De-risk BDCs operations to access FX from autonomous window, ABCON tells CBN
The Association of Bureaux De Change Operators of Nigeria (ABCON), an umbrella body for over 53,000 Central Bank of Nigeria (CBN)-licenced Bureaux De Change (BDCs) has advised the apex bank to de-risk BDCs operations to allow operators access foreign exchange (forex) from autonomous market in 2022 and beyond.
Aminu Gwadabe, President, said in a statement that the BDC sector is becoming comatose since July 2021 Monetary Policy Committee (MPC) meeting where the CBN suspended weekly dollar interventions to BDCs.
He said that while BDCs are licensed to offer retail forex sales, across the counter forex transactions, they equally contribute to Nigeria’s economic development.
The BDCs, he added are ensuring order and confidence in the forex market, providing data for monetary policy, channels for CBN Intervention in Retail forex market and creation of over 15,000 jobs, among others.
According to Gwadabe, over N1 trillion annual transaction volume by the BDCs sector is under threat while huge capital investment in the sector is becoming redundant, gradually being eroded and winding up.
He therefore advised that just like the apex bank de-risked the agricultural sector, making it easier for agriculturalists to access cheaper loans at single digit from banks, the CBN can also de-risk the BDCs operations to be able to receive diaspora remittances through the International Money Supply Operators (IMTOs) and deepen foreign capital flows to the economy.
Gwadabe said the ABCON understands the challenges faced by the apex bank due to the dwindling foreign reserves , declining oil output and oil theft, Covid-19 induced economic pains, fiscal policy challenges, debt burden and election spending, which are making it difficult for the CBN to sustain weekly dollar interventions to BDCs.
He suggested that the BDCs should be allowed to access dollars or diaspora remittances through the autonomous forex windows like allowing operators to receive IMTOs proceeds, carrying out online dollar operations and Point of Sale (PoS) Agency, among others.
He said that ABCON has developed multiple applications for BDCs’ transformation from being CBN cash dispensers to globally competitive entities with capacity to attract foreign capital flows to the economy.
“We support any measures that would lead to compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), supporting CBN’s exchange rate stability policies and security agencies to punish any BDC operator breaching corporate governance and compliance guidelines. It is our sincere believed that the BDCs need to be integrated back officially to ensure their continuous potent role in exchange rate stability management,” Gwadabe said.
He disclosed that ABCON is now training compliance officers to ensure they are acquainted with what is required of them, especially on monthly rendition of results and tracking illicit capital flows.
Gwadabe said that ABCON has over the years established itself as a key player in the BDC industry, and has also made several commitments and sacrifices to ensure that the sector continues to thrive despite all odds.
“The recognition of the role of BDCs in Nigeria financial sector remains the first step to building a sustainable and viable forex market that is comparable to what is obtainable in other developed economies. But getting the Nigerian BDC sector to where it is desired to be demands hard-work, quality leadership, regulatory foresight and sound government policies,” he said.