Tinubu orders breakup of Optasia’s 12-year monopoly on airtime credit lending

FCCPC to unbundle Optasia’s monopoly

FCCPC secures presidential backing to dismantle exclusive control over N3trn airtime advance market …Capital flight and lack of local investment, cited among other reasons •Nine Nigerian fintechs to be on boarded.

President Bola Tinubu has directed the Federal Competition and Consumer Protection Commission (FCCPC) to break the 12-year monopoly of South African firm Optasia on airtime credit lending and data advance services in Nigeria, authoritative sources have told Vanguard.

The decision, which followed a high-level briefing by the FCCPC, marks a major policy shift aimed at opening up an estimated N3 trillion annual market to Nigerian fintechs.

According to multiple sources within the commission, the President was persuaded by arguments that Optasia’s exclusive arrangement has for over a decade facilitated substantial capital flight while contributing minimally to local tax revenues or employment.

“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,” an FCCPC official familiar with the briefing told this newspaper on condition of anonymity because he was not authorised to speak publicly.

The directive, which sources say was issued in writing late last month, effectively orders the FCCPC to use its statutory powers under the Federal Competition and Consumer Protection Act to end exclusivity arrangements that have kept smaller players out of the airtime credit lending space.

Airtime credit lending allows mobile phone users to borrow small amounts of airtime or data when their balance runs out, repaying typically within days—a service used by tens of millions of low-income Nigerians.

Allegations of non-compliance

It is alleged that Optasia—formerly known as Channel VAS—has operated for 12 years without establishing any administrative infrastructure in Nigeria. Sources further alleged that the company employs no Nigerian staff and does not share credit data with Nigerian bureaus or other financial technology firms, creating an information asymmetry that has stifled local competition.

Attempts to reach Optasia for comment on these allegations were unsuccessful as of press time. The company’s legal representatives in Nigeria did not respond to multiple inquiries. However, it is understood that Optasia has already filed an interim injunction before a Federal High Court seeking to restrain the FCCPC from implementing any deregulation measures.

The allegations, if proven, could have significant regulatory implications. Under Nigerian law, foreign companies providing digital financial services to Nigerian consumers are generally expected to maintain a local presence, comply with data localisation requirements, and contribute to the national tax base. The FCCPC’s case, as presented to the Presidency, reportedly hinges on the alleged claim that Optasia has circumvented these expectations.

The FCCPC’s acting executive vice chairman, Adamu Abdullahi, has previously spoken publicly about the need to dismantle anti-competitive arrangements in digital lending.

In a recent industry forum, Abdullahi warned that “no single company, regardless of origin, will be allowed to hold an entire digital subsector hostage through exclusive contracts that do not serve Nigerian consumers.”

Industry analysts say the timing of the directive is significant, coming as Nigeria grapples with foreign exchange shortages and seeks to maximise local value from its digital economy.

The airtime credit lending market, estimated at N3 trillion in annual transaction value, represents a substantial pool of consumer spending that policymakers believe should benefit domestic firms.

A senior fintech executive who requested anonymity because his company is among those seeking to enter the market described the President’s decision as “a watershed moment.” He added: “For 12 years, one foreign firm has extracted value from Nigerian consumers with almost no local reinvestment. That model is now ending.”

The FCCPC is expected to publish implementation guidelines within 60 days, detailing how the monopoly will be unwound and what conditions new entrants must meet.

The nine companies which are expected to be onboarded are: Technotrends Platforms Nigeria Limited, Total Tim Nigeria Limited, Fonyou Technologies Nigeria Limited, Rane Interactive Medien CLS Limited, MRS Innovation Nigeria Limited, Mode NG Applications Nigeria Limited, ERL Telecoms Service Limited, Cloud Interactive Associate Limited, and Coverage Broadband Limited.

Among the requirements being considered are mandatory local data hosting, minimum Nigerian equity participation, and transparent credit data sharing with the Nigerian Credit Bureau.

Credit: Vanguard News