EXTRA: ‘Deep Freezer Ltd, Rice and Beans Ltd’ — unusual names of CBN-approved BDC operators

Nigeria’s bureau de change (BDC) market has grown significantly since 2005. Within that period (2005 to 2006) there were less than 100 operational BDCs, with the Central Bank of Nigeria (CBN) selling dollars to the operators.

In 2009, Charles Soludo, the former governor of CBN, and the financial sector surveillance committee (FSSC) critically reviewed the operations of the BDC and said they were greatly disappointed with the operations of the market.

“As you would recall, the CBN decided in 2006 to sell cash directly to the BDCs as part of the liberalization programme to ensure adequate supply to the sector and hence the convergence of the BDC and inter-bank rates,” the former governor had said.

“As at the commencement of the sales to BDCs in 2006, there were less than 100 operational BDCs in Nigeria, and with weekly sales of less than $30 million, the BDC rates crashed and converged with the official rate.

“Currently, there are about 1, 147 operating BDCs (with a weekly sale of about $200 million to them by the CBN) and yet the BDC rates continue to diverge away from the official rate.”

From 2009 when Soludo made the comments to 2021, the number of operators had surged to around 5,500 — recording about $110 million in weekly sales.

Currently, the number of BDCs stands at 5,690, according to data from the CBN. A review of the total number shows that many have some unusual names.

In July 2021, Godwin Emefiele, the former governor of the CBN, said evidence had shown the ownership of several BDCs by the same promoters to procure multiple FX from the regulator.

According to Emefiele, such infractions had led to the gradual dollarisation of the Nigerian economy with attendant adverse consequences on the conduct of monetary policy.

Here are some of the unusual names of approved BDC operators in Nigeria:

• CCTV BDC LTD
• Chelsea BDC LTD
•  Couple BDC LTD
• Cream BDC LTD
• Cruising BDC LTD
• Day-by-day BDC LTD
• Deadlist BDC LTD
• Decorum BDC LTD
• Deep Freezer BDC LTD
• Divine Focus BDC LTD
• Ephesians-three-twenty BDC LTD
• Four to five BDC LTD
• Fourteen February BDC LTD
• Fullmoon BDC LTD
• Go-well BDC LTD
• Gucci BDC LTD
• Happy Ends LTD
• His Grace BDC LTD
• Home Alone BDC LTD
• Honeymoon BDC LTD
• Hourglass BDC LTD
• In-to-in BDC LTD
• JJC BDC LTD
• Looking and Seeing BDC LTD
• Lovers BDC LTD
• Pros and Cons BDC LTD
• Rice and Beans BDC LTD
• Select and Pay BDC LTD
• Set up BDC LTD
• SIX Six Six BDC LTD
• Slow Down BDC LTD
• You and Me BDC LTD
• Young Free & Single BDC LTD
• Zero to Ten BDC LTD
• 35. 10-20 Times BDC LTD

OVER HALF OF BDC OPERATORS ARE IN LAGOS

Analysis by TheCable Index shows that over half of all the BDC operators in Nigeria (52 percent) are located in Lagos, highlighting the state’s dominance in the foreign exchange (FX) market.

This is followed by the federal capital territory (FCT), Abuja, with 21 percent, and Kano state with 17 percent.

Here is the list of BDCs in Nigeria by state:

• Lagos: 2,958
• Abuja: 1,179
• Kano: 981
• Anambra: 259
• Kaduna: 55
• Abia: 50
• Oyo: 32
• Enugu: 25
• Rivers: 24
•  Delta: 21
• Sokoto: 18
• Imo: 15
• Edo: 14
• Borno: 11
• Bauchi: 7
• Kwara: 7
• Plateau: 6
• Ebonyi: 4
• Kebbi: 4
• Niger: 3
• Ogun: 3
• Katsina: 3
• Akwa Ibom: 2
• Cross River: 2
• Gombe: 2
• Kogi: 2
• Bayelsa: 1
• Benue: 1
• Nasarawa: 1

On September 14, 2023, Aminu Gwadabe, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON) said the number of licensed BDCs was too much for the CBN to monitor and supervise.

This, he said, had led to the request for approval for operators to consolidate their businesses.