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Nigeria’s Bureau De Change (BDC) operators are navigating significant challenges in their bid to meet the Central Bank of Nigeria’s (CBN) revised capitalization requirements. Despite a six-month extension announced last December, the new deadline of June 3, 2025, has left many operators under pressure to consolidate resources or strategize for survival.
Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), characterized compliance as “lukewarm” in an interview with The Punch. “Many of our members are struggling to meet the requirements,” he stated, highlighting mergers as a key option for operators to remain afloat.
Stricter Licensing Requirements
The CBN’s guidelines, introduced in May 2024, unveiled two new tiers for BDC licensing with substantially increased financial thresholds:
- Tier 1 BDCs: ₦2 billion minimum capital base, alongside non-refundable application and licensing fees of ₦1 million and ₦5 million, respectively.
- Tier 2 BDCs: ₦500 million minimum capital base, with application and licensing fees set at ₦250,000 and ₦2 million.
These stringent requirements aim to align Nigeria’s forex market practices with global standards while stabilizing the volatile naira. However, Gwadebe pointed out that many operators are grappling with the changes. “We are in discussions with the Central Bank to explore potential reviews, but the CBN insists that the requirements are non-negotiable,” he said.
Forex Market Dynamics
The recapitalization effort comes amid broader challenges in Nigeria’s forex market. The CBN has implemented measures, such as mandating autonomous transactions via the Electronic Foreign Exchange Matching System, to improve market transparency and liquidity. However, Gwadebe noted that implementation has been sluggish, impacting the effectiveness of these interventions.
“The perception of liquidity is crucial,” Gwadebe explained. “When market participants believe there’s enough supply, speculative demand and hoarding will decrease, easing pressure on the naira.” He projected the currency could stabilize between ₦1,500 and ₦1,600 to the dollar in 2025 if supply-side measures are effective.
Leveraging Diaspora Contributions
To bolster foreign exchange inflows, the CBN recently introduced the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA). These accounts aim to attract diaspora funds into the Nigerian economy, allowing holders to manage assets in both local and foreign currencies.
The initiative also offers investment opportunities, such as participation in Nigeria’s Diaspora Bond, potentially expanding diaspora contributions to the country’s economic growth. Gwadebe welcomed the scheme, emphasizing the importance of diaspora remittances as a critical foreign exchange source. However, he cautioned that the program’s success would depend on clear and effective operational guidelines.
A Sector at a Crossroads
As the June 2025 deadline looms, Nigeria’s BDC operators face a critical juncture. While the CBN’s recapitalization policy aims to strengthen the sector and align it with international standards, its immediate impact has been challenging for many operators.
For the CBN, balancing the enforcement of these reforms with the sustainability of a sector integral to Nigeria’s forex ecosystem will be pivotal. The months ahead will determine whether the recapitalization drive can achieve its intended goals without undermining the sector’s viability.
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