…say its directors own BDCs

  • CBN’s policy in order -Experts
Uba Group

Operators and staff of bureau-de-change in Nigeria are currently on the edge as the conditions for their survival in the foreign exchange market become unbearable, investigations have revealed.

Many of the operators, who spoke in separate interviews with our correspondent, accused the Central Bank of Nigeria for the mess it identified in the forex market, saying that the apex bank lacked the will to fight corruption.

According to top sources across the sub-sector, over 80 per cent of the operators may be forced to shut down their operations by the second quarter of the year, especially as a result of the new and stricter regulations introduced by the CBN.
An operator, who pleaded anonymity, told The Point that the decision of the CBN to halt the sale of dollars to the BDCs had practically been a nightmare “as many of us now owe three months salaries while others have had to slash salaries
by 50 per cent or less.”

The operator, who is based in Port-Harcourt, disclosed that he
might shut down by the end of the first quarter if the CBN did not reverse some of its policies.

“The policies are designed to frustrate us out of business. It is unfair on our part because the influx of cabals in the sub-sector is not our fault but that of the CBN, which failed to regulate the market. I expect the apex bank to regulate the activities of all operators and ensure transparency is the watchword. Introducing policies that are anti-productive in the market is unnecessary,” he said.

The Managing Director, Easy Currency, Alhaji Bala Muhammed, who is based in Abuja, is also feeling the heat. He said he had hoped that the CBN Governor, Mr. Godwin Emefiele, would perform better than his predecessor, but that he knew better now.

He said blaming the poor state of the economy on all forex dealers and alleging that BDCs were a framework designed and re-engineered to facilitate and ease corruption in Nigeria was a mere speculation that could only be shared by illiterates.

“If anyone claims we facilitate corruption, where is the CBN? We are only operators in the market and not regulators. If any operator engages in illegal deals, it is the duty of the regulator to sanitise the market without destroying it. The CBN knows the ‘cabals’ in the system but it lacks the political will to probe them,” he said.

The Acting President, Association of Bureau de Change Operators of Nigeria, Alhaji Aminu Gwadabe, has expressed disappointment over the current challenges facing BDC operators. He alleged that the apex bank lacked the political will to fight corruption in the forex market because some of its directors own the dealing firms.

He said, “The information we received on the ownership of the firms is rather unfortunate because on our part, it is difficult to know who is who. But of course, we have the records of ownership. The CBN has the right to investigate the registration materials sent to it. We are awaiting CBN’s probe to really know who the culprits are. But it is not far from some politicians, its directors and other government workers.

“There is a problem on the part of the CBN. The existence of the BDCs is shaking as most of our members are grappling with issues of how to maintain equilibrium in their business as they used to rely heavily on the receiving means of their transactions from the apex bank.”

Meanwhile, the Director-General of the Lagos Chambers of Commerce and Industry, Mr. Muda Yusuf, said that the BDCs lacked an enabling environment to operate in the autonomous market.

This, he said, was the reason they had difficulties surviving in the absence of direct funding from the CBN.

He noted, “What we need is to build enough space for the BDCs to operate in the autonomous market. The CBN should establish a framework that will expand the scope of
operations in the autonomous foreign exchange market and let the BDCs have access to the Diaspora remittances. A lot of funds come from the Diaspora remittances because there are a lot of Nigerians abroad. “So, the BDCs should be able to trade on foreign exchange that comes from some of these multinational companies in export proceeds; the proceeds from the donor agencies and so on. They usually operate in the autonomous market and it should be properly defined. The CBN should relax all its controls affecting the activities of the BDCs in the autonomous market to allow full opportunities for the BDCs to operate within the limits of the autonomous market.”

However, financial experts and industrial watchers have alleged that the BDCs have become bloodsucking merchants and heartless capitalists whose eyes are primed at exterminating the common man.

For instance, the President, Civil Liberties Organisation, Comrade Igho Akeregha, alleged that an average registered BDC was receiving an average of $80,000 weekly from the market, adding that it would also dispense it without the usual structure and controls, which the banks were subjected to. “An economy that encourages a BDC operator to obtain publicly earned funds at N190/$ and sell at N270/$ is an economy that is determined to remain backward. This creates a huge disincentive to seek other avenues for sourcing forex by the operators and allows them to make humongous profits at the
expense of Nigeria and Nigerians,” he explained.

He added that the strong-arm tactics should be adopted by the CBN in order to check the illegal activities of the firms in the forex market.


According to him, they must be encouraged to creatively seek other sources to serve as their stock. This will make them serve as a window for mobilising and mediating small forex receipts from the holders to those that need them for limited purchases.

Like Akeregha, the Chief Executive Officer, Institute of Credit Administration of Nigeria, Mr. Chris Onalo, told The Point that the government should not be held to ransom because the operators were downsizing.

He said, “They will have to downsize because we are talking of a reform that will put this country on a solid, economic footage to compete with other economies of the world.
Nigeria cannot sustain the level of foreign exchange required by Nigerians. I do not believe that the CBN lacks proper regulatory functions. Are we talking of the CBN that was in the outfit of the politicians years back or the CBN that is currently working with the present administration to turn things round.

“They should know that when recession comes up, it would result in the downsizing of workforce; which will lead to the partial close down of some companies. If this has to happen for us to get our economy on the right path, then let it be so.”

Efforts to get the reaction of the CBN to the allegations listed above were frustrated by the Director of Corporate Communications, Alhaji Ibrahim Muazu, as he failed to take his telephone calls or respond to text messages.