BDC operators urge strategic CBN partnership to boost FX market

Licensed Bureau De Change (BDC) operators have raised alarm over what they describe as an “enormous pool of unaccounted forex liquidity” in Nigeria, claiming that more than 91% of foreign exchange (FX) in the country lies outside formal market systems.

The operators, under the umbrella of the Association of Bureau De Change Operators of Nigeria (ABCON), called for urgent collaboration between the Central Bank of Nigeria (CBN) and BDCs to tap into this untapped liquidity and stabilize the foreign exchange market.

ABCON President Aminu Gwadebe said the current forex market structure is failing to capture the majority of the liquidity circulating within the informal sector.

“There is huge unaccounted liquidity in the system to be tapped with a cohesive strategy between the CBN and ABCON,” Gwadebe said. “Just like over 91% of physical cash is outside the banking system, we estimate a similar figure for FX liquidity.”

Gwadebe urged authorities to engage BDCs more actively and to grant them access to the autonomous forex windows and international money transfer inflows currently channeled elsewhere.

“We’re ready to share techniques and best practices to improve the sub-sector. With the right collaboration, we can unlock ‘hanging fruits’ that will enhance FX stability and inclusion,” he added.

As part of broader reforms, Gwadebe proposed the sale of dormant federal assets such as the Lagos Federal Secretariat and Bonny Camp, arguing that monetizing such assets could bring in foreign exchange, especially if sold to international investors.

When questioned about Nigeria’s restriction on dollar payments for local asset transactions, Gwadebe argued that such precedents already exist:

“We already collect dollars for some bonds and government transactions like immigration payments. So, strategic sales can still be structured to bring in foreign capital,” he said.

Providing an on-the-ground perspective, Adamu Ardo, a BDC operator based in Abuja, said limited official supply remains a key challenge for small-scale operators.

READ ALSO: BDCs struggle to access forex from Banks as parallel market trades lower than interbank rates

“Supply from official channels is not flowing the way it should. On some days, 10 customers walk in needing dollars, but we can only meet 3 or 4 requests. The rest are either delayed or pushed to the black market,” Ardo said.

While he acknowledged that the CBN has released “small but helpful” forex volumes in recent weeks, he maintained that the gap between demand and supply remains wide, creating pricing uncertainty and limiting service delivery for small businesses.

“We manage customer expectations daily, but until supply becomes consistent and predictable, the pressure won’t ease,” he added.

The BDCs’ renewed push comes in the aftermath of the June 2023 foreign exchange unification policy, which merged multiple FX windows into a single market framework.

Although aimed at boosting transparency and liquidity, BDCs say that implementation gaps and exclusion from key FX supply channels have limited its success.

In addition, the CBN’s ongoing recapitalization directive for BDC operators has raised concerns about compliance costs and shrinking liquidity for many traders struggling to meet the new financial requirements.

Earlier in the year, ABCON President Gwadebe had described the naira as “the most unpredictable currency in the world,” citing market volatility, inconsistent policy signals, and global economic headwinds.

“Slowdowns in major economies like the US, Europe, and China are shrinking trade volumes and increasing volatility. Add Nigeria’s internal regulatory changes, and the forex market becomes extremely fragile,” he said.