CBN’s BDC Recapitalisation Policy a Threat to Northern Economy, AEF Warns

The Arewa Economic Forum (AEF) has raised strong objections to the Central Bank of Nigeria’s (CBN) new Bureau De Change (BDC) recapitalisation policy, warning that it poses a serious threat to economic inclusion in Northern Nigeria and could destabilise national security. Addressing journalists in Abuja, AEF Chairman Ibrahim Shehu-Dandakata described the policy as regionally lopsided and financially exclusionary, with far-reaching consequences for thousands of legitimate Northern BDC operators and their communities.

Under the new CBN guidelines introduced in May 2024, Tier 1 BDCs must now hold a minimum capital of ₦2 billion and are permitted to operate nationally with multiple branches and franchise opportunities. Tier 2 operators require ₦500 million and are restricted to a single state with no more than five branches, without the ability to franchise. This represents an increase of over 1,300% to 5,600% from the previous ₦35 million requirement.

While acknowledging the CBN’s objectives of strengthening financial integrity, aligning with international standards, and curbing market abuse, Dandakata argued that the policy’s implementation risks excluding the very actors who have sustained the industry for decades. He noted that the vast majority of BDCs that have complied with the new requirements are based in the South, especially Lagos, and are dominated by a single ethnic group. In contrast, fewer than 10% of compliant BDCs are Northern-owned, despite the North’s historical involvement in the sub-sector across major commercial hubs such as Wapa in Kano, Zone 4 in Abuja, and markets in Sokoto, Minna, Benin, and Port Harcourt.

Dandakata also highlighted that countries such as South Africa, Kenya, Ghana, Egypt, India, and the UAE maintain far more inclusive capital thresholds for BDCs, allowing broader participation without undermining regulation. He warned that Nigeria’s new policy could effectively eliminate Northern participation in the BDC space, a sector that has been vital for job creation, forex accessibility, and informal banking services in the region.

The AEF cautioned that removing thousands of BDC operators from the economy would worsen insecurity in Northern Nigeria, where communities already face terrorism, banditry, and rampant youth unemployment. Dandakata appealed directly to President Bola Ahmed Tinubu to urgently reassess the implications of the policy, emphasising that this is not merely an economic issue but one of national stability.

He called on the National Security Adviser, Malam Nuhu Ribadu, to intervene and assess the broader socio-economic consequences. He also urged Finance Minister Wale Edun and CBN Governor Yemi Cardoso to reconsider the regional impact and public perception of the policy, particularly in light of the concentration of key financial leadership positions among Southerners, mostly of Yoruba origin.

“This is not a call for division,” Dandakata said, “but a plea for fairness, equity, and inclusive governance.” He reiterated earlier AEF concerns over what it described as a growing “Yorubanisation” and “Lagos-centric” dominance of Nigeria’s economic policy-making landscape, and stressed the need for regional balance in federal appointments to preserve national cohesion.

To address these concerns, the AEF proposed a minimum six-month extension of the policy’s implementation timeline, or ideally a continuous window for compliance, to allow Northern operators time to mobilise capital and participate meaningfully. It also recommended the creation of at least three Northern-led Tier 1 BDC consortia to pool resources and support grassroots operators, alongside a more flexible and inclusive regulatory model.

Dandakata urged Aminu Gwadabe, President of the Association of Bureau de Change Operators of Nigeria (ABUCON), to represent all stakeholders in policy dialogues—not just elite players—and ensure transparency and equity in engagement with authorities. He concluded with a call to Northern investors, business leaders, and community stakeholders to rally behind the BDC sector, which he described as a lifeline for financial access and employment in underserved regions.

“We must not allow this legacy to be erased in one policy stroke,” he said.