The Central Bank of Nigeria’s policy on the discontinuation of sales of forex to Bureau de Change Operators has consequently resulted in massive job losses in several thousands of both direct and indirect employment in the sector with a possible capitalisation fade out of N300 billion if the status quo continues.
This was disclosed by the President, Association of Bureau de Change Operators of Nigeria, ABCON, Alhaji Aminu Gwadabe, according to PUNCH.
Based on the last Monetary Policy meeting the CBN Governor made it clear that there would be no reversal in the apex bank’s policy. However, the lucrative business of the BDCs has been battling for survival.
Read: CBN threatens to suspend FX operating license of banks involved in forex malpractice
What ABCON President is saying?
The CBN’s ban on sales to BDCs has greatly affected the business of the forex operators, leading to the laying off of workers, as admitted by the ABCON president.
Gwadabe said, “The majority of the licensed BDCs are in dire zero of supply sources since the CBN policy on the discontinuation of sales of forex with the attendant consequences of job losses in several thousands of both direct and indirect employment with a capitalisation value of N300bn to fade away.
“This is indeed worrisome and the reason for the consistent advocacy of ABCON for CBN to include BDCs in remittances.”
Read: Forex: CBN seeks support of IATA to curb ‘ticket renting’ in Nigeria
The CBN was supplying $10,000 to each BDC twice a week before the forex supply cut.
The CBN declared its decision after expressing disappointment that the BDCs had defeated their purpose of existence to provide forex to retail users, but instead, had become wholesale and illegal dealers.
Speaking on why the CBN should consider the BDCs as diaspora remittance agents, Gwadabe said, “Considering the BDCs potent notable roles in exchange rate management stability in 2006, 2017, 2020 and liquidity vehicles in the market, I think the CBN should review and consider BDCs becoming payout agents of International Money Transfer Services Operators in the remittance space as contained in their guideline of 2014 for BDCs reforms.
“The BDCs have over 15 years been strong allies of the CBN and effective in ensuring forex liquidity and price stabilisation discoveries.
Read: More banks to join UBA in publishing names of forex defaulters
“Excluding the BDCs from the payment agents of remittance companies in the remittance space and the reallocation of their supply is like throwing the baby with the bathwater or excluding the man who owns water tanker that supply water in the street from owning a water business.”
He added, “The BDCs in Bangladesh, India, Lebanon, Kenya play active roles in payout agencies. Therefore, Nigeria should not be an exception.”
Gwadabe disclosed that ABCON had introduced innovations and platforms embraced by its members like SAAs master for rendering returns online real-time to CBN by the BDCs.
According to him, ABCON has also on-boarded BDCs on the Nigerian Interbank Settlement systems for BVN verifications.
He said that the BDCs were also on board of the Nigerian financial intelligent platform for rendering suspicious and cash transfers transactions.
In case you missed it
- In July 2021, the CBN governor banned the supply of forex to BDC operators in the country, as a result of various infringements by the operators against Nigeria’s monetary policies.
