The President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, announced this week that the BDC plans on cutting down its work force due to lack of access to dollars from the Central Bank of Nigerian (CBN), leading to loss of business.
ABCON is expected to sack 30,000 of its 200,000 work force this quarter.
The Central Bank of Nigeria (CBN) made it clear last month that it will be stopping the sale of forex to Bureaux De Change (BDC) in a move to curtail the depleting external reserves which is about $28billion dollars as of today.
According to the Nation,Mr. Gwadabe said virtual all staffs will be affected even chief executives.
“In the last one month, the CBN has been rationing dollar sales to BDCs, with less than half accessing the dollar windows. The Governor should have stated how much dollars the CBN actually sold to BDCs on an annual basis rather than estimating how much is been sold. For example, in 2014, according to the quarterly economic reports of the CBN, the CBN sold $4.4 billion to BDCs while it sold $43.65 billion to banks through the Retail Dutch Auction. This reveals that out of the $48.09 billion sold by the CBN, less than 10 per cent was sold to BDCs.”
Gwadabe said the decision of the CBN to stop dollar sales to BDCs has grave implications for the economy. “First is the spike in the parallel market exchange rate from N270 to over N290 per dollar within three days of its pronouncement. Over time this would lead to increased scarcity of dollars even for legitimate activities and further depreciation of the naira,” he said.
“Given the import dependency of the country and the inability of importers to access dollars in the official market, the increased exchange rate would aggravate the inflationary pressure in the economy, as prices of goods and services rise in response to the continued depreciation of the naira.”
The CBN had previously outlined more reason for the restriction of dollar sales to the BDCs, saying dubious BDC dealers are responsible.
The Nation originally reported this article.