The Central Bank of Nigeria (CBN) on Wednesday raised concerns over low level of compliance to regulatory rendition of returns by the Bureau De Change (BDC) operators that control the market with annual turnover of N1 trillion.
The operating guidelines of the BDCs require that each BDC submit returns of its activities to the CBN. The returns, apart from confirming the continued existence of each BDC also helps the apex bank in monitoring the activities of the BDC and ensure that it complies with the foreign exchange laws. The returns are also used for data collection purposes and policy formulation by the apex bank.
“In compliance with the provisions of BOFIA as amended, every BDC shall render returns to the CBN in prescribed format and within the deadline stipulated by the CBN,” the revised guidelines for the operation of BDCs stated.
Data from the CBN as presented by a representative of the Nigerian financial Intelligence Unit (NFIU) showed that 10 out of 2,288 BDCs that report on goAML platform are rendering reports to NFIU.
“That is zero percent. It is not even up to 1 percent that is rendering reports on the goAML platform,” the representative of the NFIU said at a zoom meeting organised by the Association of Bureau De Change Operators of Nigeria (ABCON).
The Nigerian financial Intelligence Unit (NFIU) is the Nigerian arm of the global financial Intelligence Unit (FIU). Domiciled within the Economic and Financial Crimes Commission (EFCC), as an autonomous unit, the setting up of the NFIU is part of the efforts of the Federal Government in combating money laundering, and financing of terrorist activities in Nigeria.
There are 5,300 BDCs licensed by the CBN. Out of this, only 2,288 are on goAML reporting portal. That implies that 57 have not registered for purpose of reporting. This is a very bad report for the sector.
“We expect all the licensed 5,300 BDCs to be on the two portals. As we have it now 28 percent are not on the new reporting portal,” NFIU Representative said.
Following the low rendition of returns by the BDCs, the international peacesetter would continue to rate Nigeria very low and BDC sector will continue to be termed as very vulnerable and high risk sector, which would have adverse effects on the country.
Ozoemena Nnaji, director, trade and exchange department, CBN, who was represented at the event said, “We need rendition of documents and not to witch-hunt anybody. If we do not have the statistics and the facts of what we are doing, how can we understand the liquidity gap, how can we understand what you want, how can we understand how much money we need to put in at a time?”
He was worried that there is still element of speculation in the market, which he could not understand. “We try all our efforts to see that our position continues to remain and that we solidly stand behind ABCON in the balancing of the demand and supply of FX which reflects into the foreign exchange rate,” he said.
“We will tell Nigerians who are speculating that at one point in time, a lot of people will lose money on speculative reasons. People that have this DNA of speculation and think they can make money out of it, it’s an advice to please stop speculation because it’s going to be a bad business going forward and so we should stick to what materially should add into our investment. We should look at better investment than foreign exchange speculation. It is an advice from the CBN because we are out for the common good of all Nigerians,” Nnaji said.
Aminu Gwadabe, president of ABCON, noted that the association has on its own, organized trainings for its members, and also partnered with Nigerian Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) to build capacity for operators.
“We have educated BDC operators on how they can help in tackling money laundering, terrorist financing and the benefits of keeping records of their transactions,” Gwadabe said.
He appealed to the CBN to approve the ABCON Training Institute to provide more avenues for continues training of his members on current trends in illicit financial flows and anti-terrorist financing.
Gwadabe announced that the licenced BDCS sub sector commands N1 trillion annual turnover in the economy.
The foreign currencies dealt in by a BDC is derived from private sources and such other sources which may include the CBN window as determined by the CBN from time to time for the purpose of funding Business Travel Allowance (BTA), Personal Travel Allowance (PTA), School Fees Payment Abroad, Medicals, mortgage and subscriptions.
The BDCs also access dollars from other Autonomous sources such as Diaspora Remittances, walk in customers and bank sources.
