INVESTMENT IN INFORMATION AND COMMUNICATION TECHNOLOGY (ICT): A SOCIAL OVERHEAD CAPITAL FOR IMPROVING FINANCIAL SECTOR DEEPENING IN NIGERIA

Abstract

Theme 1 Theme 2 Theme 3 This paper follows directly from Technical Paper 1.1, "BigFintechs and their Impact on Sustainable Development" , which examines the positive and negative impacts of BigFintech (BFT) activities across the full spectrum of the Sustainable Development Goals (SDGs), particularly with regard to Least Developed Countries (LDCs). This paper serves as an extension of the analysis, specifically on the findings with regard to SDG 16 (peace, justice and strong institutions) to focus on the macroeconomic impact of BFT actors and activities on LDCs. To accomplish the extended analysis, we first address the limitations in bridging BFT activity, SDG indicators and LDC macroeconomic policy impacts. We draw upon the outline of the complex and opaque supply chains, expanding service offerings across multiple business verticals and the complex ecosystem models that amplify BFT impacts for LDCs as outlined in Technical Paper 1.1. We discuss the key barriers in advancing the analysis including the limitations of the frameworks, tools, indicators and data, to measure the macroeconomic impacts particularly within the LDC context. Our findings demonstrate that the current narrative 'digital economy' sees digital growth, maturity and market penetration in LDCs largely as positive developments. However, it fails to address the potential for adverse impacts on LDCs specifically owing to BFTs' complex models and business activities. We then outline the regulatory challenges related to BFT across multiple factors including the cross-border nature of BFT ecosystems and activities, the narrow scope of those digital services, the limitations of foreign exchange rules and taxation classification. 2