Bureau De Change operators have stated that Central Bank of Nigeria’s decision to stop dollars sale to them will have grave implications for the economy.
This was disclosed at the end of a national delegate meeting of the Association of Bureau De Change Operators of Nigeria (ABCON) held in Lagos on Friday.
Acting President of the association, Alhaji Aminu Gwadabe, said the decision would lead to emergence and taking over of bureau de change operations by black market operators, which he said was dangerous to the nation’s economy.
“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 said.
According to him, giving 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.
“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 in order to justify the decision, CBN created the impression that all BDC operators were rent-seekers, who do nothing but engage in round tripping of foreign exchange and speculative activities.
“This is not so. There are many BDCs doing legitimate business as defined by the CBN”, Gwadabe noted, calling on the CBN to slam heavy sanction on erring BDC operators who 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 with 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.
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