Nigeria’s apex bank, the Central Bank of Nigeria (CBN), has continued to limit the access of Bureau De Change (BDC) operators to the official foreign exchange (FX) market, citing persistent concerns over regulatory control and past abuses within the segment. Insights from market operators reveal that the move reflects the regulator’s preference for a bank-led FX distribution system, as it seeks tighter monitoring of foreign exchange flows and improved market stability.
For many traders and stakeholders, the restrictions are not entirely surprising. Concerns around practices such as arbitrage and round-tripping have long trailed the BDC sector, raising red flags for regulators. As a result, the CBN appears to be prioritizing centralized oversight through commercial banks, which it believes offers a more controlled environment to curb financial leakages and enforce compliance standards.
Industry voices, including officials from the Association of Bureau De Change Operators of Nigeria (ABCON), argue that the broad classification of BDCs as high-risk entities has contributed to their exclusion. Traders say the apex bank’s cautious approach is largely driven by anti-money laundering concerns and the need to prevent illicit financial flows. While some licensed operators acknowledge past issues, they maintain that reforms have been introduced to improve transparency and accountability across the sector.
Despite these efforts, BDC operators continue to express frustration over limited access to forex, warning that their exclusion weakens liquidity at the retail end of the market. According to them, this gap is often filled by informal channels, which can further destabilize exchange rates. The situation has become more pronounced since the FX market unification in 2023, which was expected to streamline access but has instead intensified calls for broader participation.
The policy direction also reflects a broader balancing act by the CBN—ensuring sufficient liquidity while maintaining strict regulatory oversight. Although the bank has introduced limited access windows in recent years, including capped weekly allocations, analysts believe the restrictions highlight deeper concerns around compliance and control. For everyday Nigerians and small businesses relying on retail forex, the outcome is a market still grappling with volatility and uneven access.
source: nairametrics