Forex Ban : BDC operators tell CBN to reconsider its position
Forex Ban : BDC operators tell CBN to reconsider its position
The Association of Bureaux De Change Operators of Nigeria (ABCON), has appealed to Central Bank of Nigeria (CBN) to reconsider the ban to allow BDC operators receive diaspora remittances in 2022.
Recall that in July 2021, the CBN banned the sale of foreign exchange (forex) to Bureaux De Change (BDC) operators. It also stopped the issuance of new licenses to BDCs.
Godwin Emefiele, CBN governor, accused BDC operators of turning away from their objectives — to process FX demands of $5,000 or less — to becoming a conduit for illegal financial flows working with corrupt people to conduct money laundering in Nigeria.Since then, the apex bank had been channelling FX to commercial banks to meet customers’ legitimate demands.
ABCON President, Alhaji Aminu Gwadabe, who made the appeal in a statement said the BDC industry’s yearly transaction volume of over N1 trillion is in jeopardy, while enormous capital investment in the sector is becoming obsolete, eroding, and winding down.
He suggested that, just as the CBN de-risked the agricultural sector, making it easier for farmers to get single-digit loans from banks, the CBN could also de-risk the BDCs operations, allowing them to receive diaspora remittances through International Money Supply Operators (IMTOs) and deepen foreign capital flows to the economy.
The ABCON, according to Gwadabe, recognizes the CBN’s difficulties in maintaining weekly dollar interventions to BDCs due to falling foreign reserves, declining oil output, and oil theft, Covid-19-induced economic hardships, fiscal policy concerns, debt burden, and election spending.
“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 belief that the BDCs need to be integrated back officially to ensure their continuous potent role in exchange rate stability management,” Gwadabe said.
He stated that ABCON is now training Compliance Officers to ensure that they are aware of what is expected of them, particularly in terms of monthly rendition of results and tracking illicit financial flows.
ABCON, according to Gwadabe, has established itself as a vital participant in the BDC business throughout the years and has made various promises and sacrifices to ensure that the sector thrives despite all difficulties.
“The recognition of the role of BDCs in Nigeria’s 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.
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.
The CBN Governor, Godwin Emefiele, also announced a halt on the licensing of new Bureau De Change (BDC) operators and further processing of BDC applications for forex across the country.
