Bureaux de Change (BDCs) operators have rejected the order by the Central Bank of Nigeria (CBN) directing BDCs operators to make at least three dollar purchases weekly or be sanctioned.
The CBN directive on forex
The CBN had earlier issued a statement directing all commercial banks to sell foreign exchange across the counter.
“All BDCs shall henceforth access forex from the CBN on Mondays, Wednesdays, and Fridays. It is compulsory that all BDCs access forex at least three times weekly. Any BDC that fails to access the forex window at least three times weekly shall have its license reviewed by the CBN”.
The CBN had also threatened to punish banks that fail to instantly sell foreign exchange (forex) to eligible travelers and boost dollar liquidity in the market.
The reaction by Bureaux De Change Operators
In a swift reaction to the directive, Aminu Gwadabe, President, Association of Bureaux De Change Operators of Nigeria (ABCON) rejected the order and advised the CBN to review BDC’s dollar purchasing rate to align with commercial banks’ buying rate.
In his words:
“The rate between the banks and BDCs should be merged for uniformity and fairness. A situation where the banks buy dollar from the CBN at a lower rate than the BDCs is noT helping the market stability drive. Besides, ABCON should be considered for disbursement fees in the collection centers to ameliorate the new assignments”.
Gwadabe further added that the BDC sector is confronted with many challenges such as multiple exchange rate, abnormal bank charges, Value Added Tax (VAT) and Commission on Turnover (COT), parallel market operators and illegal International Money Transfer Operators (IMTOs), urging the government to come to their aid
The rationale behind CBN’s directive
The move by the CBN is to ensure that eligible travelers in the country are able to access foreign exchange for the Business Travel Allowances (BTA), Personal Travel Allowances (PTA), school fees payment and medical bills payment.
Difficulty in accessing foreign exchange through the banks could lead to increased patronage of the black market and widening of the rates between both sectors. The new directive is also in line with the CBN’s plan to deepen foreign exchange liquidity available in the market.
