BDCs are at centre of CBN’s exchange rate policies -ABCON

By Mashe Umaru Gwamna

The Association of Bureaux De Change of Nigeria (ABCON) has said  Bureaux De Change (BDCs) are at the centre of Central Bank of Nigeria (CBN’s) exchange rate policies.

President of ABCON  Aminu Gwadabe, made disclosure at a press briefing in Lagos.

He explained  that,the small retail exchange institutions – BDCs- remain at the centre of CBN’s exchange rate policies implementation.

He said there is a  need for regulator and the public to continuously support BDCs’ roles in exchange rate stability.

He said this,  can be achieved through increased automation of their processes and providing more channels of transactions for sustainable price equilibrium while eradicating rent seeking, currency substitution and speculation.

“I am very confident that Nigeria will in not distant future appreciate a stable exchange rate and availability of forex in the local economy as the right people for government policies’ implementation get such responsibility,” he stated.

According to him,  the CBN Governor, Godwin Emefiele had tried to introduce many policies beyond conventional money supply that are not in line with market realities.

Gwadabe cited the Naira-4-Dollar scheme of N5 bonus for every $1 diaspora remittances as well as the N65 rebate for every dollar of non-oil export proceeds and other incentives as commendable, but require total overhaul with stakeholders’ engagement.

Gwadabe noted that,the   apex bank has maintained the suspension of forex sales to the BDCs does not lead to revocation of licenses as the operators are still under the purview of CBN regulations.

While responding to a question on where the BDCs are sourcing forex, he said though some BDCs are lucky to be operating at the international airport and other off-table transactions, majority of them are out of business due to lack or total absence of alternative sources.

“A licensed BDC in Nigeria cannot access oil proceeds, non-oil proceeds, and diaspora remittances. We need expansionary regulatory approvals on the scope of transactions and margin reviews,” Gwadabe said. According to him, an average BDC operator licensed by CBN is comatose and heading for extinction.

To strengthen the naira, Gwadabe believes it is time to allow competition and mutually-beneficial engagements among stakeholders and regulators.

He said, “Naira is the most difficult currency to predict in the world because of its vulnerability to leadership corruption, lack of competitive space, and the prevalence of ungoverned players.”

Meanwhile, He urged the apex bank to leverage the capacity and skills of the BDCs operators and also reach out to them to enhance liquidity, and price discovery of the diaspora remittances.

“This agitation of stakeholders we will continue to advocate,” he said. “We urge the CBN to embrace our road map and create stakeholders engagement,” he said.

Gwadabe added that the diversion of the allocations of BDCs to the banks to enhance liquidity in the retail end of the market and price stability, was still a misnomer if the banks had performed the roles of CBN’s transmission mechanisms.