Stacks of US fifty and one hundred dollar bills in money bag

Association of Bureau De Change Operators of Nigeria, ABCON, has condemned the Central Bank of Nigeria, CBN, over its decision to stop dollar sales to Bureau De Change operators which may portends grave implications for the economy.
This was disclosed at the end of a national delegate meeting of held in Lagoson Friday.
Acting President of the association, Alhaji Aminu Gwadabe, who briefed the media at the end of the meeting attended by zonal leaders across the country said the decision will lead to emergence and taken over of bureau de change operations by black market operators which he said is dangerous to the nation’s economy.
His words: “First is the spike in the parallel market exchange rate from N270 to N290 per dollar within three days of its pronouncement and now N305 per dollar. Over time, this would lead to increased scarcity of dollars even for legitimate activities and further depreciation of the naira”.
He added that given the import dependency of the country and the inability of importers to access dollars in the official market, the increased exchange rate would aggravate the inflationary pressure in the economy as prices of goods and services will rise in response to the continued depreciation of the naira.
The reality, according to him, as indicated by the CBN Governor is that foreign exchange inflows have fallen sharply due to decline in crude oil price, adding that despite this, the demand for foreign exchange has not abated.
“Despite the banning of 41 items from the nations foreign exchange market, the CBN has not been able to meet demand for legitimate items even in the official foreign exchange market. The result, according to a recent report by Recap, is that Nigerian banks are battling with dollar obligations in excess of $5 billion. The inability of the CBN to meet demand for foreign exchange for legitimate items is what is fuelling demand at the parallel market and depreciation of the naira in the market”, he added.
Gwadabe said the association frowned at some of the claims by the CBN Governor, Godwin Emefiele, on the suspension of sales of dollars to BDCs, saying some of them are not correct reflections of the role and contributions of BDCs in the foreign exchange market.
” In order to justify the decision, the Governor resorted to casting aspersion and criminalisation on the the business of BDCs and created the impression that all BDC operators are rent-seekers, who do nothing but engage in round tripping of foreign exchange and speculative activities. This is not so. There ate many BDCs doing legitimate business as defined by the CBN”, Gwadabe added.
He then called on the CBN to slam heavy sanction on erring BDC operator found to have contravene its laid down rules.
“There will always be bad eggs in every group or industry and the foreign exchange market is not an exception.
“Given the openness and dependent nature of the Nigerian economy, the huge demand for foreign exchange and multiple CBN circulars on foreign exchange restrictions indicates the inability of the CBN to meet genuine demands, and the widening of the gap between the official and parallel market exchange rate, there will be individuals who will not be able to resist the temptation to engage in rent seeking and round tripping.
“This individuals are not limited to BDCs but also include banks and other participants in the foreign exchange market”, he stressed.
The association, while reacting to another pertinent point in the address by the CBN Governor which is the amount of dollars CBN it sells to BDCs, asked how many of the over 3000 licensed BDCs does the CBN sell dollars to on a weekly basis.
Gwadabe said: “In the last one month, the CBN has been rationing dollar sales to BDCs, with less than half accessing the dollar windows. The Governor should have state how much dollars the CBN actually sold to BDCs on an annual basis rather than estimating how much is been sold. For example, in 2014, according to the quarterly economic reports of the CBN, the CBN sold $4.4 billion to BDCs while it sold $43.65 billion to banks through the Retail Dutch Auction.
“This reveals that out of the $48.09 billion sold by the CBN, less than 10 percent was sold to BDCs. Yet Governor Emefiele wants the world to believe BDCs are buying most of the nations foreign exchange”.


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