The President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe has said that in order to boost the economy, more Foreign Direct Investment,(FDI) will be needed.
According to him, the positive side effects are inflation will slow further, new jobs will be created and there will be more inflow to the nation’s economy.
He said, although there has been a dwindling foreign reserve, the nation needs to encourage diaspora remittance.
In his words, “we understood there was a dwindling foreign reserve but then, we do not need to go through foreign reserves. Why not encourage diaspora remittance? “Diaspora remittance accessed by BDC operators has helped inflow. We have seen that impact on Investors & Exporters foreign exchange window as soon as it was opened.
“Let us be buying from almost the same rate they are selling from the black market. It is important for CBN to work with BDC operators.
“Nigeria’s foreign reserves have improved in two years. Can we conclude we have enough foreign exchange buffers?
“It is the size of our economy that matters. The current rate is in a comfort zone though we need more. Our infrastructure demand is about N38 trillion. How much is that to the foreign reserves?,” he said.
Speaking further, he said the Central Bank of Nigeria, (CBN) should merge the commercial bank and the BDCs rate together as he also a deeper line of products for the BDCs.
He said, “The CBN should merge the commercial bank and the BDCs rate together because they are selling to commercial banks at N358, and sell to BDC operators at N360 while we can buy from the parallel market at N358.
“But what we are saying is that they should merge the two rates. So, we are not asking for what is not practicable, because already there is window of N358 that goes to the bank.
“What we are asking is give us the same rate because we have the same market; we have the same buyer and selling the same product.
“What they are selling is personal travel allowance and business travel allowance which is the same thing we are selling. And they even have a dipper product lines than the BDCs operators because they do letter of credit, they do bills for collection among others.
“While the BDC operators are only limited to about four lines. In fact, what we are writing to the CBN to deepen our product lines, diversify our product lines.
He stated that illegal transactions have reduced drastically in the foreign exchange market as the margins in the rates have been closed.
“It is no more profitable because security agencies have arrested many people involved. There is no more gap in the foreign exchange market. Fraudsters were doing it because of the gap. The gap had influenced illegal exportation of dollar. Why were they supplying dollar to UAE and bring it back to Nigeria?
“It is because of the gap at the parallel market was wide then but now, we are having no margins. The parallel market rate is N358 while the CBN rate is N360. Illegal transactions have reduced drastically and it is one of the reasons that have stabilized the Naira,” he noted.
However, Gwadube stated that due to the electioneering, naira per dollar might hit N400.
“It might move N400 by 2018 because we are in election year. If government and CBN can maintain discipline, we may not have any shock in the market. We use to have scenarios in the past but security level has improved. Our food import bill is also improving. Once you have strong buffers, those that want to speculate might have no reason for doing so.
“Once the spike is curtailed, people may not be encouraged to do illegal activities that may hurt the Naira.
“This is 2018 and it’s a period we expect hot money in circulation. Once there is hot money in circulation, I can assure you that likelihood of hurting the Naira is high. The current rate of N363 is a question of time,” he added.