Some Bureau De Change operators are still struggling to meet the fresh N2bn recapitalisation threshold of the Central Bank of Nigeria despite the extension they received in December.
The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, disclosed this in an exclusive chat with The PUNCH on Saturday.
In a circular issued in May 2024, the CBN released fresh guidelines for the operations of the Bureau De Change in Nigeria, which include two new categories of licenses with different capital bases.
According to the new rules, BDCs in the Tier 1 category would be required to have a minimum capital requirement of N2bn, pay N1m as a non-refundable application fee, and N5m as a non-refundable license fee.
The apex bank disclosed that Tier 2 BDCs would be required to have a minimum capital base of N500m, N0.25m as a non-refundable application fee, and N2m as a non-refundable license fee.
In December, ABCON revealed that the CBN has extended the deadline for BDC operators to recapitalise by six months, indicating that the new deadline was now June 3, 2025.
Highlighting the level of activities geared toward meeting the new capital base, Gwadebe said, “I think compliance is still very lukewarm. A lot of our members are still saying it is difficult for them to meet up. However, I don’t have a record of who has complied, and it is difficult for me to say the level of compliance, but I know that the majority of our members are still talking about difficulties in meeting the requirements.”
The ABCON boss added that the merger was still a top consideration for his members, saying, “I said members are having strategic sessions to consider various options to make it easier for them to meet up since the CBN has insisted that the financial requirement is not going to be reviewed for that, that it is an industry practice.
“However, we are still engaging the Central Bank to see if we can still have a kind of consent to review. As it is, we have secured an extension to see how we can meet up. It is a difficult one. No doubt, it will affect a majority of our members. However, the strategy we are putting in place is to see how members can come together and meet the financial requirements.”
Speaking on the outlook of the naira for 2025, Gwadebe hinged it on a robust supply side.
“The government has a reference of 1500/dollar, and the official rate is about 1540/$. Unfortunately, the gap is still a bit high between the official and the parallel market rate. It is only a matter of the supply side of the market through the interventions of the central bank because the CBN is the catalytic actor in the foreign exchange market.”
A lot of supply really depends on their own injection of liquidity into the market.
“Also, not long ago, they issued a circular whereby they directed the BDCs and the banks to do autonomous transactions to buy through the Electronic Foreign Exchange Matching System windows. Even that has yet to take off. If that has been implemented fully, I also see hope of liquidity improving.
“The issue is perception. Once people can perceive that there is liquidity in different levels of the market, with BDCs as the third leg of the foreign exchange market. If people perceive that there would be liquidity, the urge to speculate or hoard or the desire to make a demand that they don’t need will reduce. These are the factors that are putting pressure on the exchange rate. Once that has been checkmated, I’m so sure that the naira would continue to strengthen within that 1500-1600/$ range.”
On the fresh circular from the CBN regarding the introduction of ordinary and investment accounts for Nigerians in the diaspora, Gwadebe said, “Diaspora remittance is a critical component of our sources of foreign exchange. I believe that if there are not many difficulties, Nigerians should be able to participate in that programme.
“I’ve not seen the modalities. Even before the circular, I knew that a lot of Nigerians in the Diaspora operated domiciliary accounts here in Nigeria with commercial banks.”
The CBN on Friday announced the introduction of the Non-Resident Nigerian Ordinary Account and Non-Resident Nigerian Investment Account targeted at Nigerians in the diaspora.
“The NRNOA enables non-resident Nigerians to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies, while it enables non-resident Nigerians to invest in assets in Nigeria in either foreign currency or local currency (naira). Account holders may maintain both a foreign currency (FCY) account and/or a local currency (naira) account to facilitate transactions and participate in diverse investment opportunities.
“The benefits derivable include, but are not limited to, the following: improved access for NRNs to opportunities in the Nigerian economy and increased contribution of the diaspora community to the socio-economic development of Nigeria.
“NRNs can use their NRNIA to participate in Nigeria’s Diaspora Bond and other debt instruments issued locally, specifically targeted at the Nigerian diaspora or available to the investing public. The account will also serve as a conduit for NRNs to manage their funds directly in a safe and secure environment and reduce the reliance on third parties in meeting local commitments and obligations.”