The Association of Bureaux De Change Operators of Nigeria (ABCON) has clarified that it is pursuing the merger of multiple Bureaux De Change (BDC) operators, not the recapitalization of the industry. ABCON President, Alhaji Aminu Gwadabe, issued a statement on Thursday outlining the association’s position.
ABCON’s recommendation for the merger is aimed at enhancing corporate governance and improving the rules of engagement between BDC operators and the central bank.
In 2007/2008, class ‘A’ BDCs were granted the privilege of a $1 million weekly allocation with a capital base of N500 million. ABCON is proposing a similar business model through mergers and consolidation rather than increasing the capital base for each operator.
Each CBN-licensed BDC currently operates with a capitalization of N35 million. ABCON suggests allowing these BDCs to voluntarily consolidate, forming new entities with a capital base of N350 million. This move is expected to broaden their scope of operation, diversify their sources, and reduce regulatory pressures.
Gwadabe emphasized that ABCON has not requested an upward review of the mandatory N35 million capital base for each BDC but rather advocates for the merger of at least ten BDCs to create a stronger entity with N350 million in capital.
According to ABCON, such mergers would prepare BDCs for a more prominent role in the financial system, including handling diaspora remittances and other offshore funds, ultimately improving access to foreign exchange at the retail level of the market.
Gwadabe cited the merger of multiple commercial banks in the 2004 consolidation exercise by the central bank as an example of how the apex bank could facilitate the streamlining of BDCs, reducing their numbers for more effective regulation.
In conclusion, Gwadabe stated, “ABCON rejects reports calling for BDCs recapitalization by a section of the media. The media quoted us out of context, and we are working to put forth a proper narrative.” ABCON’s focus is on mergers to strengthen the BDC industry.