Business

BDCs operators reject mandatory fx purchase order

Published

7 years ago

May 28, 2018

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The Association of Bureaux De Change Operators of Nigeria (ABCON) has rejected Central Bank of Nigeria’s (CBN’s) directive that operators make at least three dollar purchases weekly or be sanctioned.

The new CBN’s moves followed last week’s depreciation of the naira against dollar, which saw the local currency closing at N366/$1 at the parallel market on Friday from N361/$1 sustained in nearly one year.

In a statement made available to National Daily, ABCON President, Aminu Gwadabe, said the directive at this time of operators operational difficulties is no doubt precarious and vague and was intended to emasculate a sector that has helped the system to stabilize and thus unacceptable.

He insisted that the regulator should firstly, merge BDC dollar buying rate with that of commercial banks and also pay ABCON disbursement fees as it is practiced globally.

Gwadabe therefore recommended that the CBN cuts the three market days for buying dollars to two at $30,000 per market day.

He said: “The rate between the banks and BDCs should be merged for uniformity and fairness. A situation where the banks buy dollar from the CBN at lower rate than the BDCs is no helping the market stability drive. Besides, ABCON should be considered for disbursement fees like Travelex in the collection centres to ameliorate the new assignments”.

He added that: “The BDC sector is confronted with many challenges such as multiple exchange rate, abnormal bank charges, Value Added Tax (VAT) and Commission on Turnover (COT), parallel market operators and illegal International Money Transfer Operators (IMTOs), porous international boarders, complex documentation requirements and poor capacity/ skills of operators”.

He said a BDC operator is expected to render daily, monthly, quarterly, half yearly and annual returns to these various departments of the same corporate body, which could be very cumbersome, repetitive and time consuming for both the operator and the regulator.

“The BDCs buy dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N361.5/$1 while the CBN sells to commercial banks at N357/$1 and the banks sell to end users at N360/$1,” he said.

He urged the CBN to review BDC rate to align with that of the banks since both sectors serve the same customers.

The CBN had directed in a statement signed by its Acting Director, Corporate Communications, Isaac Okorafor, that: “All BDCs shall henceforth access forex from the CBN on Mondays, Wednesdays and Fridays.

“It is compulsory that all BDCs access forex at least three times weekly. Any BDC that fails to access the forex window at least three times weekly shall have its licence reviewed by the CBN,” the circular had said.