Recapitalization Deadline Looms as Only 10% of Nigeria’s Bureau De Change Comply; Industry Faces Major Shakeup
The recapitalisation deadline for Nigeria’s Bureau De Change (BDC) operators expires today, with less than 10 percent of the approximately 1,500 licensed BDCs having met the Central Bank of Nigeria’s (CBN) new capital requirements. Originally set for December 2024, the deadline was extended by six months to June 3, 2025, in an effort to give operators more time to comply. Despite the extension, most BDCs remain far from meeting the new recapitalisation thresholds, raising concerns over the sector’s stability.
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), highlighted the dire situation, warning that over three million people could lose their livelihoods due to the low compliance rate. He appealed to the CBN for another extension and urged a review of the financial requirements, emphasizing the ongoing efforts of operators to meet the conditions. The new two-tier recapitalisation framework demands Tier-1 BDCs raise at least N2 billion to operate nationwide, while Tier-2 BDCs must raise N500 million to operate within a single state.
The pressure from these capital demands is expected to force smaller operators either out of the market or into mergers and acquisitions. ABCON is actively negotiating with the CBN and other agencies to soften the blow and promote structural solutions like mergers and investor buyouts. Gwadabe explained plans to group operators into clusters that can collectively meet capital thresholds and is seeking regulatory approval to establish public limited liability companies to accommodate more members.
Industry experts foresee significant consolidation as a result of these changes. Tilewa Adebajo, CEO of CFG Advisory, noted that while some BDCs will survive, most smaller players will be squeezed out, ultimately leaving a more structured and professional industry. Ayodele Akinwunmi from FSDH Merchant Bank echoed this view, predicting mergers and acquisitions will create stronger players capable of serving Nigeria’s retail foreign exchange market.
As the recapitalisation deadline closes, the sector faces a critical turning point. The CBN’s continued engagement with stakeholders during any possible extension period will be crucial to mitigating job losses and providing clarity for investors and operators. Without further concessions or adjustments, many smaller BDCs may exit, reshaping the industry landscape and potentially impacting millions dependent on the sector.