Nigeria has over 122 million internet users, Africa’s most active fintech sector, and a digital economy growing faster than almost anywhere else on the continent. But according to Microsoft’s Chief Security Advisor for Africa, Kerissa Varma, all of that progress is sitting on a foundation that is becoming increasingly fragile: trust.
Varma said trust is no longer a soft reputational asset but the critical infrastructure of the digital economy, and the factor that will determine whether Nigeria’s digital momentum translates into lasting, inclusive growth.
The data Varma cites makes the concern concrete. The Global Anti-Scam Alliance’s State of Scams in Nigeria 2026 report revealed that 84 percent of surveyed adults encountered a scam in the past year. Alarmingly, 22 percent suffered financial or data loss, yet only four percent reported incidents to authorities.
That four percent reporting figure is the part that should worry everyone. When only one in every 25 victims reports what happened to them, the true scale of fraud remains invisible to the institutions trying to fight it. This under-reporting weakens system-wide visibility and emboldens fraudsters.
The Central Bank of Nigeria’s Financial Stability Report 2024 recorded a 45 percent surge in financial fraud cases in a single year, with 70 percent of losses traced to digital channels. Governor Olayemi Cardoso warned that these developments pose major risks to consumer confidence, financial integrity, and Nigeria’s global reputation.
The most technically alarming part of Varma’s assessment is about identity. Fraudsters are increasingly exploiting genuine credentials rather than attempting crude break-ins. Microsoft’s 2025 Digital Defence Report confirms that attackers are logging in rather than breaking in.
Artificial intelligence has made this significantly easier and cheaper. AI-generated identity documents surged by 195 percent, while AI-driven phishing campaigns are now three times more effective than traditional ones. Deepfake incidents in Africa rose sevenfold in 2024, enabling fraudsters to manipulate biometric data and fabricate identities.
A 195 percent jump in AI-generated fake identity documents is not a gradual trend. It is a step change in how fraud operates, and it directly undermines the biometric verification systems that Nigerian banks, fintechs, and the SIM card registration framework were built around.
The Nigeria Inter-Bank Settlement System identifies social engineering as the most prevalent fraud technique, alongside SIM swap fraud, account compromise, and phishing. Cybersecurity firm Surfshark reported more than 150,000 compromised Nigerian accounts in the first half of 2025 alone.
INTERPOL’s Africa Cyberthreat Assessment found that business email compromise has become the most financially damaging cyber threat on the continent, while 90 percent of African countries admitted needing significant improvement in law enforcement capacity.
Varma’s assessment is not entirely bleak. Nigeria has made measurable progress on fraud reduction that deserves recognition alongside the warnings.
NIBSS data shows that digital payment fraud losses fell to N25.85 billion in 2025, a 51 percent decline from 2024. Fraud incidents dropped steadily from 123,918 in 2021 to 67,518 in 2025.
This success is attributed to stronger coordination among banks, fintechs, and consumers, with joint industry action preventing around N20 billion in potential losses in a single year.
That is a significant achievement. Cutting fraud losses in half in a single year, while the number of internet users and digital transactions is growing, shows that coordinated industry action can produce real results when it is sustained.
One finding Varma highlighted deserves particular attention for Nigerian regulators and financial institutions. NIBSS noted that under-reporting fell by 34 percent in late 2025.
On the surface, fewer people reporting fraud sounds like good news. But in the context of fraud fighting, it creates a dangerous blind spot. Institutions cannot identify patterns, track criminal networks, or allocate enforcement resources effectively if victims stay silent. Every unreported incident is data that never reaches the people trying to stop the next one.
The four percent reporting rate from the Global Anti-Scam Alliance survey makes this even more concerning. If 96 out of every 100 scam victims say nothing to authorities, Nigeria’s fraud response is operating with almost no visibility into the true scale of the problem.
Varma said addressing this requires investment in adaptive, real-time fraud detection, stronger digital identity verification, phishing-resistant authentication, and deeper intelligence-sharing across sectors and borders. It also demands transparency, open communication when incidents occur, and vigilance against under-reporting.
The intelligence-sharing point is significant. Several recent reports from ngCERT, INTERPOL, and Nigerian cybercrime prosecutors have all pointed to the same gap: banks, telecoms, and law enforcement agencies each sitting on their own data without sharing it in real time, which allows criminals to move faster than any single institution can track.
Varma said Nigeria’s digital economy is at a crossroads, and that the businesses, banks, fintechs, platforms, and public institutions that prioritise trust will not only reduce fraud but also earn the loyalty of digitally engaged Nigerians.
This framing reframes cybersecurity from a compliance cost into a competitive advantage. In a market where 84 percent of adults were approached by a scammer last year, the institution that demonstrably keeps its customers safer will attract and keep more of them. Trust, in that context, is not a soft concept. It is a growth strategy.
Nigeria has done the hard work of building the digital economy itself. The subscriber numbers are there. The fintech ecosystem is there. The transaction volumes are there. What the Microsoft report makes clear is that the security layer underneath all of that still needs significant strengthening. AI-generated fake IDs, deepfakes beating biometric checks, and a 96 percent non-reporting rate are not problems that will solve themselves as the economy grows. They are problems that will scale with it if they are not addressed directly and urgently.
