Bureau De Change (BDC) operators in Nigeria have revealed that more than 90% of the country’s foreign exchange (forex) liquidity exists outside the formal banking system, highlighting a critical gap in the Central Bank of Nigeria’s (CBN) efforts to stabilize the currency market. According to Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), this hidden liquidity mirrors the unaccounted cash outside the banking sector and presents an untapped opportunity to ease the current forex crisis.
Following the June 2023 unification of Nigeria’s multiple forex windows, the CBN aimed to consolidate and streamline access to forex. However, BDC operators argue that limited collaboration between them and the apex bank is hindering progress. They emphasize their readiness to share expertise and work with the CBN to formalize liquidity and improve the efficiency of retail forex transactions. They also advocate for access to autonomous banking windows and better integration with international money transfer agencies.
BDC leaders allege that many diaspora remittances are diverted by international money transfer operators (IMTOs) and do not reach official channels, reducing transparency and liquidity in the system. Some commercial banks have echoed similar concerns. Despite policy changes from the CBN, operators say the forex supply from official sources remains erratic, contributing to exchange rate volatility and hampering small business and retail transactions.
In response to the ongoing liquidity crunch, Gwadebe recommended that the federal government monetize underutilized public assets such as the Federal Secretariat in Lagos and Bonny Camp to generate foreign inflows. He also pointed out that despite regulations discouraging dollar transactions in local deals, the government already collects dollars for some bonds and through agencies like immigration.
An Abuja-based BDC operator, Adamu Ardo, added that while there has been a marginal improvement in dollar supply recently, it is still inconsistent and insufficient to meet demand. He stressed the urgent need for predictable forex inflow and warned that without it, the black market will continue to thrive. The BDC community is calling for legislative reforms and inclusive policies to strengthen the forex market, enhance competitiveness, and restore stability to the naira, which they say is becoming increasingly unpredictable due to global economic pressures and domestic regulatory challenges.
Source: Nairametrics