BDC operators warn of threat to retail FX market

Nigerian foreign exchange market. Photo: The Sun

Nigeria’s retail foreign exchange market could face a distribution gap if regulatory reforms continue to weaken Bureau De Change operators, the Association of Bureaux De Change Operators of Nigeria has warned.

The association said the survival of the sub-sector was critical to maintaining access to foreign exchange for travellers, small businesses and other legitimate retail users who depend on BDCs for currency transactions.

ABCON President, Aminu Gwadabe, made the observation in a statement on Monday, calling on the Central Bank of Nigeria to address challenges facing operators and create conditions for a commercially viable BDC industry.

Although the association supports the CBN’s efforts to improve regulation, transparency and stability in the foreign exchange market, Gwadabe argued that the reforms should not undermine the operations of legitimate currency dealers.

He said the industry represents private investment, employment and entrepreneurial capacity, adding that its role in retail FX distribution should complement rather than compete with the banking system.

The warning comes amid the CBN’s efforts to restructure the BDC market through tighter licensing, capitalisation and compliance requirements.

Gwadabe said regulatory consolidation should be accompanied by measures to strengthen operators and enable them to meet the new requirements without losing their investments.

He identified five priority areas requiring the regulator’s intervention, including the acceleration of pending licensing applications and the introduction of clear timelines for processing them.

• Nigeria’s FX turnover falls 51% to $1.81bn
• Debt servicing may swallow 72% of FG revenue by 2030
• 2027 manifesto: Tinubu eyes 6% growth, 78,000 security recruits

He also called for solutions to recapitalisation and compliance challenges, as well as effective implementation of licensed BDC operators’ access to the Nigerian Foreign Exchange Market.

Other demands include regular consultations between the CBN and ABCON, a structured dispute-resolution mechanism and a predictable regulatory framework that protects legitimate investments and encourages long-term participation.

The association maintained that a functioning BDC network would help distribute foreign exchange to retail users who may not be adequately served through conventional banking channels.

Gwadabe said ABCON remained committed to professionalism, transparency and regulatory compliance, but stressed that the sustainability of the sub-sector should form part of the broader objectives of foreign exchange reforms.

“Nigeria needs a stronger BDC industry, not a disappearing one,” he said.