Economy
CBN-BDC Scuffle: After CBN Ban, BDCs Move to P2P Forex as an Alternative Source of Forex
Over a month has passed since the Central Bank of Nigeria (CBN) stopped selling forex to Bureau De Change (BDC), leaving many wondering how these parallel market operators will continue to operate in the face of the new CBN policy.
BDC operators play an important role in Nigeria’s economy as informal financiers. This creates a strong foundation for cooperation with apex banking. The apex bank was unable to control the BDCs due to greed and the pursuit of abnormal profits. Godwin Emefiele (the Governor of CBN), ended the relationship as he addressed the media during the MPC briefing, Tuesday 27th July 2021.
He stated that in particular, they have noticed with disappointment and great concern that BDC operators had abandoned their original objective for the establishment, which was serving retail end-users who have $5,000 or less. He claimed that they have turned into wholesale dealers in illegal foreign currency, averaging millions of dollars per transaction.
Despite the fact Nigeria being the only country where a central bank sells dollars directly at the BDCs today, operators in the Nigeria BDC market have not reciprocated that gesture to maintain price stability in that segment.
This approach has hurt top Forex brokers in Nigeria multiple times, many of them even abandoning the local market and switching to international instead. Although reports have suggested that the governor may appeal to the apex bank for assistance, his resolve seems unshaken.
There are ongoing investigations on how these developments have affected the operation of BDCs. An operator of a BDC stated anonymously that BDCs can make money other than the CBN sale. He stated that BDCs were not closing down shops.
He explained that funds inflow refers to money that comes from outside Nigeria, mainly from the UK and other European countries and they can receive a large amount of money due to the account BDCs use.
They normally assist customers in accepting these inflows from overseas and facilitate outflows to countries such as China. There are limitations on how much money one can deposit or send to their domiciliary accounts.
“However, BDC operators have relationships with parties around the world that can facilitate smooth and seamless payment.” He said that there was no way for him to source foreign currency in Nigeria right now.
Abbas, another BDC operator, stated that it is important to be creative in dealing with difficult situations in Nigerian businesses and BDCs are no exception.
He joked that those who cannot keep up with the pace of business would need to shut down. Nigeria is only for the strong players, he says. BDC operators that cannot overcome challenges will have to close their doors.
“It’s not easy to get dollars but for the moment, most of my colleagues and I have discovered that dealing directly with customers has proven more profitable than dealing with licensees.”
He said that he only uses customers with proper documentation like passports and travel documents to get the maximum amount of personal or business travel allowances (PTAs) from banks. Because of the large number of people who are interested in travelling out of the country, this is a significant source of forex supply for BDC operators.
This avenue has been very profitable as it has allowed them to purchase dollars at a lower price and then sell them at black-market rates, while still making significant profits. While this method is not sustainable, he believes that there will be more creative channels soon.
Ango, a BDC operator, also confirmed that BDC operators work in partnership with individuals to obtain FX from banks.
“If someone wishes to take a personal travel allowance, they will need to show us their documentation. We would then fund his account to receive the maximum amount from the bank. Everyone gets a cut so the transaction runs smoothly. The licenses are ineffective at the moment because the CBN has stopped giving us dollars,” he said.
BDC operators are now more dependent on peer-to-peer transactions to fund their dollar supplies in the face of the CBN dollar sales ban. People with strong networks of buyers or sellers attract more business, while those who don’t have such strong networks are less likely to be successful in attracting volume.
However, exchange rates continue to be transacted at black market rates that are higher than those preferred by the central banks.
BDCs’ reactions to the ban by the apex bank raise questions about the effectiveness of Nigerian monetary policy. Can they sideline a major player in the foreign currency space and directly deal with banks? In this case, the end should justify the means. However, there have been very few results as the naira is still extremely weak against the dollar.
The rate at the parallel market was N530 per dollar at the time this article was written. This indicates that black-market forex is still in high demand.
By Adedapo Adesanya
The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said ongoing reforms and strategic policy implementation in Nigeria’s petroleum sector are driving significant investments and strengthening the country’s position as a leading energy destination in Africa.
Mr Lokpobiri stated this at the Management Retreat of the Ministry of Petroleum Resources, where he stressed the need for improved institutional performance and accountability to sustain growth in the sector.
According to the Minister, the federal government has deliberately pursued far-reaching reforms aimed at creating a stable and investor-friendly environment capable of attracting local and foreign capital into the oil and gas industry.
“From far-reaching institutional reforms to the effective implementation of strategic policies, we have remained committed to carrying all stakeholders along, fostering a conducive environment for investments to flourish,” Mr Lokpobiri said.
“As a result, our petroleum sector has witnessed significant investments that continue to strengthen Nigeria’s position as a leading energy destination.”
