The Central Bank of Nigeria’s (CBN) approval of 82 new Bureau De Change (BDC) licences has triggered significant unease across Abuja’s foreign exchange market, with operators and analysts warning that the move, though potentially beneficial in the long run may worsen instability in a system still recovering from years of regulatory turmoil.
The new approvals align with the CBN’s broader push to reform and liberalise the FX landscape after years of inconsistent directives, sanctions, and major clean-ups within the subsector. While the apex bank insists the fresh licences will enhance competition and transparency, many industry participants argue that the timing and scale of the rollout could place additional strain on a market already grappling with limited dollar liquidity and rising compliance costs.
Operators Fear Market Saturation
Across Abuja’s busiest FX hubs from Wuse Zone 4 to Garki reactions have been mixed but largely cautious.
Some operators acknowledge that new entrants could improve innovation and expand access to legitimate FX channels. However, many fear that introducing 82 new BDCs at once could overwhelm the market without any meaningful increase in FX supply.
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One operator, who asked not to be named, said existing BDCs are already struggling with shrinking turnover, squeezed margins, and heightened oversight requirements under the new regulatory framework.
“Most of us are still adjusting to tougher reporting rules and higher capital requirements. Adding 82 more BDCs when dollar supply is this thin only intensifies competition for scarce resources,” he said.
Others warn that the influx of new operators could trigger aggressive rate-cutting and revive arbitrage behaviours that past reforms attempted to eliminate.
FX analyst Chude Marvelous said Nigeria’s FX environment remains fragile, and onboarding dozens of operators at once risks repeating past missteps when rapid licensing fuelled speculative trading and worsened rate volatility.
“If supervision isn’t airtight, we may see unhealthy competition, rate fragmentation, and behaviours that undermine pricing integrity,” he cautioned.
Policy analyst Dr. Nathan Udo agreed, arguing that the CBN should have adopted a more measured rollout.
“The FX market is still too vulnerable for this scale of expansion. Approvals of this magnitude should be sequenced to allow the regulator monitor liquidity conditions before introducing more players,” he said.
Compliance Costs Add Pressure
Under the revised CBN guidelines issued earlier this year, BDCs face tougher capital requirements, stricter anti–money laundering rules, and mandatory real-time reporting.
A BDC owner questioned how many of the newly approved operators can sustain operations under such demanding conditions.
“The new rules are tough. Not everyone can survive them. The question is: how many of the 82 new BDCs can operate without cutting corners?” he said.
Attempts to reach ABCON President Aminu Gwadebe were unsuccessful as of press time.
Experts Call for a Phased Rollout
Market experts argue that the CBN should adopt a phased approach to avoid oversaturation, regulatory lapses, and renewed speculative pressure on the naira.
Dr. Udo stressed that FX reforms will remain ineffective without improved supply inflows from exports, remittances, and foreign investments.
Economist Fatima Danladi welcomed the reforms but urged caution.
“Licensing too many BDCs without boosting dollar supply will not resolve the underlying issues. Reforms must match Nigeria’s delicate FX realities,” she said.
Several operators are also calling for clearer guidelines on access to official FX windows, warning that inconsistent supply could push new BDCs into inactivity or questionable practices.
Recall that in May 2024, the CBN released new guidelines governing BDC operations and directed operators to reapply for licences based on stricter requirements.
Key provisions include:
Tier-1 BDCs: Minimum capital base of ₦2 billion
Tier-2 BDCs: Minimum capital base of ₦500 million
Application fees: ₦1 million (Tier-1), ₦250,000 (Tier-2)
Licensing fees: ₦5 million (Tier-1), ₦2 million (Tier-2)
Tier-1 operators may operate nationwide and establish franchises with CBN approval.
The new move comes after the CBN revoked 4,173 BDC licences in 2023 over compliance breaches, reducing the number of active operators to around 1,517 before the latest approvals.
