Nigeria’s foreign exchange market keeps a stunning secret. As much as 90 percent of all dollar transactions are carried on entirely off the books, or so allege Bureau de Change (BDC) operators.Â
That is roughly equivalent to most forex liquidity remaining unmonitored—the equivalent of billions of dollars traded without ever passing through official banking systems.
This turnover underground is not an undercover operation—it’s a lost opportunity. BDC operators are requesting a strategic alliance between their licensed networks and the Central Bank of Nigeria (CBN) to bring this off-radar liquidity into the system officially.
Why BDCs Matter Now
Since the CBN’s June 2023 foreclosure of forex market windows, policymakers have expected higher stability and transparency. Without leveraging BDCs—which operate the retail foreign exchange on a day-to-day basis—the full benefit of such reforms is constrained. Still, BDCs are more than happy to impart their street-level experience and know-how to enhance overall efficiency and liquidity.
Aminu Gwadebe, the President of the Association of Bureau de Change Operators of Nigeria (ABCON), describes dormant liquidity as waiting patiently to be unleashed by concerted effort. He likens this forex phenomenon to the parallel cash outside banks—money circulating unnoticed but having real effects.
Diaspora Inflows: A Dollar Goldmine
For the majority of this migrant flow, the money in the palm of their hands goes untapped by the banks. Remittances from abroad by workers constitute the pillar of foreign exchange and infrastructure financing in India, the UAE, and Pakistan. A whopping $30 billion or more flows through remittances in India alone. Nigeria trails behind the race.
Remittances processed by International Money Transfer Operators (IMTOs) at times never pass through banks. Banks themselves admit they never actually lay eyes on the money. BDCs are seeking a regulatory moment of clarity so that these flows can be directed correctly into the formal system.
Dollars Can’t Meet Demand
BDC operators gripe that the official chain they operate under is under strain. Abuja operator Adamu Ardo laments that if he has ten clients requesting dollars, he can serve only three or four of them. The rest wait or go to the black market, where unofficial exchange rates disrupt the system.
Notwithstanding this, at times, the CBN makes limited funds available to stabilize the market, but the liquidity shortfall remains substantial. BDCs are compelled to use private sources of dollars and to regularly inform clients that rates and availability can shift at any given moment.
Converting Hidden Assets into Public Gain
Gwadebe recommends creative ways to channel diaspora dollars and dollar reserves into the formal economy. Some of them include the government’s ability to dispose of “toxic” or unused government assets, such as federal offices in Abuja and Lagos, to foreigners. That will create dollar inflows and mobilize foreign capital into the local economy. He further observes that public institutions, such as immigration centers, already receive dollars, contrary to the argument that government offices cannot conduct business in foreign exchange.
Reform as a Way to Stability
BDC operators are not merely advocating inclusion. They are fighting for law-backed and regulated space in the FX universe. They would like to be part of the legislative process that would make them more equal partners in providing liquidity and competitiveness within the FX universe.
Oil-fueled global recessions within Europe, the US, and China have spurred FX volatility. Nigeria’s troubled naira, under a cloud of costly recapitalization and compliance, requires a leaner, faster solution. BDCs contend that where formal channels and banks have failed, duly regulated, licensed BDCs can step into the gap.
A Path Forward
Nigeria’s dollar crisis is not so much a question of printing more money; it’s a question of looking where money flows. The missing 90 percent of FX liquidity is both the issue and the solution. With intelligent regulation and honest cooperation between the CBN and BDCs, Nigeria can leverage this wealth, strengthen the naira, and enhance stability, not just for banks but also for ordinary people and small enterprises that rely on foreign exchange to make ends meet.
In showcasing these dollars, Nigeria can now close the gap between latent potential and proven economic power.
