Nigeria’s central bank has issued final licences to 82 bureaux de change under strict new foreign-exchange rules, nearly a year after it revoked more than 4,000 permits in one of the country’s largest regulatory crackdowns in decades.
The Central Bank of Nigeria (CBN) said the approvals followed revised guidelines that came into force on November 27, part of a broader restructuring aimed at tightening oversight and cleaning up a sector long associated with weak compliance, arbitrage and illicit forex dealings.
The move follows a turbulent period for Africa’s largest economy, which has been battling persistent dollar shortages, soaring inflation and repeated currency devaluations. The naira has lost significant value since mid-2023, when the government dismantled its multiple exchange-rate windows and floated the local currency in a bid to attract foreign investment and restore transparency to the market.
As pressure mounted, the parallel market flourished. Informal trading floors particularly in Lagos, Abuja and Kano became key sources of hard currency for businesses and individuals shut out of the official market. Regulators blamed the proliferation of loosely supervised bureaux de change for fuelling speculation and worsening volatility.
Nigeria’s Forex reforms
In August 2023, the central bank revoked the licences of 4,173 bureaux, citing breaches ranging from failure to file mandatory transaction reports to violations of anti-money laundering and counter-terrorist financing rules. It also banned street trading of foreign exchange, a long-standing feature of Nigeria’s informal financial ecosystem.
Under the revised framework, bureau operators must now meet a minimum capital base of 2 billion naira (about US$1.38 million), a dramatic increase from previous levels. The CBN said the tougher rules were designed to strengthen compliance standards, improve transparency and curb round-tripping the practice of purchasing dollars at official rates and reselling them for profit on the parallel market.
The newly approved 82 bureaux represent operators who successfully met the upgraded capital, governance and operational requirements. Their names have been published on the regulator’s website, which the CBN said will serve as the definitive list of authorised forex dealers.
“The public is strongly advised to refrain from dealing with unlicensed operators,” the central bank said, warning that operating without a valid licence is a criminal offence.
The reforms form part of a broader currency-market overhaul launched by President Bola Tinubu’s administration, which has prioritised restoring investor confidence after years of inconsistent policy and tight currency controls. The government has also taken steps to reduce fuel subsidies, boost tax revenues and attract foreign capital measures that have drawn praise from international institutions but have fuelled short-term hardship for ordinary Nigerians.
Economists say the clean-up of the forex sector is crucial to stabilising the naira, though the impact may take time to filter through. Limited supply of dollars remains a key pressure point, driven by weak oil output, falling foreign investment and a backlog of unmet demand from importers and airlines.
Analysts also warn that the crackdown on street traders long a source of quick liquidity for households and small businesses has pushed many transactions deeper underground, making informal trading harder to monitor. While the CBN hopes that a smaller, better-regulated network of bureaux de change will eventually bring more activity back into the formal market, the transition has been rocky.
Still, the central bank insists the reforms are necessary to establish a credible price-discovery mechanism and curb the volatility that has eroded confidence in the currency. Officials say additional compliance directives and monitoring schedules will be issued as newly licensed operators begin operating under the strengthened framework.
For millions of Nigerians who rely on retail forex dealers for school fees, medical bills and import financing, the impact of the reforms will hinge on whether the official market can meet demand and whether the new system can withstand the structural pressures that have long plagued Nigeria’s currency regime.
