Breaking: CBN Revokes Licenses of Bureau de Change Operators as naira continues free fall

“Central Bank of Nigeria Takes Strong Action: Revokes Licenses of Thousands of Bureau de Change Operators”.

 

The Central Bank of Nigeria (CBN) has withdrawn the operating licenses of 2,698 Bureau de Change (BDC) operators and released a list of approved dealers.

 

According to the fresh list published by the apex bank, the total number of approved BDC dealers has been reduced to 2,991.

 

The document titled ‘Approved BDCs’ reveals that the licenses of 2,698 BDCs have been withdrawn.

 

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In 2022, the Central Bank published a similar list in a document with reference: REF: FPR/DIR/PUB/CIR/001/037, titled ‘List of CBN Licensed Bureaux De Change As at December 31, 2021,’ where the CBN had approved 5,689 black market dealers.

 

BDCs in Nigeria are major influencers of the exchange rate.

 

Prior to the Bola Tinubu era, the operators had grown from 74 in 2005 to 5,689 in 2021.

 

The BDCs grew by more than 100 percent under Emefiele, who later banned the sale of foreign exchange to BDCs due to round tripping and involvement in illegal financial flows.

 

Under Tinubu, a document titled ‘Policy Advisory Council Report: National Economy Sub-committee’ advised the implementation of key reforms, such as raising the capitalization for BDC operators.

 

Another suggestion by the council was for the CBN to allow Nigerian banks to operate as the primary dealers supplying the forex market.

 

Since the naira was floated by the CBN in June, the currency has fallen to N795.28 at the Investors’ and Exporters’ FX window.

 

The situation is worse in the parallel market, where it closed at N820 per dollar, N1095 per British pound, and N905 per Euro.

 

In a recent statement, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, said the FX market would remain volatile because BDCs are excluded from the I&E window.

 

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‘The volatility of the naira continues to underpin the slow economic growth of Nigeria. The I&E window is laudable; it’s patriotic and nationalistic. However, there is no policy that can actualize its mission without considering the interest of the subsector (which is the BDCs).

 

“The I&E window is supposed to run on three legs: the banks, the CBN, and the BDCs. Overtly or covertly, the BDCs are missing,” said Gwadebe.”