The Minister noted that the gains recorded in the sector were the product of collective efforts across the Ministry and its agencies, commending staff for their dedication and professionalism.
“The Management Retreat of the Ministry of Petroleum Resources provided an important platform to reiterate that these accomplishments would not have been possible without the collective dedication, professionalism and teamwork of every staff member across the Ministry and its agencies,” he stated.
Mr Lokpobiri said the retreat, themed Driving Institutional Performance and Accountability in the Petroleum Sector for Sustainable National Development, underscored the importance of continuous improvement in service delivery and operational efficiency.
Drawing lessons from the theme, he urged officials of the Ministry and regulatory agencies to intensify efforts toward enhancing institutional effectiveness and strengthening governance frameworks.
“I encouraged that we must redouble our efforts, continuously improve the quality of our services, and strengthen institutional performance,” he said.
The Minister further emphasised the continued relevance of fossil fuels in the global energy mix, stressing that Nigeria must leverage its hydrocarbon resources to drive economic growth while ensuring citizens benefit from ongoing reforms.
“With fossil fuel as the dominant source of energy, we must ensure that Nigerians experience the benefits of our progress and that Nigeria remains the preferred investment destination in Africa and a globally competitive hub for energy investments,” Mr Lokpobiri added.
By Aduragbemi Omiyale
The N3.2 billion rights issue of Universal Insurance Plc has been extended by almost two weeks after securing regulatory approval.
The exercise was earlier scheduled to close on June 10, 2026, but will now close on Monday, June 22, 2026.
The extension was granted by the Securities and Exchange Commission (SEC) after a request from the underwriting organisation.
In the rights issue, Universal Insurance is offering to shareholders 2,666,666,667 ordinary shares of 50 Kobo each at N1.20 per share on the basis of one new ordinary share for every existing six ordinary shares held as of the close of business on Monday, March 30, 2026.
Subscription for the acquisition of the company’s extra shares opened on Wednesday, May 13, 2026.
The extension gives investors more time to increase their stake in the insurance firm, which intends to use proceeds from the exercise to boost its capital base, as mandated by the National Insurance Commission (NAICOM).
Insurance companies operating in Nigeria have been given till July 31, 2026, to shore up their capital base or pack up. Operators can also explore a merger if they wish.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited opened its doors to market participants in four days last week as a result of a public holiday observed on Friday, June 12, for 2026 Democracy Day in the country.
In the week, investors bought and sold 4.964 billion shares worth N207.521 billion in 235,966 deals, as against the 3.966 billion shares valued at N175.659 billion that exchanged hands in 343,587 deals a week earlier.
Analysis showed that the financial services industry led the activity chart with 4.116 billion shares valued at N84.607 billion in 96,165 deals, contributing 82.92 per cent and 40.77 per cent to the total trading volume and value, respectively.
The services sector transacted 232.479 million shares worth N4.955 billion in 17,614 deals, while the industrial goods segment exchanged 144.988 million shares worth N39.077 billion in 24,775 deals.
Sterling Holdings, FCMB, and Access Holdings were the most traded stocks with 2.883 billion units sold for N36.188 billion in 15,533 deals, accounting for 58.09 per cent and 17.44 per cent of the total trading volume and value, respectively.
A total of 40 equities appreciated in the week versus 23 equities in the previous week, 53 equities depreciated versus 65 equities a week earlier, and 53 equities remained unchanged versus 58 equities in the preceding week.
ABC Transport was the best-performing equity for the week after it gained 25.60 per cent to trade at N7.80, Consolidated Hallmark appreciated by 23.13 per cent to N8.25, Abbey Mortgage Bank rose by 21.93 per cent to N11.40, Infinity Trust Mortgage Bank grew by 20.32 per cent to N11.25, and Austin Laz soared by 15.16 per cent to N4.33.
The worst-performing equity last week was Fidson Healthcare because of its 25.86 per cent loss, closing at N101.20. Neimeth declined by 19.14 per cent to N8.55, Union Homes REIT shed 17.36 per cent to close at N70.00, SUNU Assurances slipped by 11.38 per cent to N3.97, and Unilever Nigeria dropped 10.26 per cent to trade at N140.00.
As for the index movement, the All-Share Index (ASI) and the market capitalisation chalked up 0.88 per cent each to settle at 244,738.74 points and N156.970 trillion, respectively.
Similarly, all other indices finished higher apart from the pension, AFR Bank Value, MERI Growth, MERI Value, consumer goods, Lotus II, industrial goods, sovereign bond and commodity indices, which fell by 0.03 per cent, 1.20 per cent, 0.21 per cent, 1.61 per cent, 0.54 per cent, 0.51 per cent, 1.00 per cent, 2.04 per cent and 0.34 per cent, respectively.
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