Northern BDC Operators Raise Alarm Over CBN’s New N2bn Recapitalisation Directive

Bureau de Change (BDC) operators in Northern Nigeria have expressed deep concern over the Central Bank of Nigeria’s (CBN) recent directive mandating BDCs to raise their minimum share capital to N2 billion.

The new policy, which was unveiled as part of the apex bank’s efforts to sanitise the foreign exchange market and curb speculation, has triggered fears that many small and medium-sized BDCs in the region could be forced out of business.

Speaking under the umbrella of the Northern BDC Operators Forum, stakeholders described the recapitalisation policy as “unrealistic and detrimental” to the financial inclusion gains made in Northern states where BDCs play a crucial role in providing forex services to small traders, students, pilgrims, and informal businesses.

The forum’s chairman, Alhaji Musa Ahmed, noted that while the CBN’s goal of stabilising the forex market is commendable, the timeline and scale of the recapitalisation are simply beyond the reach of most operators in the North, many of whom are small businesses already struggling with economic headwinds.

“This new capital base is something only big players in Lagos and Abuja can afford,” Ahmed stated. “Thousands of our members cannot raise such huge sums. If forced to shut down, it will deepen unemployment and push informal forex trading underground, which defeats the purpose of regulation.”

The CBN had announced the new minimum capital requirement in its recently released guidelines, stipulating that existing BDCs must comply within a set timeframe or risk losing their operating licences. The directive is part of wider reforms aimed at curbing sharp practices, improving transparency, and aligning the country’s forex regime with global standards.

However, Northern operators argue that the directive does not take into account the peculiar socio-economic realities of their region, which has fewer large investors compared to the South. Many BDCs in Kano, Kaduna, Sokoto, and other states operate on slim margins and serve low-income clientele who depend on them for legitimate foreign exchange needs, such as school fees abroad and religious pilgrimages.

Economic experts say the policy may trigger a wave of mergers and acquisitions among BDCs, but fear that in regions like the North where trust and family ties often define businesses, forced mergers may be impractical.

Analysts also warn that shutting down smaller BDCs could inadvertently boost unlicensed forex trading, pushing transactions into unregulated channels and frustrating the CBN’s drive for a transparent and stable market.

In response to the growing backlash, some industry stakeholders are calling on the CBN to consider a phased or tiered recapitalisation plan that recognises the disparity between operators in urban commercial centres and those in less developed areas.

Ahmed stressed that the forum is not against reforms but wants them implemented in a way that does not marginalise thousands of small BDC owners and their employees. “We are ready to work with the CBN, but we appeal for a more realistic plan that will not cripple our businesses overnight,” he said.

As the deadline for compliance draws closer, many BDC operators in the North are hoping for dialogue with the apex bank to explore more flexible models that safeguard both the integrity of the forex market and the survival of small businesses.

The development has sparked wider debate among economists, with some backing the CBN’s tough stance to curb speculation and money laundering, while others argue that the abrupt capital hike could do more harm than good in a fragile economy already battling inflation and dwindling purchasing power.

With the policy now in motion, all eyes are on how the CBN will balance its push for stronger, more transparent forex operators with the urgent pleas from regions that fear being left behind.