By Dipo Olowookere
The Association of Bureaux de Change Operators of Nigeria (ABCON) has taken a swipe at the Central Bank of Nigeria (CBN) over the depreciating value of the local currency.
The President of ABCON, Mr Aminu Gwadabe, in an interview with The Punch, said some of the regulatory policies of the apex bank are affecting the Naira value in the foreign exchange (FX) market.
He said, for example, the running of more than one forex regime in Nigeria was decreasing the inflow of foreign currencies as the gap between the official exchange rate at N416/$1 and the black market at N600/$1 was too wide.
Mr Gwadabe also said the amount needed to obtain a licence to operate as an International Money Transfer Operator (IMTO) is not the same for local and foreign operators.
“There are a lot of inhibitive regulatory policies. In Nigeria now, for you to say you have a licence to operate as International Money Transfer Operator, the capitalisation is N2 billion for a local company.
“A foreign company comes in and gets a licence at $1 million. How much is $1 million compared to N2 billion or N600 million?
“This is for a foreign company that wants a licence of IMTO, but for a citizen, you have to cough out N2 billion? So, it is not encouraging small players,” he said.
Speaking further, he said, “The foreign exchange market is like any other market determined by market forces, demand and supply. Investors’ inflows; both the direct and the portfolio investors are not coming. Why? This is because of the existence of official and flexible exchange rates.
“No investor will want to come and say I want to give my money because I am patriotic. When Nigerians are not selling their money at the official rate, do you expect a foreigner to sell his/her money at the official rate? The same thing is applicable to diaspora remittances.
“Recently, the World Bank did repeat that Nigeria has the largest chunk of diaspora remittances out of $49 billion that came last year. Bloomberg statistics says ours is about N34 billion. So, where are all these monies?
“When you ask, they will say the money is coming in cars, clothes, and all that. That is not true. The money the NGOs are bringing into the local economy is far less than the money they are taking abroad. We want to help our people anywhere we are. Go abroad, Nigerians still send money to Nigeria but because of the multiplicity of exchange rates, you cannot see that money officially.”
As for the solutions to these issues, the ABCON leader advised the central bank to lift the ban on the sale of forex to bureaux de change (DBC) operators, saying the “overwhelming regulation and the overwhelming criminalisation are not the best.”
According to him, the group has automated its operations to reduce “unwanted behaviour because everything is transparent and accurate.”
“As an association, we have embraced technology. We have transformed our operations. We have four different platforms to automate our system, and we are calling for the urgency for allocation of diaspora remittances,” he added.
Mr Gwadabe said his members want to be “involved in the foreign remittances channel because the market is huge. Because of the monopoly, it has been an exclusive preserve of banks. They should break that monopoly. We are not even saying stop the banks, but out of the 100 per cent they are doing, even if we have 25 per cent for a start, the automation that we have in place has taken care of the security and structure needed.
“Our process has been automated and we are easily accessible to the public. In other climes, banks don’t really do some transactions. If you want to send $200 to your family, they will show you the BDC to go to. But now, banks run after a $200 customer.
“The association of the BDCs is no longer where people think we are mallams. We are a group of professionals. We can collaborate, we can give advice, and most of us are even coming from the banking industry. We are lawyers, we are engineers. The BDCs should be allowed to access dollars or diaspora remittances through the autonomous forex windows that enable operators to receive IMTO proceeds, among others.
“This is the time to break the current industry monopoly that puts the remittances market in the hands of few players depriving others of tapping into the plan,” adding that, “There is an urgent need to enhance dollar liquidity in the market and ensure the stability of prices in the economy.”
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