Updating capital requirements for Bureau de Change (BDC) operators set by the Central Bank of Nigeria (CBN) is still a hard nut to crack as the deadline draws near. The latest operational guidelines were released by the CBN in May 2024 and became effective on June 3, 2024.
The new guidelines require existing BDCs to reapply for fresh licenses under Tier 1 or Tier 2 categories and meet the prescribed capital within six months. The minimum capital base for Tier 1 BDCs is N2 billion, while Tier 2 BDCs must have at least N500 million. Moreover, operators are required to pay non-refundable licensing fees of N5 million for Tier 1 and N2 million for Tier 2. However, even with the fast-approaching deadline, no notable activity has happened within this sector regarding recapitalization, mergers, or acquisitions.
BDC operators have raised alarm over strict conditions, stating that it would be difficult for them to meet such financial needs due to policy uncertainty, lack of clarity, and the depreciating naira value.
Aminu Gwadabe, President of the Association of Bureau de Change Operators of Nigeria (ABCON), warned that if implemented, there will be unintended consequences on the economy, including driving formalized operators into the informal sector, money laundering, increasing unemployment rates, and worsening the situation.
