The Central Bank of Nigeria has recently announced that it will sell $20,000 worth of foreign exchange to each eligible Bureau De Change (BDC) operator across the country. This comes three years after the suspension of foreign exchange sales to BDC operators by the former CBN governor, Godwin Emefiele, due to concerns over the operators’ compliance with FX regulations and licenses. The apex bank disclosed this in a new circular issued and signed by the Director, Trade and Exchange Department, Hassan Mahmud, on Tuesday.
There are currently 5,690 BDC operators in Nigeria, but only 1,373 BDC operators have been screened to receive the allocation. The breakdown includes Abuja, with 186 operators; Awka, with 26 operators; Kano with 376 operators, and Lagos with 785 operators.
The latest circular approving the sale of forex to the BDC operators was titled “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions” and was aimed at rectifying the persisting distortions in the retail segment of Nigeria’s foreign exchange market and bridging the widening gap in the exchange rate. The allocation will be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of the previous trading day, dated February 27, 2024.
The CBN has put several initiatives in place to save the free fall of the naira, including probing and clearing FX backlog, limiting forex for foreign education and medical tourism, and increasing BDCs’ minimum share capital.