Licensed Bureau De Change (BDC) operators in Nigeria have expressed severe concerns over their survival, lamenting that their operations are on the brink of extinction following the Central Bank of Nigeria’s (CBN) decision to cut off their dollar supply.
CBN Action and Market Impact
- Specific CBN Action: The CBN suspended the direct sale and allocation of foreign exchange (forex) to BDC operators from the official window. Although the CBN briefly resumed sales in February 2024 to enhance liquidity after revoking thousands of licences, it has since stopped forex sales to them without any sustained intervention.
- Segment Affected: Licensed BDC operators (currency traders in the retail sub-sector of the forex market).
- Reasons for CBN Action (Historical Context): In July 2021, the CBN initially stopped forex sales, accusing BDCs of becoming a conduit for illegal financial flows and money laundering. While the current cessation of sales is not tied to a new stated reason in the report, the BDCs noted the CBN could not sustain the exercise after the brief 2024 resumption.
- Impact on the Market: BDC operators are now struggling to source forex, relying largely on unstructured, walk-in customers. The President of the Association of BDC Operators of Nigeria (ABCON) stated that their operations are “near extinction,” with many struggling to meet overhead expenses such as staff salaries and office rent. Furthermore, customer demand for physical cash exchange has dropped sharply as customers increasingly prefer to use online platforms or International Money Transfer Operators (IMTOs), further crippling BDC revenue.
