Five years after acquiring Capricorn Digital and its Baxi agent network, Onafriq is closing down its Nigerian agent banking business. The pan-African digital payments company, which operates across 40 countries, announced the shutdown on Friday, citing a strategic review that found the offline model no longer viable.
The economics tell the story clearly. In 2024, the naira lost roughly 129% of its value, settling at around 1,479 naira to the dollar. Nigeria's inflation rate hit 34.8% in December of that year. For a business built on a large physical agent network, those numbers meant operating costs kept climbing while margins kept shrinking. Add to that the rapid growth of instant account-to-account payments, and the case for maintaining an offline agent network became very hard to make.
When Onafriq acquired Capricorn Digital in October 2021, the ambition was real. Baxi had more than 90,000 agents at the time and had processed over 1.6 billion dollars in transactions that year alone. It was Onafriq's entry point into a market still heavily tied to cash and branch-based banking. Founder and CEO Dare Okoudjou was candid in his statement: "We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for."
The closure affects employees tied to the Baxi operation, though Onafriq has not disclosed how many people are impacted. Agents have been transitioned to another principal bank and have 30 days to move their funds to a bank of their choice. Onafriq is not leaving Nigeria entirely. The company will continue operating as a Payment Solution Service Provider, keeping its payments network and card issuing services active in the country.
The Baxi story raises a question that other fintech players building on Nigeria's physical infrastructure will need to sit with: when the macro environment shifts this sharply, how long can an offline-first model hold?
Originally published by TechCabal.