The Association of Bureaux De Change operators of Nigeria (ABCON) is recommending a process of integration of the BDC into the Investors and Exporters (I&E) forex windows.
The I&E forex window was created in April 2017 by the Central Bank to cater to invisible transactions (capital repatriation, dividend remittances, loan repayments, loan interest repayments, software subscription payments amongst others), bills for collection and any other trade related payments with the exception of international Airlines ticket sales’ remittances.
However, the Association is concerned by the multiplicity of foreign exchange windows operated by the Central Bank of Nigeria (CBN) and the resultant multiple exchange rate regime in the economy.
The Africa’s biggest economy has at least six exchange rates ranging from one for Muslim pilgrims going to Saudi Arabia, a retail rate set by licensed BDCs, and a rate for foreign travel and school fees, official and black market rates.
The total efficiency loss caused by the current multiple exchange rate regime is estimated at about 14–17 percent of the country’s GDP.
“The issue of multiple rates is a thing we have been discussing with the CBN. It is not helping a lot of companies to plan. So, we are imploring the CBN who is the custodian of exchange rate management to work towards a single exchange rate that would favour the economy”, Aminu Gwadabe, acting President of ABCON said.
Giving an instance, he said the CBN sells dollar to the banks at N358 to the dollar and to BDCs at N360 to a dollar.
“And we are meant to sell the same products to members of the public. Also, dollars for PTAs, BTAs and schools fees which we sell are also being sold by the banks and the CBN is giving them preferential treatment. In view of that, our members are operating at a loss. That is why we are calling on the management of the CBN to consider our plight”, Gwadabe said in the newly introduced ABCON Quarterly Economic Review.
The quarterly economic review series will focus on review of the performance of key indicators in the Nigeria economy during the immediate quarter. Emphasis will be laid on the aggregate effects and especially the foreign exchange market.
ABCON is also concerned on the ripple effects of the forthcoming 2019 elections and the preceding campaign process. The development, which would be another round of economic shock, according to him, would see foreign investors who invested billions of dollars in the equities market taking their exit. He said the negative implication of the exit of portfolio investors from the local bourse therefore, is a major concern on the local currency’s continued stability.
The report urged operators to adhere to all compliance guidelines for transparency operations and users of foreign exchange to desist from patronizing parallel market to avoid the risk of loss of their funds.