The Association of Bureaux de Change Operators of Nigeria (ABCON) has called on the monetary authority to de-risk their operations in order to receive diaspora remittances through the autonomous forex windows.
The Nigerian autonomous foreign exchange (NAFEX) is a market trading segment for investors, exporters and end-users that allows FX trades to be made at a market-determined rate.
Recall that the Central Bank of Nigeria (CBN) in May 2021 adopted NAFEX as the country’s offical forex window.
Aminu Gwadabe, president of ABCON, said this in a statement on Sunday.
Gwadabe said the BDC sector has been in comatose since the July 2021 monetary policy committee (MPC) meeting where the Central Bank of Nigeria (CBN) suspended weekly dollar interventions to BDCs.
He said that while BDCs were licensed to offer retail across the counter foreign exchange (forex) transactions, they equally contribute to Nigeria’s economic development.
The BDCs, he added, are ensuring order and confidence in the forex market, providing data for monetary policy, channels for CBN intervention in the retail market and creation of over 15,000 jobs, among others.
Gwadabe said over N1 trillion annual transaction volume by the BDCs subsector was under threat while huge capital investment was becoming redundant, gradually being eroded and winding up.
He advised that just like the apex bank de-risked the agricultural sector by making it easier for agriculturalists to access cheaper loans at single-digit from banks, the CBN could also de-risk the BDCs’ operations.
“ABCON understands the challenges faced by the apex bank due to the dwindling foreign reserves, declining oil output and oil theft, COVID-19-induced economic pains, fiscal policy challenges, debt burden and election spending, which are making it difficult for the CBN to sustain weekly dollar interventions to BDCs,” he said.
He suggested that the BDCs should be allowed to access dollars or diaspora remittances through the autonomous forex windows, such as allowing operators to receive IMTOs’ proceeds, carrying out online dollar operations and point of sale (POS) agency, among others.
“We support any measures that would lead to compliance with Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), supporting CBN’s exchange rate stability policies and security agencies to punish any BDC operator breaching corporate governance and compliance guidelines,” Gwadabe said.
“It is our sincere belief that the BDCs need to be integrated back officially to ensure their continuous potent role in exchange rate stability management.”
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