Bureau de Change (BDC) operators in Nigeria have expressed optimism about the Naira’s prospects in 2025, forecasting a stronger currency buoyed by anticipated reforms in the country’s foreign exchange (forex) market.
They said these reforms could improve currency stability, boost investor confidence, and enhance the efficiency of forex trading.
However, the operators have raised concerns over the Central Bank of Nigeria’s (CBN) N2 billion recapitalization policy, which they argue could negatively impact their operations and the overall stability of the forex market.
They called for a comprehensive review of the policy, citing its potential to force smaller operators out of business and concentrate market control in the hands of a few.
The CBN had, in May 2024, introduced the recapitalization policy, mandating Tier-1 BDC operators to increase their minimum capital requirement to N2 billion, while Tier-2 operators were required to meet a threshold of N500 million.
This move, the CBN said, was aimed at strengthening the financial health of the sector, curbing illegal forex trading, and aligning the industry with international best practices.
Several BDC operators who spoke to Nairametrics shared their experiences and highlighted the policy’s impact on their businesses. Many noted that while they support the CBN’s efforts to sanitize the sector, the steep capital requirement poses significant challenges, especially for small-scale operators.
One operator explained,
“The new policy is a double-edged sword. On the one hand, it could foster a more resilient sector, but on the other, it threatens to marginalize smaller players who play a crucial role in providing forex access at the grassroots level.”
Speaking exclusively to Nairametrics, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, said
“With the fundamentals on the ground now, in terms of policy reforms, investors’ confidence, awareness and support, streamlining of diaspora remittances, investment in oil outputs … so a combination of all these factors will ensure a continuously stronger naira in 2025. If regulators sustain the momentum, I believe we might say bye-bye to naira volatility.”
Another operator, Nasir in Zone 4, Abuja said “2025, Insha Allah, will be good for the naira if we maintain current momentum. However, some of our members [BDC operators] are at risk of being thrown out of business with certain CBN policies.”
Banks circumspect in implementing CBN’s directives
Gwadebe also commented on the Central Bank of Nigeria’s (CBN) $25,000 weekly forex purchase limit for Bureau De Change (BDC) operators, which was introduced in December 2024 and is set to end in January 2025.
According to him, the policy has faced significant challenges in implementation due to hesitation from commercial banks.
“From inception, it came with several challenges. The banks are circumspect in implementing the directives of the Central Bank, and that has affected the takeoff. As it is coming to an end, I’m not sure any Bureau de Change operator has access to that window for now,” Gwadebe said.
He called for an extension of the policy to improve efficiency and ensure stability in the forex market. “It will be good if the CBN revisits or extends the 30th or 31st deadline for the purchase window. There is a need for the injection of liquidity into the retail end of the [forex] market because that is where volatility usually comes from.
“It’s good to check inflation and naira volatility; they are two sides of the same coin. You have to deal with them simultaneously. You cannot hold one and leave the other to market forces,” he added.
Recapitalisation breaks the camel’s back for the Bureau de Change
The BDC operators are also grappling with the CBN’s recapitalisation policy, which has raised the minimum capital base to N2 billion for Tier-1 BDCs and N500 million for Tier-2 operators. The operators described the policy as a major challenge for many operators.
“The one [CBN’s policy] that broke the camel’s back for Bureau de Change is the amount for recapitalisation. We are propagating the issue of mergers among our members so that a lot of our members will not be thrown out of the business. N2 billion is not a child’s play. So, that is one of the greatest challenges facing us as we speak,” Gwadebe stated.
“We play a critical role in bridging the gap between the official and parallel markets. However, with this policy, thousands of operators may shut down due to the amount of recapitalisation. This could destabilize the forex market and weaken the naira further, contrary to the policy’s intent. N500 million is not a joke,” Ibrahim Gambo, BDC operator in Abuja told Nairametrics.
Despite this challenge, there was a slight relief for operators as the CBN waived annual renewal fees for BDCs in 2025 due to financial constraints affecting their members.
According to CBN guidelines, BDCs with Tier 1 and Tier 2 licenses are required to pay non-refundable license fees of N5 million and N2 million, respectively. While the initial deadline was set for December 2024, the CBN has now extended it to June 3, 2025.
Operators Seek Liquidity and Market Confidence
On the importance of maintaining liquidity and confidence in the forex market, Gwedebe noted “The Nigerian government doesn’t buy dollars; it’s the earnings they make. For a Bureau de Change or bank that buys dollars, it is about stabilising the exchange rate and ensuring liquidity and confidence in the market,” he explained.
Nairametrics also spoke to other BDC operators in Abuja, who echoed similar sentiments.
We spoke with a CBN official [who doesn’t want his name in print] over the allegation of circumspection of banks in implementing the directives of the Central Bank over the weekly $25,000 limit. He said the apex bank is not aware of the development and advised the BDC operators to file official complaints to CBN for appropriate sanctions. He said, “If they do, the bank may grant them an extension but don’t take this as a guarantee.”
