International finance expert and chief executive officer, FB Services Group, Canada, Akin Oladeji-JohnBrown has decried what he described as colossal damage to Nigeria’s economy by Bureau De Change (BDC).
Reacting to the Central Bank of Nigeria (CBN)’s decision to stop the weekly sale of forex to the BDCs, the financial expert described the BDC market as an artificial one that is driven by sentiments and imaginary price mechanisms.
“This is a welcome policy decision except it is coming almost too late. The indirect damage of ubiquitous BDCs and forex allocation policy in the last 10 years to SMEs and industrial sector are unquantifiable,” Oladeji-JohnBrown said.
He added that there was no other jurisdiction where government is funding forex retailers as was done in Nigeria.
The expert applauded the CBN for taking the bold decision, hoping that political consideration would not make government to reverse the situation.
It would be recalled that in the new policy CBN will now be allocating forex exclusively to Money Deposit Banks (MDB).
The CEO urged the CBN to constantly monitor the MDBs.
According to him, “There are compliance requirements that money deposit banks are expected to meet. The CBN has what it takes to enhance compliance and enforcement, except there is complicity by regulatory officials”.
On the continuous slide in the value of the naira, Oladeji-JohnBrown advised the Federal Government to direct its efforts at improving infrastructure for efficient production of goods for export adding that such policy thrust would have a positive effect on the value of naira on the long run.
He blamed the decrease in the value of naira for the high inflation the nation is experiencing contending that it is normal for an import dependent nation.
On Nigeria’s debt burden, the financial expert advised the government to put a stop to debt issues contending that many factors that could affect the value of naira as well as cause inflation.
“It may also not be out of place to put embargo on remittances by multinationals and foreign investors,” he further said.