When Onafriq announced it was shutting down Baxi, its Nigerian agent banking business, on October 16, it marked the end of a five-year expansion effort that began when the company acquired one of Nigeria’s largest independent agent banking networks. But months before announcing the closure, the pan-African payments company had been negotiating a sale of Baxi.

The proposed sale, which covered the entire agency banking operation active only in Nigeria, remained unresolved as of July, according to Onafriq’s audited financial statements filed in the United Kingdom.

In the statement announcing Baxi’s closure, the company cited inflation, naira depreciation, rising operating costs, shrinking margins, and growth in alternative payment methods such as account-to-account (A2A) transfers, which weakened offline payments. It said the economics of running an offline agent network had become unsustainable.

Onafriq’s statement did not mention the prospective buyer or the status of the negotiations. As of July 29, when the accounts were approved, negotiations were still ongoing, and Onafriq said it could not reliably estimate the structure, timing, or financial impact of a sale.

“During 2026, Onafrıq Nigeria Payments Limited entered into a non-binding memorandum of terms with a purchaser in respect of the proposed divestment of the agency business,” the company said in the financial statements. “The proposed transaction contemplates the sale of 100% of the agency business and related operations, subject to the terms and conditions to be agreed between the parties in a definitive asset purchase agreement.”

By then, the business had already suffered a sharp financial decline. Onafriq’s agency services revenue fell 56% to $13.4 million in 2024, from $30.4 million the previous year. The company also wrote off the remaining $4.56 million in goodwill tied to its Nigerian payments business, reflecting a decline in the value it expected to recover from the investment.

The attempted sale reversed the strategy that brought Onafriq into Nigeria. The company had acquired Baxi to connect a vast network of cash-based agents to its pan-African payments infrastructure. 

Five years later, it was looking for an acquirer to take over that network. By October, it was telling Baxi’s agents—over 460,000 as of 2025—to move their funds elsewhere.

An unfinished sale

Baxi’s declining revenue was only part of its financial troubles. Although Onafriq cut agency services costs from $17 million in 2023 to $8.7 million in 2024, gross profit fell even faster, declining by 65% from $13.4 million to $4.7 million, according to its financial report.

The group’s agency business generated about $35 in gross profit for every $100 in revenue in 2024, down from $44 the previous year. That left considerably less money to cover salaries, technology, and other operating expenses.

By the time Onafriq began negotiating a sale in 2026, its agency services generated substantially less gross profit than they did two years earlier. The business also operated company-owned point-of-sale (PoS) terminals and provided short-term credit to agents whose wallet balances were running low.

According to Onafriq, agents typically had one to seven days to repay the loans, with interest rates ranging from 2.5% to 7% for each loan. The company funded the credit from its own resources, assessed agents’ creditworthiness, and collected repayments and managed defaults.

In July 2026, Onafriq said its Nigerian subsidiary, Onafriq Nigeria Payments Limited, owed ₦13.8 billion ($10.4 million) to Zenith Bank, a Nigerian tier-1 lender, and ₦6.1 billion ($4.6 million) to Stanbic IBTC Bank, a mid-tier bank, in outstanding overdrafts, bringing the total to ₦19.9 billion ($15 million), its filings showed.

“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Dare Okoudjou, Onafriq’s founder and chief executive officer, said in the statement announcing Baxi’s shutdown in Nigeria.

The economics behind Baxi’s retreat

Onafriq had already begun writing down the value of its Nigerian payments business before Baxi’s shutdown. It wrote off $2.4 million in goodwill in 2023 and the remaining $4.56 million in 2024, according to its filings.

Goodwill is the extra value recorded when a company buys a business, beyond the value of its identifiable net assets. The write-offs meant Onafriq no longer expected the business’s future earnings to justify that extra value.

However, other parts of Onafriq’s group-wide business were performing better. Revenue from money transfer fees grew by 20% to $43.9 million in 2024. The group’s card fee revenue also jumped 22%.

The contrasting performance helps explain why Onafriq retained its payments network and card-issuing services while closing Baxi. Yet, Nigeria’s wider PoS market presented a more complicated picture.

According to the Nigeria Inter-Bank Settlement System (NIBSS), the country’s payments switch, PoS transactions’ value rose 79% to ₦18.78 trillion ($14.1 billion) in the first quarter of 2026. The number of deployed PoS terminals had more than doubled, from 2.45 million at the end of 2023 to 5.56 million at the end of 2024.

But the growth in transaction value concealed a much slower increase in the number of payments. In 2024, NIBSS data showed PoS transaction volumes rose by just 8%, from 1.4 billion to 1.5 billion, even as deployed terminals increased by 127%.

The number of terminals was expanding much faster than the transactions passing through them. For agent banking providers, more devices in the market meant greater competition for customers, without a corresponding increase in the number of transactions from which they could earn commissions.

Competition was also coming from much larger operators. Moniepoint, one of Baxi's rivals, already had over 800,000 PoS terminals in Nigeria at the end of 2024. By 2026, the number had grown to over one million active PoS terminals in the country. 

The Nigerian fintech unicorn said it served over six million businesses in 2025, underscoring the scale of the networks Baxi was competing against, which made its business hard to justify.

From expansion to exit

Onafriq entered Nigeria's agent banking market in October 2021, when the company, then known as MFS Africa, announced its acquisition of Capricorn Digital Limited, the company behind Baxi. The deal was completed in March 2022 after receiving the Central Bank of Nigeria's (CBN) approval.

At the time, Baxi had more than 90,000 agents providing cash withdrawals, transfers, and bill payments. The network processed over $1.6 billion in transactions in 2021, making it one of Nigeria's largest independent agent banking networks.

The acquisition was intended to connect Baxi's physical distribution network to MFS Africa's cross-border payments infrastructure. In June 2022, the company also secured debt financing from Stanbic IBTC Bank to support Baxi's expansion.

Five years later, Onafriq is dismantling that strategy. Following the shutdown, it said it had transferred Baxi's agents to another principal bank and given them 30 days to move their funds to a principal bank of their choice.

Onafriq will continue operating in Nigeria through its payments network and card-issuing services, but without the agent banking business it acquired to establish a foothold in the country's offline payments market.

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