The Central Bank of Nigeria has kept Bureau De Change operators locked out of the official foreign exchange market, with forex traders and market operators telling Nairametrics that the apex bank’s stance is rooted in concerns over control, regulatory oversight, and a history of abuses in the segment. The development underscores the CBN’s continued preference for bank-led FX distribution as it balances liquidity with market stability.Forex traders say the regulator’s caution reflects how the BDC sector is characterized within compliance frameworks. A senior official of the Association of Bureau De Change Operators of Nigeria noted that the generalization of weak compliance with anti-money laundering and terrorism financing rules has ranked the sector as high risk, leading the CBN to favor fewer channels for tighter control and to lean heavily on banks for foreign exchange intermediation. Another licensed trader, Umar Barkinzuwo, explained that the issue centers on control and past market abuses, which is why authorities have chosen to route foreign exchange through the banking system where oversight is more centralized. He added that fears around arbitrage and round-tripping have made the regulator reluctant to fully integrate BDCs into the official FX system, with tighter bank control seen as a way to reduce leakages and improve monitoring of FX flows.
BDCs have long argued that their exclusion constrains liquidity at the retail end of the market and entrenches pressure on the parallel market. They insist that as licensed retail players, they should be part of any lasting solution to exchange rate volatility, especially outside the official window. That push for inclusion intensified after the June 2023 unification of Nigeria’s FX market into a single system. The CBN had halted forex sales to BDCs in July 2021, citing facilitation of illicit financial flows and money laundering. Sales resumed briefly in February 2024 after more than 4,173 licences were revoked, but the arrangement was later discontinued. In February 2026, the CBN approved limited participation that allowed BDCs to access up to $150,000 weekly, yet operators maintain that actual access remains constrained. Traders warn that banks do not efficiently meet retail FX demand, leaving gaps that informal channels quickly fill and sustaining volatility in the parallel market.
The apex bank has continued to roll out measures that try to balance liquidity with tighter oversight. In December 2024, BDCs were granted temporary access to buy up to $25,000 weekly from the Nigerian Foreign Exchange Market to meet seasonal demand, with transactions required at prevailing market rates and a maximum 1% spread for retail sales. BDC operators say they have introduced automation, compliance training, and self-regulation to address the CBN’s concerns. Analysts, however, argue that the ongoing restrictions reflect deeper regulatory worries around transparency, compliance, and control, which continue to shape the CBN’s cautious approach to reintegrating BDCs into the official forex market
