Bureaux De Change (BDCs) licensed by the Central Bank of Nigeria (CBN) are not part of parallel market operators, the Association of Bureaux De Change Operators of Nigeria (ABCON) declared yesterday.
ABCON President, Aminu Gwadabe, in a statement, distanced his members from the activities of BDC parallel market operators, which have constituted major setback to naira’s stability. He insisted that CBN-licensed BDCs are not parallel market operators as misconstrued by a large section of the public and even top government officials.
Gwadabe disclosed that CBN-licensed BDCs numbering 3,147 at present are key partners of the regulator in ensuring the stability and competitiveness of the naira against world currencies, including the dollar.
He said licensed operators have been given up to December 31 by the CBN to renew their annual licensing fee of N250,000, register with the Corporate Affairs Commission (CAC) and meet the mandatory N35 million capital base stipulated by the apex bank.
Gwadabe disclosed that the Finance Minister, Mrs. Kemi Adeosun, had regularly accused the BDC parallel market operators of contributing to the continuous depreciation of the naira, insisting that CBN-licensed BDCs do not fall within the category being described by the minister because they operate based on set guidelines.
The ABCON chief said the CBN-licensed BDCs not only have their operational offices, they file reports with the Federal Inland Revenue Services (FIRS) and belong to ABCON, which is recognised by the apex bank as the umbrella body for licensed BDCs.
Gwadabe said the licensed BDCs remained committed to naira’s stability at both official and parallel markets, and have consistently partnered the CBN to achieve this objective.
“The CBN-licensed BDCs have always played collaborative and positive roles for the regulator in achieving exchange rate stability. Besides, CBN’s admission of licensed BDCs into the International Money Transfer Operators (IMTOs) window foiled analysts’ forecast for the naira to cross N500 to dollar rate by last December. Besides, the licensed BDCs have weekly rate quoted on the Uniform Weekly Exchange Rate for Licensed Bureaux De Change portal,” he stated.
He said the rate for this week was N399 to dollar, adding that ABCON has continued to ensure that licensed operators abide by the rate while defaulting members will be sanctioned.
Gwadabe, however, described the BDC parallel market operators or unlicensed BDCs as underground operators, without offices, and which do not render returns to the CBN. He said these operators, seen mostly in major streets because they do not have offices, remain the major problem facing the naira.
According to him, “the transactions done by unofficial BDC operators are highly exploitative and lucrative given that they are not bound by any regulation. These set of operators are invisible and are the ones causing the rising gap between official and parallel market rates.”
Gwadabe said the transactions done by these underground operators are bigger in volume than those of the CBN-licensed operators, and therefore have constituted major roadblock to naira’s stability. He said unlicensed BDCs do not render returns to the CBN, are not registered with the CAC and do not file reports at the FIRS.
He said ABCON believes that despite the challenges facing the economy, the CBN and BDCs will continue to work together and find sustainable solutions that can help the country wriggle out of the ongoing forex crisis and achieve full economic recovery.
“ABCON has continuously assured the CBN and taken appropriate measures to ensure that purchased funds are disbursed to end users and for eligible transactions only. We also render weekly returns on purchases from the banks to Trade and Exchange Department of the apex bank. We ensure strict compliance to the provisions of the anti-money laundering laws and observance of appropriate Know-Your-Customer principles in the handling of forex transactions,” he said.
The ABCON chief reiterated the need for the public to deal with CBN-licensed BDCs only, and urged the public to report errant operators for necessary sanction.