CBN Reduces BDCs To 2991

The Central Bank of Nigeria (CBN) has approved 2,991 Bureau de Change (BDC) dealers to operate in the market, giving the boot to 2,698.

BDCs in Nigeria are the major influencers of exchange rates and the new development may be in furtherance of the dollar ban on the BDCs.

The CBN, in July 2021, stopped dollar sales to BDCs due to foreign exchange infractions and pushed genuine demand for forex to commercial banks.

In a new list of approved dealers on the apex bank’s website, 2991 were listed against 5,689 black market dealers approved in 2021.

The Central Bank in 2022 published a similar list in a document with reference: REF: FPR/DIR/PUB/CIR/001/037, titled, ‘List of CBN Licensed Bureaux De Change As at December 31, 2021’ that contained 5,689 approved black market dealers.

In Muhammadu Buhari, several operators in the forex market ballooned to 5689 from 74 in 2005. New entrants came in 2019 when another term of Five-year was approved for the CBN Governor Godwin Emefiele who is currently on suspension.

It is expected that a new regime is about to be opened in the forex market under the Tinubu presidency which has unified the foreign exchange windows.

Also, the administration’s key economic policies in the ‘Policy Advisory Council Report: National Economy Sub-committee,’ which contained reforms like increased capitalisation for BDC operators give an insight into the new development.

The council also suggested that the CBN allows Nigerian banks to operate as the primary dealers to supply the forex market.

The naira was floated by the CBN in June, and the currency has since been on a fall as low as N795.28 at the Investors’ and Exporters’ FX window.

The situation is worse at the parallel market where it closed at N820 per dollar, the British pound closed at N1095, and the Euro at N905.

In a recent statement by the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, he said the FX market would remain volatile because BDCs are excluded from the I&E window.

“The volatility of the naira continues to underpin the slow economic growth of Nigeria. The I&E window is laudable, it’s patriotic and nationalistic, but no policy can actualise its mission without carrying the interest of the subsector (which is the BDCs).

“The I&E window is supposed to run on three legs, the banks, the CBN, and the BDCs, overtly or covertly, but the BDCs are missing,” said Gwadabe.