One month after the Central Bank of Nigeria (CBN) announced discontinuation of foreign exchange allocation to Bureau De Change firms, operators and traders in the parallel market have bemoaned the implications of the policy on their businesses and livelihood.
Our correspondents who visited some of the parallel markets in Abuja, Kano and Lagos report a bleak atmosphere as traders loiter about due to the drop in the volume of transactions in the markets.
The president of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe laments that the decision to discontinue forex sales to BDC operators, by the CBN, has led to the loss of over 40, 000 jobs in the economy.
The CBN decided to discontinue the supply of foreign exchange to Bureau De Change operators (BDCs) in its attempt to clamp down on illegal activities allegedly being perpetrated by some BDC operators.
The CBN Governor, Godwin Emefiele, while announcing the ban said there was evidence of prevailing ownership of several BDCs by the same promoters to procure multiple FX from the central bank.
The apex bank was allocating $20,000 weekly to each BDC operator in the country. With 5,500 BDC operators in the country, the figure translated to an annual allocation of $5.72 billion to the parallel side of the foreign exchange market.
Speaking to newsmen in a post mortem of the CBN action, Gwadabe said: “The impacts of the CBN action include direct job losses of about 40,000 employees and over N200b capital to go toxic.”
Listing further implications of the policy, Gwadabe said the decision paved the way for “Dominance of un-official online and ‘Hawala’ activities. Dearth of BDCs expertise developed over the years, increased volatility and confidence crises of the naira, security concerns and increase in prices of goods and services.
“In all the BDCs remained the potent tool for CBN exchange rate stability instruments and accessibility.”
