The Association of Bureau De Change Operators of Nigeria (ABCON) has attributed the instability of the Naira across markets and the difference between official and parallel market rates to the foreign exchange policies of the Central Bank of Nigeria (CBN).
ABCON president, Aminu Gwadabe, in a statement, said with the official market rate now at N430/$ and parallel market rate now at N730/$, a huge rate gap of N300/$ now exists in the markets.
He said selling forex earnings at a fixed rate of N430/$, while open market rate is N730/$ is an “unorthodox practice that lacks credibility and transparency”.
“That singular act encourages rent-seeking, currency substitution that continues to hurt real sector operators and the overall economy.”
Gwadabe recalled that when the apex bank decided to suspend forex sale to Bureau De Change (BDCs) in July 2021, the open market rate was about N501/$ and over a year later, the naira to the dollar had depreciated significantly, with a lot of Nigerians not meeting their invisible transaction needs and the regulator not showing much commitment to meeting those needs.
The ABCON president said the small retail exchange institutions — BDCs — remain at the centre of CBN’s exchange rate policies implementation, hence the need for the regulator and public to continuously support BDCs’ roles in exchange rate stability.
This, he added, can be achieved through increased automation of their processes and providing more channels of transactions for sustainable price equilibrium while eradicating rent-seeking, currency substitution and speculation.
Gwadabe said the CBN governor, Godwin Emefiele, had tried to introduce many policies beyond conventional money supply that were not in line with market realities.
Making specific reference to the ‘naira-4-dollar’ scheme of N5 bonus for every $1 diaspora remittance as well as the N65 rebate for every dollar of non-oil export proceeds and other incentives, he said though commendable, such policies required total overhaul with stakeholders’ engagement.
Speaking on sources of forex for BDCs since the CBN ban, he said though some operators are lucky to be operating at the international airport and other off-table transactions, the majority of them were out of business due to lack or total absence of alternative sources.
Gwadabe said an average BDC operator licensed by CBN is comatose and heading for extinction.
