FCCPC should stay the course in its resolve to make Optasia respect our laws
Until recently, few Nigerians could claim to have heard of Optasia, let alone its Nigerian subsidiary Nairtime, the foreign-owned AI-led financial technology platform providing micro-lending, airtime credit and automated credit-scoring services across 38 countries.
Yet, this South African-owned entity has maintained, almost exclusively, Nigeria’s entire airtime and data borrowing market, in the last 12 years. Indeed, until the firm’s tiff with the Federal Competition and Consumer Protection Commission (FCCPC) over allegations of anti-competition and other unfair market practices, most Nigerians would probably not have known that an entity whose annual turnover is in excess of N400 billion actually exists. Not anymore.
At issue is the South African tech firm’s long-standing dominance in the lucrative airtime and data lending market against FCCPC’s mandate to protect consumers, prevent capital flight, and enforce local regulations.
Now, the administration of President Bola Tinubu has decided to buck the ugly trend. Indeed, the consumer affairs regulator, the FCCPC, has since received the president’s marching order to break its 12-year monopoly. The FCCPC, by the directive, is to use its statutory powers under the FCCPC Act to end those exclusivity arrangements that have kept smaller players out of the airtime credit lending space.
Surely, the government’s decision on the matter will be hard to fault. That it has been in the making over the past 12 years, during which Optasia maintained its stranglehold on that segment of the telecommunications market is perhaps inevitable. If anything, it is a reflection of how the terrain has changed over the years.
The fact is that the conditions under which that lone operator took over the segment to the exclusion of others, no longer exist. Today, whereas a number of highly innovative start-ups have not only emerged but have signalled their readiness to compete for a share of the market, they have had to endure the pain of being muscled out by the dominant operator.
To cap it all, the entity employs no Nigerian staff and does not share credit data with Nigerian bureaux or other financial technology firms, thus creating an information asymmetry that has stifled local competition.
The FCCPC on its part has long made the argument that opening the market to competition will promote local participation, strengthen the local fintech ecosystem, create employment opportunities as well as stem the continuous outflow of capital from the country.
These goals, aside being in alignment with its mandate, is also at the core of the Nigeria First policy of the Tinubu administration, under which local start-ups can count on the protection that the government can best offer, including shielding them from the predatory actions of the foreign but more established actors.
It comes as no surprise therefore, that the resolve by the Federal Government to protect the Nigerian consumer, engender competition, and to ensure that local fintechs thrive, thus protecting the nation’s larger interests, is not only fiercely resisted but is being challenged on all fronts by players like Optasia.
The FCCPC must stay the course. It should ignore the blackmail from players, who, long used to playing footloose with local regulations, are quick to deploy foreign direct investment as shield to escape regulatory scrutiny.
While Nigeria welcomes foreign players in all sectors of the economy, its commitment to the fundamental rules of competition and fair market practices should be upheld at all times by operators. We find nothing that the FCCPC has done that is outside of its remit.
In this particular instance, it would seem a case of recalcitrance on the part of Optasia to conform to regulation. The company, as indeed any other operator (foreign or local) in the Nigerian fintech space must see itself as open to, not above, regulation, and to act in all manner consistent with the nation’s laws and economic aspirations.
Culled from The Nation
