Pan-African fintech firm Onafriq announced it will exit Nigeria’s Baxi agent banking operations after five years, blaming naira weakness, surging costs, and fierce rivalry for shrinking profits in that segment.
Economic Pressures and Market Shifts
The shutdown affects agent banking operations conducted through Baxi under Onafriq Nigeria Payments Limited, but the company is maintaining its cross-border payments network and card issuing services in Nigeria.
According to Onafriq, changes in Nigeria’s operating environment since 2024 have significantly altered the economics of its offline agent banking business, making the existing model unsustainable. The company attributes the decision to macroeconomic pressures and structural changes in the country’s payments industry.
Naira depreciation and inflation have reduced transaction volumes while increasing operating expenses, undermining the sustainability of agent banking operations. The growing adoption of instant account-to-account transfers has shifted transaction patterns, while heightened competition among payment service providers has further pressured margins.
Strategic Retreat and Continued Commitment
The move represents a strategic shift for Onafriq, which entered Nigeria’s agent banking market in 2021 through the acquisition of Baxi, also known as Capricorn Digital Limited. The company continued investing in the business through 2023 before determining its long-term prospects and financial sustainability were unviable.
Dare Okoudjou, founder and CEO of Onafriq, called the decision to close the business difficult, citing the contributions of employees, agents and partners who helped build the Baxi network.
“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for. Closing this business was a difficult decision to arrive at, one that affects colleagues, agents, and business partners across Nigeria who poured their hearts and soul into building out the Baxi network,” Okoudjou said.
Transition Process and Worker Support
As part of the transition, Onafriq has moved agents onboarded through the Baxi platform to another principal bank to facilitate continuity. The company directed agents to transfer their funds to their preferred principal bank within 30 days, offering support throughout the process.
Employees whose roles are linked to the agent banking business will be consulted and supported during the wind-down, with Onafriq pledging to treat affected workers fairly. The company emphasized that the decision reflects a reassessment of long-term strategy rather than a withdrawal from Nigeria.
