The Central Bank of Nigeria (CBN) has released a new list of Bureau de Change (BDC) dealers, with the number of approved operators reduced to 2,991.
BDCs in Nigeria are the major influencers of exchange rate.
The document, titled: Approved BDCs, revealed that the licenses of 2,698 BDCs have been withdrawn.
The CBNs decision to withdraw the licenses of 2,698 BDCs comes as the naira continues to free fall. The naira fell to N795.28 at the Investors and Exporters FX window and was even weaker when it closed at N809 per dollar last Friday.
Recall that in 2022, the Central Bank published a similar list in a document, titled: List of CBN Licensed Bureaux De Change As at December 31, 2021, whereby the CBN had approved 5,689 black market dealers.
It should be noted that since the CBN adopted a floating exchange rate system in June, the value of the naira has declined significantly.
Under the leadership of Bola Tinubu, the Policy Advisory Council Report: National Economy Sub-committee recommended key reforms, including raising the capitalisation requirements for BDC operators. Additionally, the council proposed that Nigerian banks be allowed to act as primary dealers in supplying the forex market.
President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, expressed concerns about the exclusion of BDCs from the Investors and Exporters window, stating that it contributes to the volatility of the foreign exchange market.
The volatility of the naira continues to underpin the slow economic growth of Nigeria. The I&E window is laudable, its patriotic and nationalistic, but there is no policy that can actualise its mission without carrying 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 Gwadabe.
