Onafriq tried to sell its Nigerian agent banking business before shutdown

The collapse of Onafriq’s Baxi agent‑banking arm is not a tidy exit from a failed venture; it is a gut‑shaking reminder that Nigeria’s cash‑centric economy is still in flux, and that even the biggest tech players can be blindsided by currency swings and shifting consumer habits.

Baxi’s network boasted over 460,000 agents in 2025, each a small‑scale entrepreneur who relied on daily cash inflows to keep their pockets full. When Onafriq announced the shutdown on October 16, those agents were suddenly told to “move their funds elsewhere.” The ripple effect is clear: families depending on those micro‑transactions, local shops that counted on daily cash, and the informal economy that thrives on instant, low‑friction payments. For many, Baxi was more than a service; it was a lifeline.

Onafriq blamed a cocktail of inflation, naira depreciation, and rising operating costs for the unsustainable economics of offline agent networks. Inflation erodes the purchasing power of cash that agents accept, while a weaker naira makes the cost of maintaining a physical presencerent, utilities, staff wagesskyrocket. The company’s audited statements show a 56 % drop in agency services revenue to $13.4 million in 2024 from $30.4 million the year before. That decline is not just numbers; it signals a shrinking market for cash‑based payments as Nigerians increasingly adopt account‑to‑account transfers.

Months before the closure, Onafriq entered a non‑binding memorandum of terms with a prospective buyer, aiming to divest 100 % of the Nigerian agency business. Yet the sale never materialised. The financial statements admitted that “the proposed transaction contemplates the sale of 100 % of the agency business…subject to the terms and conditions to be agreed between the parties in a definitive asset purchase agreement.” By July 29, negotiations were still ongoing, and the company could not estimate the structure, timing, or financial impact. This ambiguity turned a strategic exit into a chaotic shutdown, leaving agents and customers in limbo.

Onafriq’s original entry into Nigeria was a notable step: acquiring one of the country’s largest independent agent banking networks to plug cash‑heavy users into a pan‑African payments platform. Five years later, the same network became a liability. The company cut agency services costs from $17 million in 2023 to $8.7 million in 2024, yet gross profit fell even faster, dropping 65 % from $13.4 million to an even lower figure. The write‑off of $4.56 million in goodwill underscores that the value investors once saw has evaporated.

The Baxi saga is a warning for other fintechs eyeing cash‑heavy markets. It shows that a once‑profitable offline channel can be eroded by macro‑economic forces and digital disruption. For investors, it signals that the “offline” label may be a misnomer; the line between digital and physical payments is blurring, and companies must adapt or fold.

Prediction: Within the next six months, we will see a surge in alternative payment platforms in Nigeria, as businesses scramble to replace the lost Baxi infrastructure. The market will likely consolidate around a few tech‑heavy players who can offer hybrid solutions that blend cash and digital.

In short, Baxi’s shutdown is a stark reminder that the Nigerian payments landscape is still a minefield, and that even the biggest names can misjudge the tide. The agents left behind will have to reinvent themselves, and the industry must learn that offline is no longer a safe harbor.