IT support services, and other technology infrastructure.

The spending pattern, however, varied across the lenders, with Zenith Bank emerging as the biggest spender, UBA recording the fastest growth in technology expenditure, while Access Bank was the only lender to report a decline.

GTCO, a prominent multinational financial services group headquartered in Victoria Island, Lagos, recorded total technology-related spending of approximately N16.4bn during the first quarter of 2026.

According to its financial statements for the period ended March 31, 2026, the Group, which includes GTBank Nigeria and other subsidiaries, recorded N8.50bn under “technological and service-related expenses” during the three-month period.

In addition, GTCO invested N7.89bn in purchasing software classified as additions to intangible assets, compared with N4.68bn spent on software acquisitions in the corresponding period of 2025.

Combined, the bank’s operational and capital technology expenditure amounted to N16.40bn, representing an increase of about 24.3 per cent from an estimated N13.19bn spent in the first quarter of 2025. The software investment alone rose by 68.6 per cent year-on-year.

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Zenith Bank Plc, a multinational financial services institution and one of Nigeria’s largest banks by tier-one capital, spent N43.83bn on technology in the first quarter, making it the highest spender among the four lenders reviewed.

The bank’s unaudited interim financial statements showed that technology spending rose sharply from N21.93bn recorded in the corresponding period of 2025, representing an increase of almost 100 per cent.

The first-quarter spending accounted for nearly half of the N91.92bn Zenith spent on technology throughout 2025, suggesting an acceleration in digital investments this year.

United Bank for Africa Group, the leading sub-Saharan African bank with more than 45 million customers, over 20,000 employees, and about 1,000 branches across 20 African countries, recorded the fastest increase in technology expenditure among the lenders.

The bank’s interim unaudited consolidated financial statements showed that IT support and related expenses rose to N22.07bn in the first quarter of 2026 from N6.18bn in the same period last year.

The increase of N15.89bn represents a year-on-year growth of approximately 257 per cent, more than tripling the bank’s technology spending over the period.

Access Bank Plc, the largest bank in Nigeria and Africa’s leading financial institution by customer base, with more than 60 million customers across three continents, spent N36.73bn on IT and e-business expenses during the first quarter of 2026.

However, unlike its peers, Access Bank recorded a decline in technology spending. The bank’s unaudited consolidated and separate financial statements showed that IT and e-business expenses fell from N41.85bn in the corresponding period of 2025.

The decline of about N5.11bn translates to a 12.2 per cent reduction year-on-year, making Access Bank the only one among the four lenders to report lower technology spending during the review period.

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Despite the decline recorded by Access Bank, the broader trend among Nigeria’s largest banks points to increased technology investments as lenders strengthen digital capabilities, automate operations, improve cybersecurity systems, and enhance customer experience through digital channels.

The Co-founder of Recital Finance, Bobola Ojo-Ami, told The PUNCH that the scale of these investments should not come as a surprise. “Nigeria’s financial ecosystem is processing far more digital transactions today than it did last year and a few years ago, with electronic payment volumes and digital banking revenues continuing to grow year after year.

“Banks are responding to a structural shift in customer behaviour, where about 90 per cent of retail banking transactions are now completed through digital channels rather than inside banking halls,” the executive stated.

He said that beyond traditional banking, the broader financial ecosystem was expanding, driven by growth in digital payments, the return of international card transactions, the rollout of the Nigeria Inter-Bank Settlement System National Payment Stack, new payment infrastructure, increasing cross-border African trade, the Pan-African Payment and Settlement System, and deeper participation in capital markets, all of which pointed to a more connected and transaction-intensive economy.

According to him, these developments, taken together, explained why sustained investment in technology infrastructure was essential. The executive noted that as transaction volumes, customer expectations, payment complexity, and operational demands such as reconciliation, settlement, and compliance continued to rise, sustained investment in digital infrastructure remained central to growth, resilience, security, and competitiveness.

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Nigerian states’ revenues rise 93%, but education spending drops — World Bank

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The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

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He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Nigeria promotes investment without building production capacity – UNILAG don

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A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

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Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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Import waivers, insecurity end two-year agric trade surplus

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Import waivers meant to ease hunger and insecurity on farms have led to a deficit, ending a two-year run of surpluses, as Nigeria’s agricultural trade balance swung from a N740.27bn surplus in the first half of 2025 to a N56.13bn deficit in H1 2026, according to agriculture and trade experts.

Recent foreign trade data from the National Bureau of Statistics showed that agricultural exports fell by 33.28 per cent, or N985.14bn, to N1.98tn in H1 2026 from N2.96tn in H1 2025.

Agricultural imports fell by only 8.50 per cent, or N188.74bn, to N2.03tn from N2.22tn over the same period. The gap between the two movements produced a N796.40bn swing in the trade balance.

Nigeria recorded a N365.74bn deficit in H1 2023, when imports of N926.25bn far exceeded exports of N560.51bn. The balance then turned to a N194.92bn surplus in H1 2024 before it widened to N740.27bn in H1 2025.

In separate phone interviews with The PUNCH, Agribusiness experts, including the Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, explained that recent government policy led to the shift.

Banjoko said, “Some waivers were given for products like palm oil and rice, and the import tariffs were drastically reduced. It became more favourable for people to import than to patronise local producers.”

He said the waivers on food commodities hurt domestic producers, even though lower tariffs on tractors and manufacturing equipment helped them.

According to Banjoko, “The effect is that our imports will rise above our exports. Second, we will discourage local production. Thirdly, we will be reducing employment, because some factories will shut down if they are not able to compete.”

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Banjoko also said weak funding for processors compounds the problem. He said foreign direct investment flows mainly into the capital market rather than into production and processing, so local processors cannot scale.

He urged the Federal Government to speed up the Special Agro-Industrial Processing Zones programme. “We should speed up such projects where we can produce enough for our country and start exporting, not look for shortcuts by reducing prices,” Banjoko added.

Meanwhile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, identified two major factors behind the deficit. He said the first was the Federal Government’s decision to allow some food imports to tackle runaway inflation.

Yusuf said, “The first is the decision of the government to allow for some food imports as a result of the challenges of food inflation, which at a point was getting almost completely out of hand.”

He added that insecurity worsened the supply gap and cut export capacity, stating, “Insecurity led many farmers to leave their farms. Many of them have ended up in IDP camps, and quite a number have completely abandoned farming.”

He added that farmers cannot export without output. Yusuf said, “You can only export when you have the output.”

Yusuf also said high input costs and falling produce prices have discouraged farming. He said, “Most of these inputs are imported, so the exchange rate situation has seriously affected the cost of inputs, and the prices of produce have gone down.”

He urged the Federal Government to cut the cost of fertiliser, agrochemicals, machinery and improved seedlings. He also called for a minimum guaranteed price for agricultural produce.

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Yusuf said, “The government can establish a threshold below which, if prices fall, it will give farmers some compensation. That is the way it is done in many other economies.”

Source: punchng.com

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