Bureau de Change (BDC) dealers have begun last-minute scrambling for mergers and fundraising to meet the Central Bank of Nigeria (CBN) recapitalisation deadline which has been extended by six months.
The new deadline given by the apex has become a nightmare for many BDC operators who feel threatened.
Most of the BDCs are scared and uncertain of CBN Governor, Olayemi Cardoso’s next move and what becomes of their business in 2025, NewsNGR can report.
There is anxiety that the CBN will hold its first monetary policy meeting for the year and the foreign exchange dealers are unaware of the next policy announcement and how it will impact their businesses.
Last year, the Cardoso-led CBN issued a guideline that mandates operators to apply for either of the two categories- ‘Tier One’ or ‘Tier Two’ with a minimum capital requirement of N2bn and N500m respectively.
The guideline mandates BDCs to “Re-apply for a new license according to any of the Tiers or license category of their choice as provided in the Guidelines.
“Meet the minimum capital requirements for the license category applied for within six months from the effective date of the Guidelines.
“Applicants for new BDC license are required to meet the conditions for the grant of license in accordance to category of BDC chosen as stipulated in the Guideline.”
Amid panic by BDCs, the Association of Bureaux De Change of Nigeria (ABCON) President, Aminu Gwadabe, broke the news in November that the CBN will be extending the recapitalization deadline for BDC operators from December 3, 2024, to June 3, 2025.
A BDC operator in the popular Zone 4 market, a hub for BDC operators in Abuja, Alhaji Jega, the Chief Executive Officer of Imam BDC Nigeria, told NewsNGR that many BDCs will not meet the new capital requirement despite the extension of the deadline.
He said the capital raise is a way of reducing the size of the market.
Jega said, “The capital requirement is actually a challenging issue but they have given options of high and low-grades BDC of N2bn and N500m. People are running helter-skelter to see how they can come together to see how they can make a common stand.
“Only very few people have succeeded in getting the capital. People are working hard. Not a lot of BDCs will meet the deadline. Very few will meet the requirement. How many people have N2bn and N500m?”
The BDC dealer said his firm is making efforts to mop up liquidity to meet the capital requirement before the new deadline.
“There is no strategy other than mopping money to meet the requirement because there is no alternative to it,” Jega said.
He lamented that the apex bank did not make adequate consultation before arriving at the capital requirements.
The operator lamented, “We just woke up to hear that so and so decision has been reached. It is not that every stakeholder was consulted before the decision was reached.
“They are the alpha and omega. They decide what they want to do regardless of whether it is convenient for stakeholders or not.”
Another BDC operator, Alhaji Umaru told NewsNGR that he is worried that the exercise may be the end of his BDC company.
Umaru said more than 95 per cent of existing BDCs won’t survive the recapitalisation exercise.
“This has become a nightmare to me. I am trying my best to see how we can forge mergers ahead of the new deadline. Considering the manner with which the CBN issues circulars and makes pronouncements, we can’t even tell what they may decide before June 3, 2025,” Umaru lamented.
A former Director General (DG) of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Dr, John Osemede, urged the apex bank to handle BDCs as assets and harness their expertise to stabilize the naira.
Osemede said, “This fight between Central Bank and Bureau de Change, we need to find a way to stop it because we are the losers. You cannot come in as a CBN governor and within one year you are already an expert in Bureau de Change.
“These guys have been in the business for so long. Why are they changing the rules every day? What has happened is that most of them have gone underground sabotaging all of us.
“So, let us find a way to use everyone’s talent and find a way to make Nigeria work.”