The federal government has backed regulatory efforts to open up the country’s airtime credit and data advance market to indigenous financial technology companies in a move to stem capital flight.
President Bola Tinubu had reportedly approved moves to dismantle the 12-year dominance of South African technology firm, Optasia, in Nigeria’s airtime credit and data advance market.
THISDAY gathered that the decision followed extensive engagements between the Presidency and the Federal Competition and Consumer Protection Commission (FCCPC), which argued that the current market structure had stifled competition, limited local participation, and enabled significant profit repatriation outside the country.
Sources familiar with the development said the FCCPC convinced the Presidency that opening the market would align with the administration’s broader economic agenda of promoting local content, strengthening the digital economy, creating jobs, and retaining more value within the domestic financial system.
According to the commission, Optasia’s model had fuelled capital flight for over a decade, with the firm allegedly repatriating about N3 trillion annually in profits to South Africa while paying minimal tax locally.
Sources familiar with the development said the commission convinced the Presidency that opening up the market would promote competition, support the Nigeria First Technology Policy, create jobs for Nigerians and curb capital flight.
Optasia, formerly known as Channel VAS, has operated almost exclusively in the airtime credit and data advance segment for about 12 years, providing services largely to MTN and some of its African affiliates.
The FCCPC reportedly raised concerns over the company’s operational structure, noting that despite its extensive activities in the country, it maintains a limited local presence and contributes little to Nigeria’s technology ecosystem.
FCCPC, which regulates consumer safety and competition in the country, maintained that deregulation would encourage competition and support the government’s Nigeria First technology policy.
The position of the commission that opening the market will stimulate innovation, create opportunities for Nigerian firms, generate employment and reduce the outflow of resources that have continued to leave the country under the existing arrangement.
“The Commission’s argument is that deregulating the sector will promote competition, the Nigeria First Technology Policy, employment for Nigerians and discourage capital flight to South Africa as hitherto perpetrated by Optasia,” according a source within FCCPC disclosed.
The deregulation drive is also in line with the administration’s broader objective of deepening indigenous participation in the fintech sector and reducing foreign exchange outflows linked to technology services.
However, Optasia had reportedly resisted the deregulation through legal and diplomatic channels. While its interim injunction to restrain FCCPC is already in court, sources confirmed the firm also deployed a diplomatic push, using a foreign President to reach out to Tinubu to preserve the deal.
But the diplomatic efforts had failed.
Before Optasia’s intervention, the FCCPC had briefed Tinubu on the economic impact of the monopoly.
The Presidency accepted the commission’s “economic-sense argument” that Nigerian fintechs have the capacity and technical know-how to provide the same services.
“To strengthen credit data infrastructure and promote competition, FCCPC forwarded a list of nine licensed Nigerian companies to the Presidency to upend Optasia’s grip, it further learnt.”
James Emejo
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