NIGERIA is losing investments from investors and diaspora remittances as a result of the huge disparity between the official Import and Export Window (I & E) and the parallel market, the head of bureau de change operators has said.
The BDC chief, Aminu Gwadabe, accused currency speculators of taking advantage of uncertainties in the market, an action they described as a threat to the Nigerian economy.
The Naira fell yesterday N710 to the US dollar at the parallel market, although the rate at the official I&E window remained N430 by yesterday, which prompted concerns of speculation in the market.
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Gwadabe, who is the president of the Association of Bureau De Change Operators of Nigeria (ABCON), told TheICIR today that the wide gap was causing depletion of their business capital, and hurting investments and remittances.
Gwadabe said, “Premium induces rent seeking. Premium also creates disequilibrium. Premium enhances corruption. These are some of the wider implications to the economy.
“Right now, what we are seeing is speculation as a result of premium. People are even speculating the buffers of the country.
“This premium is discouraging exporters. It is discouraging inflow of diaspora remittances, and has discouraged about 81 per cent of investors that have left the country.”
He stressed that the large import dependence nature of the Nigerian economy remained a major source of worry regarding the current currency situation.
Suggesting solutions, he said, “There’s need to think home- grown and unconventional approaches to solve this problem.
“We are also advocating for a window that would liberalise the market. We are looking at a ‘Bureau de Change Autonomous Window.’
“There are lots of these remittances not captured because of the exchange rate disparity. The window can help remittances inflow.”
The exchange rate situation is already taking its toll on businesses and investments, while worsening Nigeria’s fragile economy, which has been pummeled by inflationary pressures, oil theft and massive borrowings.
The continuous crash of the naira, Gwadabe said, was already crowding out small scale businesses.
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.