Nigeria: CBN retains limits on BDC access to official FX market

The Central Bank of Nigeria has sustained restrictions on Bureau De Change (BDC) operators’ access to the official foreign exchange market, citing ongoing compliance concerns and historical abuses within the segment.

Market participants say the regulator continues to favour a bank-led distribution model for foreign exchange, arguing that it provides stronger oversight and helps minimise leakages across the system.

According to industry sources, risks linked to arbitrage, round-tripping, and money laundering remain central to the apex bank’s cautious position. An official of the Association of Bureau De Change Operators of Nigeria noted that the sector is still viewed as high-risk due to perceived compliance weaknesses, reinforcing the preference for fewer, more controlled distribution channels.

A licensed trader, Umar Barkinzuwo, said authorities have continued to route foreign exchange through the banking system, where monitoring and control are more centralised.

BDC operators, however, argue that their limited participation is constraining liquidity at the retail end of the market, contributing to persistent pressure on the parallel market. They maintain that broader inclusion would support exchange rate stability by improving access to foreign currency.

The restrictions reflect a long-standing policy stance. In July 2021, the CBN suspended forex sales to BDCs over allegations of illicit financial flows. Although access briefly resumed in February 2024—following the revocation of more than 4,000 licences—the arrangement was later scaled back.

In February 2026, the apex bank introduced a limited window, allowing BDCs to access up to $150,000 weekly. However, operators say the framework remains restrictive and insufficient to meet demand.

They also point to gaps in retail supply, arguing that banks often struggle to fully serve end-users, leaving informal channels to bridge the shortfall.

Despite ongoing reforms, including automation and enhanced compliance training, analysts say the CBN’s position underscores deeper concerns around transparency, risk management, and systemic control—highlighting its continued reluctance to fully reintegrate BDCs into the official foreign exchange ecosystem.