How Bureau De Change Operations Work in Nigeria

Bureau de change are merchants that offer the financial service of exchanging one currency for another. In Nigeria, the street trade is dominated by traders from the Hausa/Fulani ethnic group hence bureau de change operators in Nigeria are nicknamed Aboki. Aboki is the Hausa word that means friend.

The operations of bureau de change operators are pretty straightforward, you hand them your local currency and they give you the foreign currency equivalent you require or vice versa. Most Aboki service providers can also exchange two foreign currencies without involving the local naira currency.

The activities of street bureau de change operators in Nigeria used to be licensed and regulated by the CBN, but now, almost anyone can become an operator as long as they have basic maths skills and can keep up with the volatility in Nigeria’s FX market.

Legal and illegal bureau de change in Nigeria

Up until last year, 2021, the CBN used to sell licenses and auction foreign currencies to bureau de change operators in Nigeria. But the CBN would later accuse them of greed and of selling FX above the recommended price to the public. The CBN has since declared the activities of bureau de change operators as illegal and advised Nigerians to only source their FX from the licensed commercial banks which are the only organizations to carry out bureau de change services in Nigeria at the moment.

But there is a big problem with this CBN policy, Nigeria doesn’t earn enough FX to meet the local demand which often leads to a scarcity of dollars at the commercial banks and most people have to circle back to the unlicensed bureau de change operators to get FX. This scarcity of FX in the official market has created a huge demand in the bureau de change market and also skyrocketing prices as an unintended consequence. The price difference between the official market and the bureau the change market is more than #200/$ giving room for bureau de change operators to not only control the market and set prices as they see fit but to also make massive profits.

Though bureau de change operators now operate without license or any regulation, most Nigerians have no choice than to patronize them because of the difficulty in getting FX at the CBN regulated market.

Quickfire FAQs

How do I become a bureau de change in Nigeria?

The CBN used to give licenses and regulate the bureau de change market in Nigeria, but now anyone with a basic knowledge of maths and the exchange rate can become a bureau de change operator in Nigeria. All you need to do is get a shop and register with the CAC. This is not compulsory as the business is no longer regulated in Nigeria. What matters is to be visible to your potential customers, offer good services with fair prices that will establish trust between you and your customers.

Is Bureau de change legal in Nigeria?

Bureau de change is legal in Nigeria, it is not just regulated. This means that you can offer bureau de change services in Nigeria without getting into trouble with the law enforcement, but you will have no legal protection in most cases if you have any problems.

Is bureau de change profitable?

Bureau de change has become especially profitable in Nigeria with the country’s persistent dollar scarcity and the fact that the CBN no longer regulate the market. This means that BDC operators can set the exchange rates in the black market as they see fit and make massive profits.

How do Bureau de change make money in Nigeria?

BDC operators in Nigeria make money in two major ways;

1. they charge a premium on each transaction: this is their main business, they buy low and sell high. A BDC merchant might buy a dollar at the rate of 620/$ and turn around to sell the same dollar to another customer at the rate of 630/$ thereby making a profit of 10 naira on every dollar traded.

2. speculation and hoarding: BDC operators often speculate and hoard foreign currencies with the hope that the exchange rate might go up in the future. For example, a merchant might hoard dollars now that the rate is about 640/$ with the hope that they will sell when the price gets to 700/$ thereby making them a profit from simply holding on to the currency they have.

How much is bureau de change license in Nigeria?

The Central Bank Of Nigeria CBN no longer sells BDC licenses. The apex bank used to sell licenses and regulate the activities of BDCs but later accused them of greed and of selling FX above the regulated price thereby causing the local naira to lose value. Only commercial banks are licensed to sell FX and get it at the regulated price from the CBN.

The main function of the bureau de change is to exchange local currencies for foreign ones at a premium. With the persistent dollar scarcity in Nigeria, this function has never been more profitable.


A writer! Columnist and an academic researcher
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