BY CHARLES ABUEDE
The Association of Bureau De Change Operators of Nigeria (ABCON) has intensified its lobby to get its members back on the mainstream of Nigeria’s foreign exchange demand and supply framework, offering a strong analytical pushback on how the Naira has yo-yoed in value without their active involvement in the official template.
ABCON’s national executive committee (NEC) at the weekend strongly solicited the support of Nigeria’s apex bank, the Central Bank of Nigeria (CBN) to ensure that BDCs continue to sell dollars to retail end forex buyers, in what it says, “as a way to bring lasting stability to the naira.”
Godwin Emefiele, governor of the CBN, had banned direct sales of dollars to the BDC and had asked that as private businessmen and businesswomen, they should source their foreign currencies and trade as it is done in other free markets of the world.
But the ABCON executive committee in a notice to its members updated them on its efforts to get the apex financial system regulator to soft-pedal on its forex sales ban to them.
In the notice, ABCON repeated its appeal to the regulator to revisit the stoppage of dollar sales to BDCs and disagreed with the claims that naira has remained largely stable and converging following the stoppage of dollar allocation to BDCs.
It said inclusion of BDCs in dollar supply mechanisms will help reduce the challenges faced by forex end users and support naira stability.
The CBN last July, through Governor Emefiele, had unceremoniously announced the decision to stop the sale of dollars to BDCs in an effort to curb the notorious menace of round-tripping, including the facilitation of illicit money flows, profiteering and bleeding of the country’s FX resources.
The surprising turn of event, however, appears not to have brought the much anticipated calm to the local currency across every segment of the market with the Naira weakening to an all-time low of N580 to a dollar in the parallel market.
Several analysts have also interpreted the move as a step towards unification of the country’s opaque multiple exchange rates systems, highlighting to all stakeholders the inescapable devaluation and a dollar scarcity regime that has now come to stay.
But ABCON insists that BDCs remain the most potent tool for the CBN to achieve its foreign exchange rate management. “Our position to CBN is that our members should be considered in whatever mechanism of dollar supply to the end users as it is done in other countries instead of a total blanket removal from the market. We therefore reject the statements claiming that the naira exchange rate has improved following stoppage of dollar sales to BDCs and urge our members to ignore those pronouncements.
“We the EXCOS are not sleeping on our responsibility to ensure that our members’ businesses are sustained. We, therefore, call on all our members to continue to ignore statements against the BDCs and continue to give us the necessary support in ensuring normalcy is restored to the market,” the statement said.
The executive body of the bureau de change operators said it will continue to take steps that ensure that the business of its members are restored and operators continue their legitimate operations as is done in other parts of the world while adding that ABCON management will continue in its collaboration, lobbying, media campaign and stakeholders’ engagements to ensure that BDC operators are given the right support and opportunity to thrive as is done in several other economies in the world.
Speaking on the exchange rate volatility, the body said “The naira exchanges at N416.25/$ at the official market. However, at the parallel market, where majority of forex is sourced by manufacturers and retail end users, the naira exchanges at N587/$, representing over N170 premium between both markets. It is on record that the stoppage of FX sales to BDCs did not only create higher demand pressure but also made the value of our national currency useless. It is also a reality that the majority of Foreign Exchange Retail End-Users cannot meet their demands from the preferred professional banks.”