THE Central Bank of Nigeria (CBN) has intensified efforts to battle currency speculators and has brought back Bureau De Change operators (BDCs), with a new guideline to checkmate their operators.
Nigeria is currently facing serious currency problems since floating its currency-Naira against the dollar, causing problems in the economy with a surge on inflation leading to a high cost of living.
Also, there are concerns of floating the Naira against the American dollar, which has led to the dollarisation of the economy and currency speculation. This development, findings have shown, has been creating a wide gap between the official exchange window and the parallel market.
But, the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, told The ICIR that Nigeria’s currency problems could be solved if the CBN factor in their colleagues to get involved in the currency business.
“The BDC operators must be involved in the retail business of currency exchange. They should get allocation from the International Oil Companies and others who do dollar business in the country, to solve liquidity problems,” he said.
Recall, the BDCs were, before now, officially halted from foreign exchange business, by former Governor of the CBN, Godwin Emefiele, who cited concerns of ‘terrorism funding’, but the Acting Governor of the apex bank Folasodun Shonubi has brought their activities back with a stiff procedural guideline.
The announcement, made on August 17, 2023, outlines key measures to streamline and improve the BDC operations.
Under the new framework, the spread on buying and selling by BDC operators is set to fall within a permissible range of -2.5 per cent to +2.5 per cent of the Nigerian Foreign Exchange market window’s weighted average rate from the previous day.
This move is expected to provide more stability and transparency to exchange rate fluctuations, ultimately benefiting both BDC operators and the general public.
Another significant alteration is BDC operators’ mandatory submission of periodic financial reports.
These reports, including daily, weekly, monthly, quarterly, and yearly renditions, are to be submitted through the upgraded Financial Institution Forex Rendition System (FIFX), tailored to each operator’s specific requirements. This change aims to enhance oversight and ensure that the BDC sector operates with greater accountability.
The circular further emphasizes that failure to submit accurate returns within the specified timeframe will result in sanctions, potentially leading to the withdrawal of operating licenses.
Even in cases where BDC operators have had no transactions during a given period, they are required to submit nil returns, thereby fostering a culture of compliance and thorough record-keeping.
By implementing these measures, the Central Bank of Nigeria anticipates a more robust and well-regulated BDC segment that aligns with broader efforts to enhance Nigeria’s foreign exchange market efficiency.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.