Onafriq, a pan-African payments company, is set to discontinue its Baxi agent banking business in Nigeria after five years, citing naira depreciation, rising operating costs and intensifying competition that have weakened the segment’s profitability.
The planned shutdown will affect the agent banking operations conducted through Baxi under Onafriq Nigeria Payments Limited. However, the decision does not signal the company’s withdrawal from Nigeria, as it intends to retain its cross-border payments network and card issuing services in the country.
In a statement, Onafriq said changes in Nigeria’s operating environment since 2024 had significantly altered the economics of its offline agent banking business, making the existing model unsustainable.
The move marks a strategic shift for the company, which entered Nigeria’s agent banking market to expand access to financial services through a network of agents providing transaction services outside traditional bank branches.
Onafriq attributed the decision to a combination of macroeconomic pressures and structural changes in the country’s payments industry.
According to the company, naira depreciation and inflation have affected transaction volumes, increased operating expenses and undermined the sustainability of its agent banking operations.
The growing adoption of instant account-to-account transfers has also changed the mix of transactions handled by agents, while heightened competition among payment service providers has put further pressure on margins.
These developments have made it increasingly difficult for the business to remain viable under its existing operating structure, prompting the company to reassess its long-term strategy.
Dare Okoudjou, founder and chief executive officer of Onafriq, said the decision to close the business was difficult, particularly given the efforts of employees, agents and business 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.
Despite the closure, he reaffirmed the company’s commitment to the Nigerian market, noting that the group would continue to serve customers through its payments network and card issuing operations.
Onafriq entered Nigeria’s agent banking market in 2021 through the acquisition of Baxi, also known as Capricorn Digital Limited. The company said it continued investing in the business through 2023, with efforts focused on expanding and strengthening its agent network.
However, a subsequent review of the business’s long-term prospects and financial sustainability led to the decision to wind down the operation.
As part of the transition, Onafriq said agents onboarded through the Baxi platform had been moved to another principal bank, a step intended to facilitate continuity for the affected agents.
The company has also directed agents to transfer their funds to their preferred principal bank within 30 days, adding that its teams would provide support throughout the transition process.
Employees whose roles are linked to the agent banking business will also be consulted and supported during the wind-down, with Onafriq pledging to treat affected workers fairly.
