BY BAMIDELE FAMOOFO
The Association of Bureaux De Change Operators of Nigeria has developed a roadmap campaign plan needed to save the naira from further decline and enhance exchange rate stability.
The ABCON National Executive Council said the move to save the naira was agreed by the body at the conclusion of its meeting in Lagos, where it unveiled strategies to save the local currency, bridge the exchange rate gaps and curb volatility in the forex market.
The naira exchanges at N596 to dollar at the parallel market and N415.83 to dollar at the official market creating a rate gap of N180.17 per dollar.
The ABCON President, Aminu Gwadabe, said there was an urgent need to enhance dollar liquidity in the market and ensure stability of prices in the economy.
These steps, he said, would save the local currency and economy from the impact of election spending that has kept inflation at double digits for a very long time.
The ABCON boss disclosed that the depreciation of the naira against global currencies was due to pressure from rising dollar demand without sufficient liquidity to meet the demands from retail end users, manufacturers and other key players in the economy. “The naira has consistently come under serious pressure due to dollar scarcity making it difficult for forex end users, manufacturers and key industry players to access dollars needed to meet their needs. ABCON under my leadership will continue to encourage our members to play the vital role of closing the exchange rate gaps in the market and reducing widening premium between the parallel market and the official window,” he said.
Gwadabe listed several factors that continue to undermine the naira stability and the local currency’s value against other currencies.
The ABCON boss called for the creation of BDCs’ Autonomous Foreign Exchange Trading Window with determined maximum daily limit for legible BDCs to access dollars from banks, autonomous market and diaspora forex widow at the prevailing market prices.
He requested enhancement of existing BDCs’ automation portals to file transaction returns on CBN/ABCON/NFIU/NIBSS portals for effective regulatory monitoring and supervisions.
Gwadabe also sought for the creation of an automation portal to encourage registration of undocumented and unlicensed operators for effective monitoring, identification and tracking of their transactions.
He said the reluctance of the Central Bank of Nigeria to open new windows through which foreign exchange can be attracted to the economy remains a key factor in the naira continued fall.
He said the non-inclusion of BDCs in the list of channels through which diaspora remittances flow to Nigeria, under the CBN’s guidance and regulation has reduced the volume of dollar inflows to the economy.
According to him, the World Bank’s latest Migration and Development Brief showed that Sub-Saharan Africa attracted $49 billion in 2021.
The bank said officially recorded remittance flows to low- and middle-income countries are expected to increase by 4.2 per cent this year to reach $630 billion.
Gwadabe said Nigeria’s contribution to the remittances fund is expected to rise when BDCs are allowed to receive funds from Nigerians in Diaspora into the economy.
He said the BDCs are to perform this role through contactless and digitised channels that make collections easy and seamless.
He said there is urgent need to review the guidelines on BDC’s Scope of Operations to include participation in payment space, such as agency banking, Point of Sale (PoS) services, inbound and outbound forex transfers, ATM Forex services, to reflect global business model practice.