Why Nigeria's BDCs seek autonomy to go digital

In a bid to revolutionize the foreign exchange market in Nigeria, the President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, is advocating for autonomy for BDC operators to go digital. Gwadabe believes that granting autonomy to BDC operators by the Central Bank of Nigeria will not only promote a cashless FX market but also enable operators to embrace technology and drive innovation. This move is set to bring significant changes to how FX is traded in Nigeria and could potentially transform the FX trading landscape in the country. Gwadabe outlined a three-point agenda aimed at aligning with the reforms set forth by the Central Bank. Firstly, he emphasized the need for consolidation within the BDC sector. With approximately 6,000 BDC operators in Nigeria, Gwadabe proposed the formation of corporate entities to enhance corporate governance and streamline operations. This consolidation would enable BDC operators to create a more cohesive and efficient market structure. Secondly, Gwadabe stressed the importance of automation and digitalization in the BDC space. He highlighted the shift towards contactless transactions, accelerated by the COVID-19 pandemic, and called for BDC operators to be allowed on the payment space. By embracing technology and automation, BDC operators can enhance operational efficiency and provide a seamless trading experience for their clients. The third pillar of Gwadabe's agenda focuses on operational mechanisms. He proposed establishing strategic partnerships with stakeholders such as travelers to serve as gateways for BDC operators. By leveraging these gateways, BDC operators can tap into liquidity sources and expand their reach in the market. Gwadabe cited successful models from other countries where BDCs play a pivotal role in driving economic activities and facilitating remittances. As BDC operators gear up for digital transformation, concerns around cybersecurity and fraud prevention have come to the forefront. Gwadabe assured that the Association has been investing in technology and partnering with industry experts to address these challenges. Initiatives such as NigerBDCs.com, a real-time exchange rate website, and SaaS master for office automation underscore the commitment of BDC operators to enhance transparency and compliance. In engaging with the Central Bank and other stakeholders, Gwadabe expressed reservations about exclusive partnerships in the digital space. He highlighted the need for a level playing field to ensure that all BDC operators can participate in the digital revolution. The recent collaboration between Flutterwave and Wemba Bank on a central bank-backed platform raised concerns about exclusivity and regulatory compliance. Gwadabe called for a democratic and inclusive approach to digitalization to maximize the value that BDC operators can bring to the market. Looking ahead, Gwadabe emphasized the importance of vigilance in navigating the evolving foreign exchange landscape. With international partners closely monitoring Nigeria's FX market, stakeholders must collaborate to uphold regulatory standards and promote transparency. As BDC operators strive for autonomy and digital transformation, the industry stands at a pivotal juncture poised for innovation and growth.