Onafriq will close Baxi, its agent banking operation in Nigeria, after five years, due to economic strain and changing customer preferences. The move comes after an internal assessment determined the physical agent network could no longer remain profitable. Onafriq, which operates across 40 African countries, described the decision as part of a broader review of its long-term strategy and sustainability for the business.
Economic pressures drove the decision, with the company citing soaring inflation, currency depreciation, and increased expenses as key factors. The naira lost 129% of its value in 2024, reaching ₦1,479 per dollar, while Nigeria’s inflation peaked at 34.8% in December. These conditions made maintaining a nationwide agent network financially unsustainable, despite it having been central to Onafriq’s expansion plans. The company also noted rising operating costs, lower trading volumes, and margin pressure as contributing factors, alongside the rapid growth of instant account-to-account payments.
Baxi began operations in 2021 when Onafriq acquired Capricorn Digital, which managed over 90,000 agents handling more than $1.6 billion in transactions that year. The service aimed to serve Nigeria’s largely cash-reliant population by providing cash deposits, withdrawals, and other financial services through a vast network of physical agents. The acquisition was Onafriq’s entry into a market where cash remained dominant, and the plan was to connect Nigeria’s offline payments ecosystem to MFS Africa’s cross-border payments infrastructure. Baxi’s agents provided cash-in and cash-out services, account opening, money transfers, and bill payments, serving as the backbone of the company’s offline financial services.
By mid-2024, Nigerians conducted 11.6 billion internet-based transfers, far outpacing the 6.3 billion point-of-sale transactions recorded. Rivals such as Moniepoint, OPay, and PalmPay expanded their reach, reducing the need for traditional agent-based banking. The growing preference for digital transactions made it increasingly difficult to justify the costs of sustaining a large physical network. Onafriq acknowledged that while it entered Nigeria with conviction and commitment, it did not achieve the outcome it set out for.
Dare Okoudjou, Onafriq’s founder and CEO, admitted the challenges in a statement. “We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” he said. The company will transfer Baxi’s agents to another principal bank and assist affected employees during the transition. Onafriq has also committed to supporting agents and stakeholders as the business winds down, including providing guidance on moving their funds to their preferred principal bank within 30 days.
Though Baxi is shutting down, Onafriq will retain its presence in Nigeria as a Payment Solution Service Provider, focusing on its broader payment infrastructure and card issuance services. The company emphasized that this decision is confined to the agent banking business and does not represent an exit from the Nigerian market. Onafriq’s broader operations, including its cross-border payments network and card issuing services, remain strong and continue to grow.
