Nigeria’s central bank has approved weekly foreign currency sales of up to US$150,000 to each licensed bureau de change (BDC) operator in a renewed effort to improve liquidity and stability in the foreign exchange market.
In a circular issued on Wednesday, the Central Bank of Nigeria (CBN) said all licensed BDCs would be allowed to purchase U.S. dollars from authorised dealer banks at prevailing market rates, provided they comply with existing operational and regulatory guidelines.
The move marks another step by the apex bank to broaden access to foreign exchange and narrow the gap between official and parallel market rates, which have widened amid persistent dollar shortages.
“The measure is aimed at deepening market efficiency and ensuring broader access to foreign exchange across the economy,” the CBN said in the circular signed by Musa Nakorji, director of the Trade and Exchange Department.
Nigeria has struggled with chronic foreign currency shortages in recent years, driven by weak oil production, lower export receipts, and declining capital inflows. The naira has come under sustained pressure despite a series of reforms introduced since mid-2023, including the liberalisation of the exchange rate regime and efforts to clear a backlog of unmet FX demand.
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By re-engaging BDC operators in the official FX supply framework, the central bank appears to be seeking to channel dollar liquidity more directly to retail users such as travellers, small businesses, and individuals who rely heavily on BDCs for foreign exchange.
Under previous administrations, BDCs were largely excluded from direct access to official dollar sales over concerns about speculation, rent-seeking, and round-tripping. That policy shift forced many retail FX transactions into the parallel market, where rates often diverged sharply from official levels.
Market analysts said the new arrangement could help ease pressure on the naira if properly implemented and closely monitored.
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“Allowing BDCs to source dollars officially, even at market rates, could reduce reliance on the street market and improve price discovery,” said a Lagos-based currency trader. “However, the impact will depend on the consistency of supply and enforcement of compliance rules.”
The CBN stressed that dollar purchases by BDCs would be subject to strict reporting, documentation, and end-user verification requirements. Operators found to be in breach of guidelines risk sanctions, including suspension or revocation of licences, the bank said.
Nigeria has over 1,500 licensed BDC operators, though industry sources say only a fraction are fully active following years of regulatory tightening and capital requirements that forced many out of the market.
The central bank has in recent months taken several steps to restore confidence in the FX market, including clearing portions of the estimated $7 billion backlog of forward contracts and unpaid obligations to foreign airlines and manufacturers.
It has also encouraged exporters to repatriate proceeds through official channels and introduced reforms aimed at improving transparency on the Nigerian Autonomous Foreign Exchange Market (NAFEM), which now serves as the primary reference rate.
Despite these measures, the naira remains volatile, reflecting underlying structural challenges in Africa’s largest oil producer. Crude output has been constrained by theft, pipeline vandalism, and underinvestment, limiting the country’s main source of foreign exchange earnings.
Economists say improving FX liquidity will require sustained growth in exports, higher oil production, and renewed foreign portfolio and direct investment inflows, alongside credible and predictable monetary policy.
Still, Wednesday’s announcement was seen as a signal that the central bank is adopting a more pragmatic approach to retail FX supply.
“The reintroduction of BDCs into the official FX ecosystem suggests the CBN recognises their role in meeting legitimate retail demand,” said an economist at a Nigerian investment firm. “If managed well, it could help stabilise expectations and reduce speculative pressure.”
The central bank did not specify when the weekly dollar sales would commence or whether the US$150,000 cap would be reviewed in the future but said it would continue to monitor market conditions and adjust policies as needed.
