Onafriq, the pan-African payments company, is winding down its Baxi agent banking business in Nigeria after currency depreciation, inflation and
Onafriq, the pan-African payments company, is winding down its Baxi agent banking business in Nigeria after currency depreciation, inflation and intensifying competition undermined the economics of its offline payments operations.
The decision marks a retreat from a business the company acquired in 2021 and invested in expanding through 2023, as changes in customer payment behaviour and rising operating costs weakened the sustainability of its agent banking model.
In a statement on Friday, Onafriq said the operating environment changed significantly from 2024, with the depreciation of the naira and broader macroeconomic pressures affecting transaction volumes, operating expenses and the viability of the business.
The rapid growth of instant account-to-account payments also changed the mix of transactions conducted through agents’ point-of-sale (POS) terminals, while increased competition compressed margins across the segment.
“Following a review of its long-term strategy and the sustainability of the business, the Group concluded that winding down the agent banking operation is the right course of action,” the company said.
Read also: Nigeria does not need more startups doing the same thing. It needs more original ideas
Onafriq entered Nigeria’s agent banking market through the acquisition of Baxi, also known as Capricorn Digital Limited, in 2021. The company said it invested heavily in strengthening and expanding the agent network through 2023, reflecting its belief that agent banking could widen financial access and digitise cash-based transactions.
However, the subsequent deterioration in operating conditions prompted a reassessment of the business model.
Dare Okoudjou, founder and chief executive officer of Onafriq, said the company had not achieved the outcome it expected from the Nigerian agent banking operation.
“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Okoudjou said, describing the closure as a difficult decision affecting employees, agents and business partners who helped build the Baxi network.
The wind-down will affect employees whose roles are connected to the agent banking business. Onafriq said it would consult affected staff and provide support during the transition.
Agents onboarded through the Baxi payments platform have been transitioned to another principal bank. The company has also asked agents to transfer their funds to their preferred principal bank within 30 days, adding that its teams would provide assistance throughout the process.
Read also: Safaricom ownership dispute deepens as Vodacom holds 55% stake pending Kenya appeal
Despite the closure, Onafriq said it was not exiting Nigeria. The company plans to continue serving the market as a Payment Solution Service Provider through its payments network and card-issuing services.
The decision reflects a shift in the company’s Nigerian operations away from directly running an offline agent banking business towards its broader payments infrastructure and card services.
Onafriq said its wider group remained strong, supported by continued growth in its cross-border payments network and card-issuing operations.
The company did not disclose the number of employees or agents affected by the closure, the financial performance of Baxi or the timeline for completing the wind-down.
Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.