Operators in the Nigerian money market have urged the Central Bank of Nigeria to approve disbursements of the Renminbi (yuan), stabilise the exchange rate in the country, and review some of its policies in order to further deepen liquidity in the market.
They argued that following the implementation of the $2.5 billion currency swap agreement between the CBN and the People’s Bank of China, disbursements of the yuan to operators of bureau de change would deepen the China-Nigeria swap deal.
President, Association of Bureaux De Change Operators of Nigeria, Alhaji Aminu Gwadabe, explained that the approval would enable BDCs to sell Personal and Business Travelling Allowances to its customers in yuan.
According to him, the sale of BTAs and PTAs to China-bound businessmen would make them get used to the authentic features of the yuan, to avoid being issued fake currencies for transactions.
He said, “The increased use of yuan in trade deals will also open a new business opportunity for BDC operators. The tough regulatory policies and environment, including the N70 million licensing fee for BDCs being championed by the CBN are also concerns to ABCON. This fee is not only outrageous, but has reduced the funds available to BDCs to successfully run their operations.
“We need the apex bank to address some of our challenges such as multiple exchange rate, abnormal bank charges, Value Added Tax and Commission on Turnover, parallel market operators and illegal International Money Transfer Operators, porous international boarders, complex documentation requirements and poor capacity/skills of operators, among others.”
Another stakeholder and a fellow of the Chartered Institute of Bankers of Nigeria, Mr. Pekun Ajao, explained that the increasing difficulties arising from over regulation and complex documentation requirements that licensed BDCs are facing in carrying out their daily legitimate operation is disturbing.
According to him, such hurdles have negative impact on BDCs’ ability to comply with statutory and regulatory requirements and have to be tackled by the apex bank.
He said, “A BDC operator is expected to render daily, monthly, quarterly, half-year and annual returns to six units within the CBN, which could be very cumbersome, repetitive and time-consuming for both the operator and the regulator.
“The operators are also under obligation to render same returns to the Economic and Financial Crimes Commission, Nigeria Financial Intelligence Unit and other statutory government establishments, including the Federal Inland Revenue Service and Corporate Affairs Commission, among others.
To him, these constitute multiple regulation of a unit of the financial sub-sector that is only involved as a small market player. “Unfortunately, some operators have had to pay high penalties to different departments where instant regulations are violated. The result of this is heavy burden on the BDCs, which has continued to challenge their operations. We urge the CBN to take critical look at these challenges and tackle them, in the interest of the financial sector and the economy,” he added.
