In a surprising announcement on Thursday, OPay said it’s suspending its ride-hailing and logistics businesses in Nigeria. According to the statement issued via the company’s social media page, the ORide, OCar as well as OExpress are affected by the decision.
The statement cited harsh business conditions including the ban on motorbike operation by the Lagos State government as the reasons for the decision, coupled with COVID-19 pandemic that has ushered in a new struggle for ride-hailing businesses around the world.
The company said it’s focusing on its mobile and digital financial units that have shown growth even amidst the economic strains that have crippled other segments of its businesses in Nigeria.
Read the full statement below.
“We can confirm that some of our businesses units including the ride-hailing services, ORide, OCar as well as our logistics services 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.
“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.
“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 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 sad realities of this development range from hundreds of people being furloughed to anti-foreign investment trajectory set by the government.
Experts believe that harsh business environment and insensitive business policies have been the reasons foreign direct investors have avoided Nigeria, and those who dared to try have tasted the bitter outcome.
OPay like many other businesses are victims of anti-business laws and an environment lacking business sustainable amenities.
Fortunately, the company has a lifeline. OPay said its fintech unit witnessed 44% growth in the first quarter of 2020, and it has been the mainstay of their business presence in Nigeria.
OPay has about 50,000 mobile money agents across states in Nigeria. It is hoped that the governments will not come up with further policies that will stifle its growth in fintech.