Bureau De Change (BDC) operators under the aegis of the Association of Bureau De Change Operators of Nigeria (ABCON) have hinted at the possibility of mergers, acquisitions, and takeovers by their members to meet the new capital requirement set by the Central Bank of Nigeria (CBN).
The licensed currency traders pointed out that these are some of the options they are working on, harping on the need for the apex bank to strategize with its members across the country to achieve the objective.
The apprehension and anxiety in the sector have persisted as the fate of most of these licensed BDC operators hangs in the air, unless the recapitalization deadline, which had expired, is further extended.
Recall that in May 2024, the CBN had increased the minimum share capital of Bureau De Change Operators to N2 billion for Tier 1 license and N500 million for Tier 2 license as against the previous threshold of N35 million for a general license.
These directives were contained in the CBN’s revised Regulatory and Supervisory Guidelines for BDC operations in Nigeria.
Tier-1 BDCs are permitted to operate nationally, while Tier-2 BDCs will only be allowed to operate within one state of the Federation.
The capital raising initiative is part of the CBN’s reforms to reposition the BDC sector better to fulfill its role in Nigeria’s foreign exchange market.
The new guidelines were issued after consultations with stakeholders and in line with the powers vested in the CBN by Section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
Meanwhile, the BDC operators had initially kicked against this increase in capital requirements from N35 million to N2 billion for Tier-1 BDCs, stating that it is against international best practices.
They called on the CBN to review the N2 billion capital requirement for BDCs to fit into international standards and noted that the licensed currency traders were open to collaboration with the apex banks on some of these policies.
In a bid to allow more time for its implementation, the CBN had in November 2024 extended the deadline for BDC operators to recapitalise by six months, with the new date set for June 3, 2025.
The CBN decided to extend the deadline by six months due to the low level of compliance with the new capital requirements by the licensed currency traders.
Despite the extension, the majority of the BDCs are still unable to meet this new capital requirement and are at risk of shutting down.
Further extension necessary
In an exclusive chat with Nairametrics, the President of ABCON, Aminu Gwadebe, called for a further extension, stating that the BDCs believe this will ensure readiness and inclusiveness.
He said that although the CBN has yet to take a stand on the issue, the atmosphere is full of panic and anxiety among its members.
The ABCON President, who acknowledged that the BDCs are still battling with recapitalization issues, said, ‘’We hope the CBN looks at it critically for a smooth take off.
They are listening, but the decisions have yet to be pronounced. The atmosphere is full of panic and anxiety among our members.
‘’We believed further extension is the first step to ensure readiness and inclusiveness. Definitely, mergers, acquisitions and takeovers are among the many options are members are strategizing and need the CBN collaboration on strategy sessions, communications across zones to achieve the objective.
‘’It can be done and is doable. We are pledging our Support to the reforms and prepared to take our sub-sector to greater heights and meet the objectives of the CBN policy reforms. There is a growing interest among members, I believe, with effective forward communication, to come together and forming partnerships is the best way to go.’’
Gwadebe noted that only a few members of ABCON have adopted some of these mentioned strategies, adding that time is of the essence for the ship not to sink and ensure a smooth takeoff.
He added, ‘’What we are talking here is readiness from both ends of the equation, final licensing, IT, capitalization challenges, integration, refund of capital for shares, operational infrastructure are key fundamentals requirements and can not be ignored.’’
No clear roadmap
Lending his voice to the uncertainty, a BDC operator, Adamu Ardo, admitted that the uncertainty surrounding the CBN recapitalization deadline is shaking their operations.
He said many of the BDCs do not have a clear roadmap on how to meet this deadline, especially with the already tough economy.
He said, ‘’Honestly, this CBN recapitalization deadline is shaking our operations. The uncertainty that surrounds whether they will extend it or not has put serious pressure on us operators. Many of us do not have a clear roadmap on how to meet the new capital requirement, especially with the economy already tough like this.’’
‘’You see, most BDCs operate on thin margins, and to suddenly raise that kind of capital without enough time or support will just push many smaller operators out of business. Everybody is on edge; we cannot even plan long-term again because we do not know whether they’re going to extend the deadline or not. Some of us have even suspended certain transactions or reduced daily volume just to avoid taking unnecessary risks.’’
Gwadebe said the problem is that they have not gotten full clarity from the CBN on implementation details, adding that they hear different rumours, which are destroying market confidence. He pointed out that customers are afraid, as they would like to know if they will still operate after the deadline.
What you should know
Recall that the ABCON President, Aminu Gwadebe, had in May 2025, revealed that only less than 5% of its members have so far been able to meet the new CBN recapitalization requirements for BDC operators.
- He hinted that over 95% of the BDC operators are at risk of shutting down, as their fate hangs in the balance except if the recapitalization deadline is further extended.
- The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, had also cautioned the CBN to be careful so as not to end up creating monopolies in the parallel market as a result of the new capital requirement.
- ABCON had always advocated against a high share capital limit for its members, arguing that the BDC business is not capital-intensive, as they do not take deposits or lend funds to customers.
They said that what the BDCs need is consolidation through mergers of operators and not necessarily recapitalization of the industry, noting that doing that might edge out professionals and highly experienced operators.
