Fears heightened this week over the likely spike in foreign exchange rates in Nigeria following the crack down on Bureau de Change operators in the country. It could be recalled that the Central Bank of Nigeria (CBN) banned the sales of foreign exchange (FX/Forex) to Bureau De Change (BDC) operators in Nigeria and followed it up with a ban on the registration of new BDC operators with immediate effect.
Godwin Emefiele, CBN’s governor had said at the end of the apex bank’s monetary policy committee (MPC) meeting in Abuja on Tuesday that the bank took the decision to address a lot of anomalies within the system. The decision has proven controversial, with economists, policy experts and other Nigerian citizens who have been engaging in debates over social media since the ban.
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BDCs in Nigeria usually receive a weekly supply of FX from the Central Bank (for people who need USD$5000 or less) for onward sale to retail end-users, however, according to Tech Cabal, the MPC noted that the money exchangers had recently become wholesale dealers and had been illegally trading FX to the tune of millions of dollars per transaction.
According to Emefiele, the CBN receives about 5000 fresh applications for BDC registrations per month as new players interested in foreign exchange continue to make huge profits while Nigerians suffer from the continued “dollarisation” of the economy.
The Apex Bank of Nigeria has also accused BDC operators of alleged “rent-seeking behaviour” and involvements in money laundering operations.
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“They have turned themselves away from their objectives,” Emefiele said.
“They are now agents that facilitate graft and corruption in the country. We cannot continue with the bad practices that are happening at the BDC market.”
From now on, the CBN will send weekly allocations of US dollar sales to commercial banks to meet legitimate FX demands. The banks will also be monitored to ensure that forex is being provided for the legal use of Nigerians.
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“We will deal ruthlessly with Nigerian banks that deal with illegal BDCs and we will report foreign organisations patronising them,” Emefiele said.
Concerns have begun mounting after the ban that the 3000+ BDC operators in the country will now be thrown into Nigeria’s already-large unemployment pool.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry