Naira Plunge Sparks Concerns: CFTIW Urges CBN to Unveil BDC Owners

• Center for Fiscal Transparency and Integrity Watch (CFTIW) urges increased scrutiny on Bureau De Change (BDC) operations for transparency
• CFTIW calls for the publication of beneficial owners of licensed BDCs to combat opacity and address potential market exploitation

In response to the alarming depreciation of the naira and its detrimental impact on the nation, the Center for Fiscal Transparency and Integrity Watch (CFTIW) sounded the warning alarm on Saturday.

The Central Bank of Nigeria (CBN) recently issued regulations to address the forex crisis, including a circular on the “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.”

Victor Agi, Head of Public Relations, conveyed the CFTIW’s call for increased scrutiny on Bureau De Change (BDC) operations. Specifically, they urged the publication of beneficial owners for all licensed BDCs to combat the opacity surrounding their activities.

The anti-corruption body stressed the need for transparency, pointing out the lack of sufficient data on BDC operations, making it challenging to understand their impact on the foreign exchange market. Concerns about potential exploitation and manipulation within the sector persist, contributing to the naira’s weakening in the free market.

The statement emphasized the discrepancies between BDC buying and selling rates, raising questions about fair pricing practices and the potential for exploitative arbitrage. The lack of clarity regarding BDC operators’ compliance with Anti-Money Laundering (AML) regulations, as outlined in the Money Laundering (Prohibition) Act 2022, adds to the concerns.

“We demand the public reporting of all licensed BDC transactions, including volumes, buying, and selling rates,” stated the CFTIW. They believe this will enhance market transparency and address arbitrage trading issues.

Furthermore, the CFTIW called on the CBN to bolster the enforcement of AML regulations through comprehensive audits and inspections of BDC operators. The goal is to ensure adherence to Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures, with swift and severe penalties for non-compliance.

The statement concluded with optimism that these measures would restore trust in the market, strengthen the naira, attract foreign investment, and potentially unveil that the forex crisis may not be solely driven by genuine needs but by financial motives.