By Joseph Erunke, Abuja

As Nigeria accelerates efforts to become Africa’s leading digital economy, experts are warning that the country’s digital transformation agenda cannot succeed without one critical foundation: a secure and trusted digital identity system.

In an analysis by digital identity expert, Dr. Olalekan Olasiyan, digital identity was described as the “keystone” of Nigeria’s economic future, capable of driving financial inclusion, reducing fraud, improving public services and expanding opportunities for millions of underserved citizens.

According to the report, Nigeria has made significant progress through the Bank Verification Number (BVN) initiative, which recorded 67.8 million registered bank customers by December 2025, up from 63.5 million in 2024.

Despite this growth, a large share of Nigeria’s adult population,especially those in rural and informal sectors,remains outside the digital identity net, limiting access to banking, healthcare, social interventions and other critical services.

Dr. Olasiyan noted that the absence of strong identity systems continues to fuel fraud and weaken trust in digital services.

Figures from the Nigeria Inter-Bank Settlement System (NIBSS) show that digital fraud losses reached about ₦52.26 billion in 2024, before dropping sharply to ₦25.85 billion in 2025 following stricter identity verification and stronger data standards.

He said the decline demonstrates the direct impact that robust identity systems can have on reducing financial crime.

The report highlighted emerging technologies such as those developed by Identy.io, which uses contactless, on-device biometric authentication to verify users without storing sensitive data in centralized databases.

Unlike traditional identity systems, the technology processes biometric data directly on users’ devices, reducing exposure to mass data breaches while improving privacy and security.

The company’s system is also compliant with the Modular Open Source Identity Platform (MOSIP), which Nigeria began adopting in July 2025 as part of efforts to modernize the National Identity Management Commission’s infrastructure under the World Bank-backed ID4D programme.

With over 121 million residents already issued National Identification Numbers (NIN), the report stressed that the next challenge for Nigeria is reaching excluded populations, including women, persons with disabilities, rural communities and displaced persons.

Dr. Olasiyan argued that technologies capable of working offline and on basic smartphones will be essential to extending identity coverage into low-connectivity areas.

He further maintained that secure digital identity systems would not only strengthen cybersecurity and reduce fraud, but also lower infrastructure costs, reduce reliance on foreign vendors and improve Nigeria’s data sovereignty.

According to him, digital identity is no longer just an administrative tool but a strategic national asset that will determine whether Nigeria can fully unlock the benefits of digital finance, e-commerce, healthcare delivery and public service reform.

“Nigeria’s ambition to build a globally competitive digital economy is clear,” he said, adding that sustainable growth will depend on embedding secure, privacy-driven and inclusive identity systems at the centre of national development.