The latest Central Bank of Nigeria's (CBN) decision to stop the sale of FOREX to Bureau De Change (BDC) operators due to the reported abuses that have
The latest Central Bank of Nigeria’s decision to stop the sale of FOREX to Bureau De Change operators due to the reported abuses that have characterized their transactions since the commencement of regular issuance of up to $10,000, twice a week or thereabout by the Apex Bank, has, expectedly, been eliciting mixed reactions.
Before now, the motivation of the CBN to sell foreign exchange to the Bureau De Changes operators was mainly for ease of access to the end-users, to halt the seemingly scarce FOREX, and to shore up the exchange rate of the Naira. But according to CBN figures, this rather led to the astronomical growth of the number of the BDCs in the country from a mere 74 in 2005 to over 5,500 BDCs as of July 27, 2021.
The further negative implications of the compliance failures of the BDCs include but are not limited to the dollarization of the Nigerian economy, subversion of the cashless policy, common ownership of several BDCs by the same operators in the sector in order to obtain multiple FOREX from the CBN and continued patronage of illegal BDCs by international organizations and embassies.
“In total disregard of the difficulty that the bank is facing in meeting its mandate of maintaining the country’s foreign exchange reserves to safeguard the value of the naira, we have continued to observe that stakeholders in some of the sub-sectors have not been helpful in this direction.
It is against this background that the change in CBN’s policy direction to sell FOREX to Deposit Money Banks and to retain them as FOREX retail outlets in the country should be given a chance. And not a few have applauded the shift. They contended that apart from halting the prevailing anomalies and illicit transactions inherent in the operations of the BDCs, it will conserve the colossal wastes of scarce FOREX in funding operations of the BDCs.
According to Dr. Sam Nzekwe, “BDC is meant for light travelers, someone that is traveling and has no time to go to the bank who can just stopover at the airport and buy few dollars and travel with it. The CBN was allocating forex to them which was a wrong decision, and it is a terrible thing. That is why they encouraged round-tripping.”
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