Months before announcing the closure of Baxi, its Nigerian agent banking business, on October 16, Onafriq was already looking for a buyer. The move marked a reversal of a strategy that began five years earlier, when the pan-African payments company acquired one of Nigeria’s largest independent agent banking networks.
According to Onafriq’s audited financial statements filed in the United Kingdom, negotiations for the sale of Baxi’s entire Nigerian agency banking operation were still ongoing as of July 2026.
When it announced the shutdown, Onafriq pointed to inflation, the naira’s depreciation, rising operating costs, shrinking profit margins, and the growing use of account-to-account (A2A) transfers. These alternatives had put pressure on traditional cash-based transactions, making it increasingly difficult to sustain an offline agent network.
The company did not disclose the identity of the prospective buyer or explain whether the negotiations had ended. Its financial statements, approved on July 29, said it was unable to reliably estimate the timing, structure, or financial impact of the proposed 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 its filings.
The proposed deal covered 100% of the agency business and related operations, subject to the parties agreeing on the terms of a definitive asset purchase agreement.
By then, Baxi’s financial performance had deteriorated significantly. Revenue from agency services fell 56% to $13.4 million in 2024, down from $30.4 million in 2023. Onafriq also wrote off the remaining $4.56 million in goodwill associated with its Nigerian payments business, signalling that it no longer expected to recover the value previously attributed to the investment.
Onafriq had acquired Baxi to connect Nigeria’s large network of cash-based agents to its pan-African payments infrastructure. Five years later, it was seeking a buyer for that network.
By October, the company was instructing Baxi’s more than 460,000 agents, according to figures from 2025, to move their funds elsewhere.
An unfinished sale amid mounting losses
Falling revenue was only one part of Baxi’s financial troubles. Although Onafriq reduced agency services costs from $17 million in 2023 to $8.7 million in 2024, gross profit fell by 65%, from $13.4 million to $4.7 million, according to its financial statements.
In practical terms, the business generated about $35 in gross profit for every $100 in revenue in 2024, down from $44 a year earlier. That left less money to cover salaries, technology, and other operating expenses.
By the time Onafriq began negotiating a sale in 2026, its agency business was generating considerably less profit than it had two years earlier.
Baxi also operated company-owned point-of-sale (PoS) terminals and provided short-term loans to agents whose wallet balances were running low. The loans typically had repayment periods of one to seven days, with interest rates ranging from 2.5% to 7% per loan, according to Onafriq.
The company financed the loans from its own resources, assessed agents’ creditworthiness, collected repayments, and managed defaults.
Its Nigerian subsidiary also had substantial outstanding bank obligations. In July 2026, Onafriq Nigeria Payments Limited reported ₦13.8 billion ($10.4 million) in overdrafts owed to Zenith Bank and ₦6.1 billion ($4.6 million) owed to Stanbic IBTC Bank. The combined amount stood at ₦19.9 billion ($15 million), according to the filings.
“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 closure.
Why Baxi became harder to sustain
Onafriq had begun writing down the value of its Nigerian payments business before the shutdown. It recorded a $2.4 million goodwill impairment in 2023 and wrote off the remaining $4.56 million in 2024.
Goodwill represents the additional value attributed to a business acquisition beyond the value of its identifiable net assets. Writing it off indicates that the company no longer expects the investment to deliver enough future economic benefits to justify that recorded value.
Meanwhile, other parts of Onafriq’s business were growing. Revenue from money transfer fees increased by 20% to $43.9 million in 2024, while revenue from card fees rose by 22%.
The contrasting results help explain why the company could retain its broader payments network and card-issuing services while exiting agent banking.
However, Nigeria’s wider PoS market tells a more complicated story. The market was expanding, but that growth did not necessarily translate into better returns for every operator.
According to the Nigeria Inter-Bank Settlement System (NIBSS), the value of PoS transactions rose by 79% to ₦18.78 trillion ($14.1 billion) in the first quarter of 2026. The number of deployed PoS terminals had also more than doubled, increasing from 2.45 million at the end of 2023 to 5.56 million at the end of 2024.
But transaction volumes grew much more slowly than the number of terminals. NIBSS data reported by Nairametrics showed that PoS transaction volumes increased by just 8% in 2024, from 1.4 billion to 1.5 billion, while terminal deployment grew by 127%.
In other words, terminals were entering the market much faster than transactions were increasing. For agent banking operators, this meant more devices competing for customers without a comparable rise in the number of transactions generating commissions.
Competition was also intensifying. Moniepoint, one of Baxi’s major rivals, had more than 800,000 PoS terminals in Nigeria at the end of 2024. By September 2026, its network had grown to more than one million active terminals, according to a report by TechCabal.
The fintech company also said it served more than six million businesses in 2025. That scale highlights the challenge facing smaller or less profitable operators competing for merchants, transactions, and agent loyalty.
For Baxi, the combination of declining revenue, weaker margins, growing competition, and pressure from alternative payment methods made the business increasingly difficult to justify.
From expansion to exit
Onafriq entered Nigeria’s agent banking market in October 2021, when it was still known as MFS Africa. The company announced its acquisition of Capricorn Digital Limited, the business behind Baxi, and completed the deal in March 2022 after receiving approval from the Central Bank of Nigeria (CBN).
At the time, Baxi had more than 90,000 agents offering services such as cash withdrawals, money transfers, and bill payments. Its network processed more than $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 network to MFS Africa’s cross-border payments infrastructure, allowing the company to extend its reach into Nigeria’s cash-driven payments market.
In June 2022, MFS Africa also secured debt financing from Stanbic IBTC Bank to support Baxi’s expansion.
Five years later, that strategy has come to an end. Following the shutdown announcement, Onafriq 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.
The closure does not mark Onafriq’s complete exit from Nigeria. The company will continue operating in the country through its payments network and card-issuing services, but it will no longer run the agent banking business it acquired to establish a foothold in the offline payments market.