The Association of Bureau De Change Operators of Nigeria (ABCON) has raised serious concerns about the impact of the Central Bank of Nigeria’s (CBN) new capital requirements for Bureau De Change (BDC) operators, warning that more than three million Nigerians risk losing their means of livelihood if most BDCs are forced out of business.
ABCON President, Aminu Gwadebe, made this known during a weekend. He revealed that less than 10 per cent of ABCON members have been able to meet the new capitalisation benchmark set by the CBN, which took effect on June 3, 2024.
In the revised operational guidelines issued in May 2024, the CBN directed all existing BDCs to reapply for new licences under Tier 1 and Tier 2 categories and to meet the prescribed minimum capital requirements within six months. Tier 1 BDCs are required to have a capital base of N2 billion, while Tier 2 BDCs must hold a minimum of N500 million. Each category also comes with a non-refundable licence fee of N5 million and N2 million, respectively.
Following industry-wide concerns, the CBN granted a six-month extension in November 2024, pushing the deadline for compliance to June 3, 2025. Despite this grace period, many BDC operators are still struggling to raise the required funds.
“It’s a tough one. It is glaring that many of us will be out of business,” Gwadebe said. “As we speak, I’m not sure that up to 10 per cent have completed the capitalisation process. Over three million people may lose their livelihoods as a result of this issue, either directly or indirectly. We are talking about 1,500 entities, with employees and families who will be impacted.”
Gwadebe confirmed that the association is in talks with the CBN to explore flexible implementation strategies. “There is an ongoing engagement between the association and the Central Bank,” he said, noting that meetings have recently been held with CBN stakeholders in Abuja and Lagos.
He explained that the main obstacle to compliance is the steep capital requirement, stating that BDCs are fundamentally retail businesses and not banks. “N500 million or N2 billion is not a joke. The model being used for us is entirely a bank model,” he said.
According to Gwadebe, while the new guidelines offer benefits, such as access to the foreign exchange market and diaspora remittance services, the lack of enforcement of existing CBN circulars discourages investors.
“For instance, there was a CBN circular issued earlier this year, instructing banks to sell foreign exchange to BDCs, which expired on May 31. Virtually no bank complied, and the CBN did not enforce the directive. This undermines the confidence of potential investors,” he said.
He stressed the need for the CBN to either allow BDCs direct access to the FX market or allocate foreign exchange directly, bypassing banks entirely. “You can’t expect someone to invest N500 million or N2 billion and not have market access due to weak enforcement,” he added.
Gwadebe also criticised the one-sided nature of the diaspora remittance model under the new framework, which limits BDCs to acting as agents for inward transactions. “Most of the demand in Nigeria is for outward transactions—school fees, medical bills, personal remittances. The model should support both inward and outward flows,” he argued.
He further urged the CBN to rethink its prescribed cashless transaction ratio of 75 per cent cards and 25 per cent cash, saying that most Nigerians still rely on cash due to unreliable card and network services. “We are not against cards, but cash is still supreme. For our context, it should be 75 per cent cash and 25 per cent card.”
The ABCON president concluded by emphasizing that BDCs are complementary players in the forex market, especially for retail transactions, and called on the apex bank to consider the operational realities of the sector before enforcing the recapitalisation in full.
