Onafriq to Exit Nigeria’s Agent Banking Business Over Rising Costs, Competition

By Adedapo Adesanya

Pan-African technology company Onafriq has announced plans to wind down its agent banking business in Nigeria, operated under the Baxi brand by Onafriq Nigeria Payments Limited, citing inflation, Naira depreciation and intensifying competition.

The company said economic pressures had raised operating costs and affected transaction volumes, while the rapid growth of instant account-to-account payments had changed the mix of transactions processed by point-of-sale (PoS) agents.

It added that tighter margins and increased competition had further weakened the sustainability of its agent banking operations.

Onafriq entered Nigeria’s agent banking market in 2021 through the acquisition of Baxi, also known as Capricorn Digital Limited, and invested in the business through 2023 to strengthen and expand its agent network.

“This investment reflected the group’s belief in agent banking’s role in expanding financial access and digitising cash-based transactions,” the company said in a statement.

However, it said operating conditions changed significantly from 2024, prompting a review of the long-term strategy and sustainability of the business.

The chief executive of Onafriq, Mr Dare Okoudjou, said the company entered the Nigerian market “with conviction and commitment” but did not achieve its expected results.

“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,” he said.

Mr Okoudjou added that the company remained committed to ensuring “honesty, fairness, and a well-managed transition” for those affected.

The planned closure will affect employees whose roles are linked to the agent banking business.

Onafriq said it would consult affected employees individually and provide support throughout the transition.

The tech firm also disclosed that agents using the Baxi payments platform had been transferred to another principal bank, advising them to move their funds to a principal bank of their choice within 30 days.

“Onafriq’s teams are available to provide support and guidance throughout the process,” the statement said, adding that it would honour its commitments to affected stakeholders and maintain open communication during the transition.

Despite the planned closure, Mr Okoudjou said the decision was limited to the agent banking business and did not signal the company’s exit from Nigeria.

“Nigeria remains central to our mission, and we will continue to serve the market as a Payment Solution Service Provider through the Onafriq payments network and our card issuing services,” he said.

Onafriq said it would focus on integrating its payments network and card-issuing services into Nigeria’s financial ecosystem.