The Central Bank of Nigeria (CBN) is set to implement stringent measures concerning the purchase of foreign currencies through Bureau De Change (BDC) operators, particularly focusing on transactions related to overseas education and medical expenses.
Under the proposed revised regulatory guidelines for BDCs in Nigeria, the CBN plans to enforce a cap on foreign currency purchases for school fees at $10,000 per customer annually.
According to the new guidelines, such transactions must be facilitated through the BDC’s domiciliary account with a Nigerian bank, ensuring direct payment to the educational institution. The regulations aim to streamline and monitor the flow of foreign exchange for educational purposes.
The proposed guidelines stipulate that BDCs may only sell foreign currency up to the equivalent of $10,000 to a customer for school fees once a year. The funds must be transferred from the BDC’s domiciliary account with a Nigerian bank directly to the school.
To comply with these regulations, customers must provide a set of documents, including a duly filled e-Form A, proof of admission or course registration, the educational institution’s bill or invoice, and for postgraduate studies, a copy of the undergraduate degree certificate or an officially verified statement of results.
Additionally, the CBN plans to impose a limit of $5,000 per annum for foreign currency transactions related to medical bills abroad through BDCs. Similar to educational fee transactions, funds for medical bills will be transferred directly from the BDC’s domiciliary account to the medical facility, accompanied by comprehensive documentation.
These initiatives are part of the CBN’s broader strategy to address challenges in the foreign exchange market attributed to significant outflows for foreign education and medical tourism. CBN Governor Yemi Cardoso highlighted that approximately $40 billion has been directed into these sectors, contributing to the depreciation of the Naira beyond N1,600 in the official market.
In addition to the proposed measures concerning BDCs, the CBN recently revised operations for International Money Transfer Operators (IMTOs), restricting their services to inbound transfers with mandatory Naira payouts. The central bank also directed that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) no longer be issued in cash but through electronic means. Moreover, the revised guidelines propose limiting cash transactions for buying and selling foreign currencies through BDC operators to a maximum of $500, with any amount above this threshold requiring digital settlement.
These measures collectively aim to conserve foreign exchange reserves and stabilize the value of the Naira amidst growing pressures in the foreign exchange market.
