The Association of Bureaux De Change Operators of Nigeria (ABCON) has unveiled a roadmap to designed to forestall sustained exchange rate instability of the Naira with a view to ensuring the currency’s exchange rate stability and by implication, enhance its value-addition to the economy.
The association made this disclosure on Thursday in a statement issued at the end of its National Executive Council meeting held in Lagos.
The statement signed by the ABCON’s President, Alhaji Aminu Gwadabe, contained the association’s strategies to stabilize the local currency and curb volatility in the forex market.
Gwadabe, who canvassed an urgent need to enhance dollar liquidity in the market and ensure stability of prices in the economy, further stated that doing this will save the local currency and economy from the impact of election spending that has kept inflation at double digits for a very long time.
He expatiated: “The naira has consistently come under serious pressures due to dollar scarcity making it difficult for forex end users, manufacturers and key industry players to access dollar needed to meet their needs.
“Under my leadership, ABCON will continue to encourage our members to play the vital role of closing the exchange rate gaps in the market and reducing widening premium between the parallel market and the official window”, the ABCON boss added
Gwadabe, in the statement, also stressed need for the creation of BDCs’ Autonomous Foreign Exchange Trading Window (BAFEX) with determined maximum daily limit for credible BDCs to access dollars from banks, autonomous market and Diaspora forex window at the prevailing market prices.
To achieve this, he appealed to the authorities with oversight function on BDCs for the enhancement of existing BDCs’ automation portals to file transaction returns on CBN/ABCON/NFIU/NIBSS portals for effective regulatory monitoring and supervisions.
The ABCON chief also made a strong case for the creation of an automation portal to encourage registration of undocumented and unlicensed operators for effective monitoring, identification and tracking of their transactions.
Gwadabe linked the reluctance of the Central Bank of Nigeria (CBN) to open new windows through which foreign exchange could be attracted to the economy remains as a major factor causing the depreciation of the exchange value of the Naira.
He lamented that the regulatory authorities’ refusal to approve the BDCs demand for inclusion in the remittance inflow channel to allow Nigerians in Diaspora remit funds to Nigeria through the BDCs under the CBN’s guidance had negatively affected the volume of dollar inflows to the economy.
Noting that the World Bank’s latest Migration and Development Brief showed that 630 billion dollars was attracted to low- and middle-income countries (LMICs) in 2021, with Sub-Saharan Africa attracting $49 billion, the ABCON boss predicted that Nigeria’s contribution to the remittances fund would increase if BDCs are allowed to receive funds into the economy.
To meet this target, the forex market expert recommended that there was urgent need to review the guidelines on BDC’s scope of operations to include participation in payment space, such as agency banking, Point of Sale (PoS) services, in-bound and outbound forex transfers, ATM Forex services, to reflect global business model practice.
He said: “The BDCs should be able to operate a network of digital solutions for Personal Travel Allowance, PTA, and Business Travel Allowance, BTA. This would reduce overheads, and improve profitability. Some BDCs might still consider working closer with commercial banks.
“ABCON can also be recognised as self-regulatory organisation to enable it operate effectively and sanction erring members,” Gwadabe added.
He further explained that in order to sanitize the forex market, the association had resolved to align with the policy thrusts of the CBN and ensure that its members professionally play their roles in the interest of the market and economy.
The ABCON leader maintained that de-marketing of BDCs by regulators and security agencies was not desirable for the stability of the market, noting that the strengthening of over 4,500 operators can be harnessed to bring forex closer to the retail end users and strengthen liquidity in the market.
