Bureau De Change Operators Face Uncertainty as Recapitalization Deadline Approaches
The majority of licensed Bureau De Change (BDC) operators in Nigeria are currently facing an existential crisis as the June 3, 2025, recapitalisation deadline draws near.
According to recent information from the Association of Bureau De Change Operators of Nigeria (ABCON), fewer than 5% of members have met the new capital requirements established by the Central Bank of Nigeria (CBN).
The foreign exchange trading sector has been experiencing significant anxiety since the CBN substantially increased the minimum capital requirements for BDC operations.
News.ng recalls that in May 2024, the CBN raised the minimum share capital requirements from N35 million to N2 billion for Tier-1 license holders and N500 million for Tier-2 license holders.
The CBN’s revised regulations specify that Tier-1 BDCs can operate nationwide, while Tier-2 operators are restricted to operating within a single state. These changes are part of broader reforms aimed at strengthening Nigeria’s foreign exchange market.
“The BDCs will continue to remain the third level of the forex market and ensure the closing of the gap between the official and parallel market rates. However, as the deadline for the recapitalisation is closing nearer, the entire sector is heightened with anxiety and with hope to still remain in the market, as not up to 5% have so far met the new financial requirements,” said Aminu Gwadebe, President of ABCON.
When asked about the fate of the remaining 95% of operators and whether ABCON is advocating on their behalf, Gwadebe stated, “Their fate hangs in the air except if the deadline is further extended. However, we are hopeful of the CBN Management’s humane considerations.
“We are pushing for a lot of initiatives to ease the compliance of our members to the new financial capitalisation requirements of N500 million and N2 billion, respectively.”
The CBN had previously extended the recapitalisation deadline by six months in November 2024, moving it from December 2024 to June 3, 2025, due to low compliance rates. Despite this extension, the vast majority of operators have still been unable to meet the requirements.
ABCON is now promoting mergers as a strategy for members to comply with the new capital requirements. “Yeah, we are strategically advocating for our members nationwide for mergers as we await an approved framework work, especially on consideration of existing capital by the CBN on the mergers initiative,” Gwadebe explained.
Economic experts have expressed concerns about potential unintended consequences of the policy. Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), cautioned that the high capital requirements might create monopolistic conditions in the parallel market, noting, “CBN needs to be careful not to create a monopoly situation in the parallel market due to the new capital requirements. They [BDCs] are just like microfinance banks in the financial market.”
BDC operators themselves are feeling the pressure. A BDC operator identified as Mallam Adamu in Wuse Zone 4 acknowledged the CBN’s reform efforts but admitted the difficulties many operators face. “Many operators are still struggling. There have been talks about mergers, which is one thing. Many of us will try to meet up, but that also means some of us will be out of business, which is why we are appealing to CBN [to reconsider].”
ABCON has consistently argued that the BDC business is not capital-intensive since operators neither accept deposits nor provide loans to customers. The association has advocated for more reasonable capital requirements, suggesting N500 million for Tier-1 operators and N100 million for Tier-2 operators, arguing that excessive capitalisation requirements could eliminate experienced professionals from the industry.
As the June deadline approaches, many operators await further direction from the CBN, hoping for either another extension or modifications to the capital requirements.
