New facts have emerged on how the Bureaux De Change Operators in Nigeria are currently shunning the Central Bank of Nigeria’s (CBN’s) Foreign exchange (forex) market for a more profitable parallel market rate, findings by The Daily Times have revealed.
Before now, Association of Bureaux De Change Operators of Nigeria (ABCON) has several times, called for convergence of margins between the commercial banks and the BDCs rates, as well as requesting for more product lines from the apex bank so as to diversify its members operations and position them on path of profitability.
Our further checks, however, showed that the BDCs usually bid at the CBN official window at 360 to the dollar as against 358 that is applicable to the commercial banks operators in the country, hence, creating low patronage and lost for the BDCS, while quite numbered of them have to close down thier businesses in the recent years.
For instance, not less than 1200 BDCs dumped the CBN window on Thursday 4, January, 2018 bidding as only 580 operators bidded in Lagos out of 1700 operators in the business centre of the country.
Commenting on this development in an exclusive interview with our correspondent in Lagos, ABCON President, Alhaji Aminu Gwadabe, said that there is a need for the CBN to merge the commercial bank’s and the BDC’s rate because they are selling to commercial banks at 358, and sell to us at 360 while we can buy from the parallel market at 358.
He said: ” What we are saying is that they should merge the two rares. If they can do lower is better but they said, when you want equity you should go with clean hands. So, we are not asking for what is not practicable, because already there is window of 358 that goes to the bank.”
Gwadabe stressed further that what the BDCs are asking for is to get give the same rate with the banks because, “We have the same market, we have the same buyer and doing the same product. What they are selling is personal travel allowance and business travel allowance which is the same thing we are selling”, he explained.
According to him, “They even have dipper product lines than the BDCs, because they do letter of credit, they do bills for collection, among others. While we are only limited to about four lines. In fact, what we are even writing to the CBN now is to deepen our product lines, diversify our product lines.”
Painting scenarios of how the BDCs can be involved in other product lines, the ABCON boss noted, “for instance, if your child get admission to study abroad and the school fees is $25,000 and may be the tuition is $15,000, both the banks and the BDCs can only sell the tuition, while such customers will have to patronize the parallel market operators for the upkeep of that child.
“I think the CBN can give the BDCs to ensure that people that need upkeep of their children the BDC and do their transactions legally instead of patronising the parallel markets.
Less than a week now, only 580 accessed the CBN, just because the margin has completely been eroded.
He added: “Also, because there are no many product lines, which is more reason why BDCs are patronising the parallel market because it is cheaper and not at a lost.
Meanwhile, the ABCON has called for an emergency meeting of its members to discuss convergence rate and other critical issues in the foreign exchange (forex) market.
Top on the agenda are the convergence of Bureau De Change (BDC) rate with the banks’ rate as well as need to discourage prevalence of un- registered forex operators from trading in the market. Also to be discussed is the rising bank charges associated with BDCs’ transactions.
The meeting, which holds on Wednesday, January 10, at Gloval Hall, Lagos, at 10.00am prompt, will be attended by over 3,500 Central Bank of Nigeria (CBN)-licenced BDCs and members of ABCON.