Tinubu directs end to Optasia's 12-year dominance of airtime loan market

President Bola Tinubu has given the Federal Competition and Consumer Protection Commission (FCCPC) his backing to dismantle the 12-year monopoly held by South African firm Optasia over Nigeria's N3 trillion airtime advance market, citing concerns over capital flight and lack of local investment.

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The decision marks a significant policy shift aimed at opening up the market to Nigerian fintechs, with the FCCPC set to use its statutory powers to end exclusivity arrangements that have kept smaller players out of the airtime credit lending space.

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According to sources, the President was persuaded by arguments that Optasia's exclusive arrangement has facilitated substantial capital flight while contributing minimally to local tax revenues or employment, with the FCCPC arguing that deregulating the sector will promote competition and employment for Nigerians.

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The directive, issued in writing late last month, effectively orders the FCCPC to end exclusivity arrangements that have kept smaller players out of the airtime credit lending space, which allows mobile phone users to borrow small amounts of airtime or data when their balance runs out.

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Allegations have been made that Optasia has operated for 12 years without establishing any administrative infrastructure in Nigeria, employing no Nigerian staff, and not sharing credit data with Nigerian bureaus or other financial technology firms, creating an information asymmetry that has stifled local competition.

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Optasia has filed an interim injunction before a Federal High Court seeking to restrain the FCCPC from implementing any deregulation measures, with the company's legal representatives in Nigeria not responding to multiple inquiries.

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The allegations, if proven, could have significant regulatory implications, with foreign companies providing digital financial services to Nigerian consumers expected to maintain a local presence, comply with data localisation requirements, and contribute to the national tax base.

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The FCCPC's acting executive vice chairman, Adamu Abdullahi, has previously spoken about the need to dismantle anti-competitive arrangements in digital lending, warning that no single company will be allowed to hold an entire digital subsector hostage through exclusive contracts.

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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, with the airtime credit lending market representing a substantial pool of consumer spending that policymakers believe should benefit domestic firms.

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A senior fintech executive has described the President's decision as "a watershed moment", adding that for 12 years, one foreign firm has extracted value from Nigerian consumers with almost no local reinvestment, and that model is now ending.

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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, with nine Nigerian fintechs set to be onboarded, including Technotrends Platforms Nigeria Limited and Total Tim Nigeria Limited.

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The nine companies 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.

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Among the requirements being considered are mandatory local data hosting, minimum Nigerian equity participation, and transparent credit data sharing with the Nigerian Credit Bureau, as the FCCPC aims to promote competition and local investment in the airtime credit lending market.