The BDCs have supported Nigeria’s growth agenda and the CBN’s commitment to exchange rate stability and regulation for the industry.Ī number of erring BDC operators have been sanctioned by the CBN and the Association of Bureaux De Change Operators of Nigeria in line with the industry’s zero tolerance for regulatory abuse.

The BDC sector has for decades remained a critical component of the Nigerian financial market, playing a pivotal role in exchange rate stability and job creation. “The growth for me is a reflection of distortion in the market and this has led to a proliferation of the BDCs, as many are there for round-tripping,” he said.Ī BDC, according to the CBN, is any company that is licensed to carry on small-scale foreign exchange business in Nigeria and whose sole object is the carrying on of such business on a stand-alone basis. Those who are involved in round tripping are almost overshadowing those who are doing the business as originally construed, he said. The higher the premium, the more they see it as patronage,” said Muda Yusuf, chief executive officer of Centre for the Promotion of Private Enterprise.Īccording to him, the more the disparity in rate, the more people register, even as some people are having more than one licence. The higher the premium, the more attractive it is to be in that business. “Why there are so many of them is because of the level of premium between the official and parallel market rates. The official exchange rate, which is the Investors and Exporters forex window rate, stood at N427.75 per dollar as at July 8, 2022, while the BDC rate closed at N615 on July 12. The exchange rate premium between the official and BDC rates is N188 or 44.02 percent as at July 12, 2022. The number of the Bureau de Change (BDC) operators in Nigeria has risen by more than 75-fold in 16 years, from 74 in 2005 to 5,689 in 2021, data from the Central Bank of Nigeria (CBN) indicated.Ĭompared with the 2015 figure, under the current administration, the number of the BDCs has risen by over 100 percent from 2,839 six years ago.īusinessDay’s finding shows that the astronomical increase in the number of BDCs was a result of attractive exchange rate premiums.

Exchange rates