Nigeria, often regarded as the main character of Africa's economic and tech aspirations, is proving to be a double-edged sword for global companies betting on its promise.
The latest casualty is dLocal , the Uruguay-based payments unicorn, whose third-quarter 2024 earnings reveal an over 80 year-over-year revenue loss in Nigeria, driven largely by economic headwinds in its once-prized Nigerian market.
This decline underscores the harsh reality facing foreign tech firms in Nigeria the promise of a vast, youthful, and digitally inclined population is being undermined by relentless currency volatility, crippling inflation, and operational challenges.
Nigerias potential has always been irresistible for for global companies such as dLocal, which is among a growing contingent of prominent Latin American fintech companies making inroads into African markets of late . Yet, the country is also proving a headache.
While the fintech sees strong performance in Egypt and South Africa, the Nigeria unit, once touted as a growth engine for dLocal's African operations, saw its Q3 2024 revenues plunge to USD 2.1 M-just 1 of the company's total-down from USD 55 M in the first nine months of 2023. This steep decline, despite steady transaction volumes, stems from the naira's devaluation, which has sharply eroded purchasing power and the value of processed payments.
