The Chairman of the Alliance for Economic Research and Ethics, Dele Oye, has raised concern over the growing burden of high-interest digital loans in Nigeria, noting that poor and vulnerable Nigerians are being trapped in a cycle of debt by digital lending platforms charging more than 300 per cent interest yearly.
Oye, in a statement titled “The Mathematics of Marginalisation: Decoding Nigeria’s Poverty Premium,” said Nigeria’s economic system was increasingly penalising poor citizens, forcing them to pay more for necessities such as food, healthcare, housing and access to credit.
He called on the Central Bank of Nigeria (CBN) and relevant regulatory authorities to enforce interest rate caps on digital loans and strengthen consumer protection measures to prevent exploitative lending practices.
Oye noted: “In the complex economic landscape of Nigeria, a brutal mathematical reality persists; it is profoundly expensive to be poor. This phenomenon, known as the poverty premium, ensures that individuals with the least liquidity systematically pay the highest rates for basic goods, services, and credit. Far from being a mere emotional burden, poverty operates as an extractive economic mechanism.
“Recent data from the World Bank indicates that 41.82 per cent of Nigerians live below the international poverty line of $3.00 per day, while 47.03 per cent experience multidimensional poverty. When 140 million people navigate an economy that penalises scarcity, the resulting financial extraction is not an individual failure but a systemic design flaw.”
According to him, many financially excluded Nigerians who lack access to affordable bank credit are turning to digital loan applications, where excessive interest charges and hidden fees often worsen their financial struggles.
The report cited cases where borrowers obtained N65,000 loans but were required to repay N93,000 within seven days, with penalties increasing the debt to as much as N158,000 after default.
Oye said such practices had created a poverty trap, where those with the least financial resources often pay the highest costs for survival.
Oye stated that poor Nigerians are unable to benefit from economies of scale because they often buy food items in smaller quantities, resulting in higher prices compared with wealthier households who can purchase in bulk.
He also raised concerns about healthcare costs, noting that the inability to afford preventive treatment often forces poor families to delay medical attention until conditions become more expensive to manage.
He said: “The fundamental disadvantage of low income is the inability to access economies of scale. Wealthier households purchase commodities in bulk, such as a 50kg bag of rice that lasts several months.
In contrast, low-income earners are forced to purchase micro-units daily from roadside vendors or open markets. “These micro-transactions carry significant markups.
Meanwhile, Nigeria could forfeit an estimated $88 billion economic boost expected from full digital inclusion by 2030 unless persistent barriers to broadband expansion, affordable connectivity and digital access are addressed, stakeholders have warned.
The warning comes as industry leaders said that despite more than two decades of private investment that expanded Nigeria’s telecommunications sector from fewer than 500,000 telephone lines before GSM liberalisation to over 200 million active subscriptions, millions of Nigerians, particularly in rural communities and small businesses, remain underserved because of infrastructure, policy and affordability challenges.
Speaking at the Nigeria Information Technology Reporters’ Association (NITRA) Innovative and Scientific Conference in Lagos, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said sustaining investment and bridging the digital divide depend on tackling multiple taxation, inconsistent Right-of-Way policies, infrastructure vandalism, rising energy costs, foreign exchange volatility and affordability constraints.
“Telecommunications is no longer simply an industry; it is the foundation upon which Nigeria’s digital future is being built. Every investment in resilient telecommunications infrastructure is an investment in economic growth, innovation, national security and inclusive development,” he said.
He said improving service quality requires more than holding operators accountable, as unreliable electricity, fibre cuts, insecurity, infrastructure vandalism, Right-of-Way delays and multiple taxation continue to undermine network performance.
He said operators should not become “convenient scapegoats” for disruptions caused by failures across the broader operating environment.
Adebayo said transporting broadband capacity beyond Lagos remains a major obstacle to nationwide connectivity, with Right-of-Way charges accounting for as much as half of fibre deployment costs in some states. Although some states declare permits free, he said development and infrastructure fees often increase deployment costs. He called for a review of Nigeria’s broadband access policy, wider fibre penetration and greater infrastructure sharing.