TheCable

The inability of the Central Bank of Nigeria (CBN) to adequately supervise the operations of Bureau De Change (BDC) centres has led the operators to request approval to consolidate their businesses.

Aminu Gwadabe, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), told TheCable on Wednesday that the number of licensed BDCs is too much for the CBN to monitor and supervise.

To consolidate a business involves the merger or combination of different units or companies into a single entity or a few more prominent organisations.

Gwadabe said there are up to 6,000 BDC centres in Nigeria.

This, he said, is more than those in the United States and China — even though their population is higher compared with Nigeria.

“BDC is about 6,000, which is a challenge to the Central Bank of Nigeria. In the whole world, it is only in Nigeria that you have 6,000 bureau de change,” Gwadabe said.

The ABCON president said the CBN has acknowledged their proposal, however, there is no specific timeframe for the approval or implementation of the consolidation.

He said if the banks, insurance companies and microfinance banks are allowed to merge in order to strengthen them, there’s no reason the BDC operators cannot consolidate.

The forex trader absolved the BDCs of blame for the high number of operators in Nigeria, saying they are not in charge of issuing licences.

ABCON SEEKS A 900 PERCENT INCREASE IN CAPITAL BASE

Furthermore, Gwadabe said the association also requested for the capital base requirements to be increased from N35 million to N350 million as part of the merger.

When quizzed on the impact the 900 percent increase in the capital base would have on members, he said the consolidation would make it possible for the small BDCs to capitalise at N350 million.

“The numbers is (sic) not helping anybody. It is not helping the operators, it is not helping the regulators, so then we can consolidate,” he added.

Gwadabe referenced President Bola Tinubu’s reform plans for the BDC market, which he believed would force each ABCON member to capitalise at N1 billion.

The ABCON leader complained about the billion-naira capitalisation, making it known that it would be impossible for each BDC to achieve the N1 billion capitalisation, noting that the N350 million capitalisation through consolidation is more feasible.

“As small as I earn, you say I should capitalise N1 billion, how can I meet up? But if you allow me to consolidate and have like minds, that we can come together,” Gwadabe explained.

He said it is unfair that eyebrows are being raised because the BDC operators are looking to consolidate their operations.

“When microfinance banks were reduced, when banks were reduced, when insurance companies were reduced, nobody talked about it, is it BDCs we are now talking about? We are not fair,” ABCON president said, expressing his displeasure.

In a document reported in June, Tinubu’s policy advisory council advised that the president should ensure only strong, well-capitalised and automated BDCs are allowed to operate.