Nigeria: CBN Revives BDC Operations and Introduces New Mechanism for Bureau De Change Activities in Nigeria

The Central Bank of Nigeria (CBN) has taken significant steps to enhance the efficiency of the Nigerian Foreign Exchange Market by reintroducing Bureau De Change (BDC) operations through a set of operational changes.

The announcement, made on August 17, 2023, introduces several measures designed to streamline and optimize BDC operations.

Under the new framework, the range of buying and selling spreads for BDC operators is set to be within -2.5% to +2.5% of the weighted average rate of the Nigerian Foreign Exchange market window from the previous day. This adjustment aims to foster stability and transparency in exchange rate fluctuations, benefiting both BDC operators and the general public.

Another noteworthy change involves the compulsory submission of periodic financial reports by BDC operators.

These reports, spanning daily, weekly, monthly, quarterly, and yearly periods, should be submitted through the upgraded Financial Institution Forex Rendition System (FIFX), tailored to meet the specific reporting requirements of each operator.

This alteration aims to enhance regulatory oversight and ensure a higher level of accountability in the BDC sector.

The circular also emphasizes that failure to provide accurate returns within the stipulated time frame will result in sanctions, including the potential revocation of operating licenses.

Even if BDC operators have had no transactions during a given period, they are obligated to submit nil returns, thus fostering a culture of compliance and meticulous record-keeping.

The CBN encourages all BDC operators and the public to become familiar with these new guidelines and adhere to them diligently.

By implementing these measures, the Central Bank of Nigeria envisions a more robust and well-regulated BDC segment that aligns with broader initiatives aimed at enhancing the efficiency of Nigeria’s foreign exchange market.

What This Signifies

This development marks a significant shift, indicating the return of BDCs to the country’s foreign exchange market.

This move signifies a departure from previous policies, including those implemented during the tenure of former CBN Governor Godwin Emefiele, which had temporarily excluded BDC operators from participating in the market.

The new policy reflects the CBN’s determined effort to re-engage BDC operators and reintegrate them into the foreign exchange landscape.