OPay shuts down some Nigeria operations due to harsh business environment,COVID-19

Opera founded and Lagos-based fintech startup, OPay, is shutting down some of its operations in Nigeria due to a harsh business climate and the novel coronavirus (COVID-19) pandemic.

“We can confirm that some of our business units, including the ride hailing services, ORide, OCar as well as our logistics service OExpress will be put on pause. This is largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic, the lockdown and government ban," the company announced in a statement.

In January, Lagos Governor Babajide Sanwo-Olu announced a ban on motorcycle and tricycle operations in sub-Saharan Africa's largest city. Ride hailing services, a sector where OPay had begun to dominate, were affected by the ban.

Nigeria diagnosed its first COVID-19 case on February 27, 2020 and imposed nationwide restrictions in March. Businesses were shuttered as one in a raft of measures to curb the spread of the disease.

"Globally, ride-sharing businesses have been heavily impacted by the pandemic. But several months ago, foreseeing this issue, OPay had already taken preemptive steps to restructure our business focus away from rides. It is worthy to note that this final restructuring has minimal impact on OPay as a whole business.

"It is important to clarify that ride-sharing had always been only one part, and not a major part of OPay’s diversified business in Nigeria. In fact, OPay had been investing more and seeing accelerated growth in its commitment to Nigeria’s financial and technology inclusion."

The company's permanent platform is still in business, however.

"During the pandemic, we have seen continued demand for our offline mobile money agency, and online digital payment, which remain the core of our business. From January to April 2020 for example, we witnessed a 44% growth of offline and online transaction value even in the midst of pandemic and lockdown.

"This is a testament to the high demand for flexible and easy financial services by Nigerians. OPay remains one of the most well-funded and profitable mobile money platforms in Nigeria, and we will continue to do more for our customers.

"Lastly, OPay will continue to invest in and grow in the eCommerce space, aligning its customer and business eCommerce units which will continue to operate and grow. We believe a financial platform coupled with goods’ platform will form the future of Nigeria’s technology development," the statement from OPay read.