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 Aduragbemi Omiyale
The presidential candidate of the Labour Party in the 2023 general elections, Mr Peter Obi, has expressed worry over plans by the administration of President Bola Tinubu to spend about $11.6 billion on debt servicing.
In a post on his social media platform on Monday, the opposition politician criticised this move, saying it is not good for the country.
He also said this action “should concern anyone interested in the country’s economic future and long-term development.”
The former Governor of Anambra State kicked against the penchant of the government to borrow from various sources without anything to show for it.
“There is nothing inherently wrong with borrowing when it is guided by prudence and directed toward productive investment, he noted, stressing that countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia are all heavily indebted, yet their borrowings are largely channelled into education, healthcare, infrastructure, and innovation – sectors that generate long-term economic returns and sustain repayment capacity.”
According to him, “despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity.”
He said, “Nigeria’s situation, however, is markedly different. A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness.”
“It is also important to note that a huge portion of the debt currently being serviced was accumulated under the Tinubu administration itself, while borrowing has continued at a significant pace. The administration’s recent external borrowing alone includes about $6 billion (from First Abu Dhabi Bank in the UAE—$5 billion, and UK Export Finance via Citibank London—$1 billion), a further $1.25 billion under consideration from the World Bank, and an additional $516 million arranged through Deutsche Bank, bringing the latest known external loan commitments to roughly $7.8 billion. In addition, domestic borrowing through monthly bond issuances continues to add to the overall debt stock,” the businessman also stated.
“Against this backdrop, Nigeria’s 2026 budget shows that health is N2.46 trillion, education is N2.56 trillion, and poverty alleviation is N865 billion, giving a combined total of about N5.885 trillion for these three critical sectors.
“By comparison, debt servicing at about $11.6 billion (approximately N17–N18 trillion, depending on exchange rate assumptions) is almost three times higher than the total allocation to health, education, and social protection combined. This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction.
“Moreover, even within the limited allocations to these sectors, funds may not be fully released, and a significant portion of what is eventually released could be misappropriated,” he further stated.
Mr Obi said, “The central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards. Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.”
By Adedapo Adesanya
Pathway Advisors Limited, an issuing house and financial advisory firm, has announced the successful completion of the Series 2 Commercial Paper issuance for Veritasi Homes & Properties Plc.
The Series 2 offer, issued under Veritasi Homes’ newly registered N20.00 billion Commercial Paper Programme, raised N16.76 billion, significantly above its initial N12.00 billion target on the back of strong institutional demand.
This issuance builds on the company’s track record in the Nigerian debt capital market and follows the recently concluded N10 billion 3-year 20 per cent Series 1 Fixed Rate Bond Issuance, further reinforcing investor confidence in Veritasi Homes’ strong credit profile.
The 364-day tenor instrument attracted robust participation from a diverse pool of institutional investors, underscoring sustained confidence in the Company’s financial strength, operating model, and governance standards.
Commenting on the deal, the Founder/CEO of Pathway Advisors Limited, Mr Adekunle Alade (MBA, FCA, M.CIod), noted that the outcome further validates investor appetite for well-structured transactions in the Nigerian capital market.
“The strong oversubscription speaks to the market’s confidence in Veritasi Homes’ performance, governance, and repayment track record. We are pleased to continue supporting issuers with strong fundamentals in accessing efficient funding.’’
He further highlighted that Veritasi Homes’ consistent market activities since 2022, including successful issuances and full redemption of matured obligations, continue to strengthen its reputation among institutional investors.
“Pathway Advisors Limited remains committed to maintaining its leadership position within Nigeria’s capital markets through the origination and execution of transformative, value-driven, and commercially viable transactions by deploying innovative financial solutions and facilitating strategic capital formation across critical sectors.
“We are committed to supporting credible corporates in accessing efficient short-term and long-term financing solutions within the Nigerian capital market,” he said in a statement on Monday.
Speaking on the transaction, the Managing Director/CEO of Veritasi Homes & Properties Plc, Mr Nola Adetola, described the outcome as a strong endorsement of the company’s fundamentals.
“This result reflects the resilience of our business model, our growing market reputation, and the continued trust of the investment community. We are grateful to all institutional investors for their confidence in Veritasi Homes.”
He added that the proceeds from the issuance will be deployed to support the company’s working capital requirements, enhance liquidity, and complete the ongoing development activities across its real estate portfolio.
Mr Adetola also commended Pathway Advisors Limited for its advisory and arranging role in the successful execution of the transaction.
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has approved the transition to the T+1 settlement cycle for capital market transactions from June 1, 2026.
This is coming some months after Nigeria moved from the T+3 settlement cycle to the T+2 settlement cycle.
The T+ settlement cycle is the number of working days required to complete a capital market transaction, such as the trading of securities, shares, and others, from the first day the trade was executed by an investor.
In a notice on Monday, the SEC, which is the apex capital market regulator in Nigeria, said it was authorising the new system to “promote an efficient, fair, and transparent capital market.”
Under the new arrangement, equities and commodities traded by investors at the market would be cleared and settled by the Central Securities Clearing System (CSCS) within one day.
The agency noted that the migration to a T+1 settlement cycle forms part of its ongoing market modernisation initiatives aimed at enhancing market efficiency and strengthening risk management. reducing counterparty exposure, improving liquidity, and aligning the Nigerian capital market with international standards and global best practices.
“Accordingly, all eligible trades executed in the Nigerian capital market shall settle one business day after the trade date (T+1),” a part of the statement noted.
It was stressed that “Friday, May 29, 2026, shall be the final trading day under the existing T+2 settlement cycle. Trades executed on Friday, May 29, 2026, and Monday, June 1, 2026, shall both settle on Tuesday, June 2, 2026. All trades executed from Monday, June 1, 2026, onward shall be subject to the T+1 settlement cycle.”
SEC tasked all capital market operators, securities exchanges, clearing and settlement infrastructure providers, custodians, registrars, issuers, and other relevant stakeholders to take all necessary measures to ensure full operational readiness and compliance with the new settlement framework.
“Market participants are expected to review and align their systems, processes, controls, and operational workflows ahead of the implementation date,” it further stated, promising to continue to engage stakeholders and monitor the implementation process to ensure an orderly and seamless transition.
The regulator said it remains committed to strengthening market integrity, enhancing investor confidence, and fostering the development of a modern. resilient and globally competitive Nigerian capital market.
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