The Central Bank of Nigeria (CBN) has continued to impose restrictions on Bureau De Change (BDC) operators’ access to the official foreign exchange (FX) market, citing persistent concerns over regulatory control and past abuses.
Insights from forex traders and market operators indicate that the apex bank continues to favour a bank-led FX distribution model, driven by the need to strengthen compliance and ensure market stability.
Concerns over practices such as arbitrage and round-tripping have also reinforced the regulator’s cautious stance toward the BDC segment.
BDC operators have repeatedly expressed frustration over limited access to foreign exchange from the official window, noting that the constraints have made it difficult for many to meet operational expenses. They have consistently called for greater participation in the FX market, arguing that broader inclusion would improve liquidity and support the effectiveness of CBN policies.
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Forex traders say the regulator’s position is largely influenced by risks associated with compliance, particularly around anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks.
A senior official of the Association of Bureau De Change Operators of Nigeria (ABCON) stated that the sector is often perceived as high-risk due to compliance gaps, prompting the CBN to prioritise fewer, more manageable channels.
“The generalisation of weak compliance with anti-money laundering and terrorism financing requirements has classified the sector as high-risk. This has led to the CBN’s preference for tighter control through fewer channels and a stronger reliance on bank-led FX intermediation,” the official said.
Another licensed forex trader, Umar Barkinzuwo, attributed the restrictions to concerns over oversight and past market distortions.
“The issue appears to revolve around control and previous abuses. Authorities have preferred to channel foreign exchange through the banking system, where oversight is more centralised,” he said.
He added that fears surrounding arbitrage and round-tripping have contributed to the reluctance to fully integrate BDCs into the official FX framework.
Market participants note that tighter control through banks is seen by the regulator as a way to minimise leakages and improve monitoring of FX flows.
However, BDC operators argue that excluding them from the official market limits liquidity at the retail end and sustains pressure on the parallel market. They insist that, as licensed retail FX providers, their inclusion is critical to addressing exchange rate volatility.
The call for inclusion gained momentum following the June 2023 unification of Nigeria’s FX market, which merged multiple exchange windows into a single system.
The CBN had, in July 2021, halted forex sales to BDCs, accusing them of facilitating illicit financial flows and money laundering. Although sales briefly resumed in February 2024 after the revocation of over 4,173 licences, the arrangement was later discontinued.
In February 2026, the apex bank approved limited participation, allowing BDCs to access up to $150,000 weekly. However, operators maintain that actual access remains constrained.
Traders also warn that banks do not always efficiently meet retail FX demand, creating gaps that informal channels quickly fill—thereby sustaining volatility in the parallel market.
The CBN has continued to roll out measures aimed at balancing liquidity with stricter regulatory oversight. In December 2024, BDCs were granted temporary access to purchase up to $25,000 weekly from the Nigerian Foreign Exchange Market (NFEM) to meet seasonal demand, with transactions conducted at prevailing market rates and a maximum 1 per cent spread for retail sales.
BDC operators say they have introduced reforms, including automation, compliance training and self-regulation, to address regulatory concerns.
Despite these efforts, analysts note that the continued restrictions reflect deeper issues around transparency, compliance and control, which remain central to the CBN’s cautious approach to integrating BCs into the official FX market.
