President, the Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe has urged the Central Bank of Nigeria (CBN) to use Bureaux De Change (BDCs) as tool in ending multiple rate practices, and ushering in stability in the forex market.
The Central Bank of Nigeria (CBN) Operational Manual defines BDCs as small retail end institutions licensed to carry on the business of selling Personal Travel Allowance (PTA), Business Travel Allowance (BTA), school fees and medical bills payment abroad among other roles at the criteria retail end end of the foreign exchange market.
However, the various policies of the CBN on the operation of the sub-sector continues to be inhibitive and limiting BDCs’ from providing their constitutional roles in the forex market and economy.
Gwadabe has therefore called for collaboration between the BDCs and the CBN in the implementation of market-friendly policies that will make the BDCs impact more positively in the market and promoting exchange rate stability in the economy.
The ABCON boss said the the hasty generalisation that criminalises the BDC sub-sector as responsible for all market crisis and infractions like selling dollars with higher premium above regulatory limit, promoting loss of confidence in the near, and multiplicity of the exchange rates is not in the best interest of the market and economy.
He said, “It is in view of this disturbing situation and the need to strengthen BDCs value chain as obtainable in organised climes that we urge the regulators and policymakers to consider BDCs as the most potent tool in liberalising the foreign exchange market and stopping multiples exchange rates in the system.”
He explained that the BDCs have since 2006, provided policymakers with a window in achieving their mandate of exchange rate stability and price equilibrium. He therefore called for the reintegration of the BDCs into the forex market ecosystem to sustain their roles in the economy.
Gwadabe said the BDCs have for years remained effective and creative in contributing to the forex market.
For instance, the introduction of the Investors & Exports (I&E) FX window in 2017 was as a result of agitations from stakeholders like ABCON, foreign investors, Nigerians in Diaspora who advocated for it to allow more dollar inflows to the economy boost foreign reserves, and raise confidence in the naira by addressing widening rate premiums.
He said, “In order to address the challenges facing the forex market, now is the time to integrate BDCs into the market activities as agent of stabilisation and delivering the market to the Promised Land.”
On how ready the BDCs are for the responsibility, Gwadabe said the operators have for years been preparing for a time like this by integrating technology into their operations and promoting efficiency and transparency in their businesses. For instance, ABCON trains Compliance Officers to ensure they are acquainted with what is required of them, especially on monthly rendition of results and tracking illicit capital flows to the market through compliance initiatives.
According to him, the BDCs will continue to comply with the rendition of suspicious transactions reports as directed by NFIU, CBN, and EFCC through constant training their directors and sanctioning of erring operators.
“In compliance with the provisions of Bank and Other Financial Institutions (BOFIA) as amended, every BDC renders returns to the CBN in prescribed format and within the deadline stipulated by the CBN. The records of the BDCs are made readily available to the CBN examiners as and when requested including carrying out customer due diligence, corporate governance and tax returns,” he said.
He said that ABCON has over the years established itself as a key player in the BDC industry, made several commitments and sacrifices to ensure that the sector continues to thrive against all odds.