By September 20, 2019

OPay Kano Office Shutdown – Do Nigerian Govts Feel Threatened By Expansion?

By September 20, 2019

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Nigeria-based fintech startup OPay appears to be in trouble with the government of Kano State. Judging from the fact the startup only recently expanded to the northern state with its tricycle-hailing service, it’s rather too early to have an OPay shutdown in the state.

Financial resource company Nairametrics reports that law enforcement officers stormed the firm’s Kano office and ordered for its staff to leave the premises.

The raid by the State Police Commanded ended up in an indefinite shutdown of the branch. As reported, the mobile finance firm has not complied with the rules and regulations laid out by the government of Kano State.

Nigerian Govt Stifling Startups?

The Opera-founded company has tendered no official response regarding the development. But it’s not the first time a startup is getting itself in a fix with the Nigerian leadership. In July, ride-hailing rivals GoKada, ORide and Max.ng came under scrutiny by the Lagos State government.

Riders were harassed by Transunion workers over not paying ticket fees and for the companies operating without a license. The resolution of the chaos was agreed only on an NGN 25 Mn annual licensing fee the bike-sharing firms would have to pay.

At the time, GoKada and Max.ng were fresh out from venture capital raises. While the latter raised USD 5.3 Mn, the former shortly responded with USD 7 Mn, both of which were Series A rounds. Looking to “expand”, they were oblivious of looming tax trouble.

At the time, it seemed like Lagos State saw every reason to charge the two, alongside Opera-backed ORide, exorbitant fees for operating in Nigeria’s digital city. Meanwhile, they have been doing so for the last few years already. Why then?

OPay Shutdown – Why?

Image result for opay
Techcrunch

In July, OPay was in the headlines for raising a whopping USD 50 Mn from high-profile investors. It’s spinoff ORide was already flying high, giving heavily discounted rides all over Lagos. The war chest of money was used to expand to bus-hailing (in Lagos) as well as tricycle-hailing in multiple Nigerian states.

OPay shutdown in Kano is similar to the past case in Lagos. OTrike also launched in Jos, Asaba, Enugu, Owerri and other states. This begs the question – why is Kano the problem?

OPay has already run into mild problems with the road transport union workers in other states. But it has never had any issues with regulators or governments. Perhaps its expansions are a threat for state-run transport services.

OPay has been expanding like no one ever expected. Perhaps its war chest of funding and diversity of ambitions has tipped lawmakers into believing it’s doing something wrong. If OPay has been launching in different states with no trouble with them, it’s strange for the startup to not be on good terms with Kano State government.

Where From Here?

OPay’s other operations continue. Even though the app has some issues, the fintech is giving rides at unbelievably reduced prices and delivering meals via OFood for next to nothing.

We don’t know if the startup really stepped on toes to bring about a shutdown. But if so, it means the company has one more thing to worry about apart from its mobile app malfunctioning.

The police threatened to arrest any staff that would not comply with the OPay shutdown. For the time being, the office is likely to remain under locks until OPay gets back on the government’s good side. If Kano State is going to slap OPay with a huge fine, history would be repeating itself.

Featured Image: The Guardian Nigeria

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