Group wants CBN to ensure forex market transparency, reveal BDCs’ beneficial owners

The Center for Fiscal Transparency and Public Integrity (CeFTPI) on Monday called on the Central Bank of Nigeria (CBN) to disclose the beneficial owners of all licensed Bureau De Change (BDC) businesses in Nigeria, as part of broader efforts to ensure a transparent foreign exchange market in Nigeria.

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“The continued weakening of the naira, despite all the economic adjustments, suggests that the country is yet to tackle the real problem: an opaque and manipulated forex market,” the group said in a press statement by its public relations officer, Victor Agi. “The CBN must come clean on who controls the BDCs and clamp down on the banks that enable round-tripping.”

The statement said the lack of transparency around the BDC entities creates room for regulatory abuse, political patronage, and manipulation of the forex market.

It added that many BDCs, originally intended to facilitate access to retail foreign exchange, “have morphed into vehicles for round-tripping, arbitrage, and illicit financial flows.”

“The Center once again calls on the CBN to publicly disclose the beneficial owners of all licenced BDCs in Nigeria,” the group wrote.

Warning against “backdoor dealings” that only benefit a few at the expense of millions of Nigerians, the group maintained that lack of transparency and regulatory enforcement would leave Nigeria’s forex market vulnerable and lead to greater financial crisis.

It urged the CBN to strengthen its surveillance mechanisms to check the activities of some commercial banks that facilitate BDCs’ illegal activities, which undermine efforts towards price stability.

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It expressed worry that the “persistent weakness of the naira against the dollar has continued to fuel inflation and deepen economic hardship for ordinary Nigerians, raising questions about the transparency and effectiveness of key players in the foreign exchange market, particularly Bureau De Change (BDC) operators and deposit money banks”.

“The Center emphasises that until the issue of ownership transparency and regulatory enforcement is addressed, Nigeria’s forex market will remain vulnerable to exploitation, and efforts to stabilise the economy will remain largely cosmetic. In order to restore confidence in the naira, bold fiscal and institutional reforms that prioritize accountability and openness must go hand-in-hand,” the statement said.

Economic reforms Vs weak naira

Since the beginning of the President Bola Tinubu administration in 2023, the CBN has introduced policies, starting with the floating of the naira, aimed at reforming the foreign exchange system.

Initial turbulence shot the exchange rate to nearly N2000 to dollar.

In 2024, PREMIUM TIMES reported that many BDCs suspended operations amidst significant depreciation of the naira against the dollar. About the time, CBN directed all Deposit Money Banks to sell their excess dollar stock.

Similarly, the CBN mandated all BDC operators to meet higher capital requirements as part of sweeping regulatory reforms.

Moreover, the activities of illegal foreign exchange operators are believed to contribute to the depreciation of naira and a conduit for money laundering.

The office of the National Security Adviser (NSA) in February 2024 announced its partnership with the CBN, the Economic and Financial Crimes Commission (EFCC), the Nigerian Police Force (NPF), the Nigeria Customs Service and the Nigeria Financial Intelligence Unit (NFIU) to combat the activities of illegal foreign exchange operators.

The EFCC continues to clamp down illegal BDC operators in a bid to sanitise the foreign exchange market.

In spite of reform measures, the naira has continued to depreciate, hovering near ₦1,550 to $1—more than triple the official rate of ₦431 and nearly double the parallel market rate of less than ₦800 recorded in May 2023.

However, while the naira remains relatively weak, the reforms introduced by the Tinubu administration have ensured a unified exchange rate, and ensured its stability for a period of time. The reforms have also helped to clear $7 billion backlog in foreign exchange (FX) obligations.