Ban of forex to BDC

By Joseph Erunke – Abuja

ETHNIC nationalities, civil society and human rights groups have thrown their weights behind the Central Bank of Nigeria, CBN, over the latter’s ban on sale of forex to Bureau De Change, BDC operators in the country.

Recall that the Governor of CBN, Mr. Godwin Emefiele,on July 27,2021, after the Monetary Policy Committee meeting ,said announced ban on sale of Dollars to Bureau De Change operators.

The apex bank accused the BDC operators of illegal and illegitimate transactions warranting the decision.

Addressing a press conference Monday,the ethnic nationalities, civil society and some human rights groups including the African Centre for Justice and Human Rights,ACJHR, declared their full support for the CBN decision.

“These operators were making excessive profits from the allocations they get weekly from the CBN and this was to the detriment of the people moreover, they have turned themselves to agents that facilitate graft and corruption in Nigeria and the CBN would not be expected to tolerate this,”they claimed in text of the joint press conference held in Abuja.

Speaking through the President, Middle Belt Youth Forum, Comrade Meliga Godwin, the groups noted that “a few owners registered and promoted multiple BDCs not because they needed expansion of their businesses, but because they took benefit of the weekly $20, 000 which the bank allocated to each of the registered BDCs hence these operators accessed the allocation through multiple companies and used same to aid and launder money.”

“It must be accepted that this ban on sale of Dollars to the BDCs was necessitated by their dubious and unwholesome practices, adding that the operators have gone beyond their primary role of being retail dealers of FX to wholesale dealers.

“It is because of these illicit businesses that BDCs had risen from a mere 74 BDCs in 2005 to 2,786 BDCs in 2016 and about 5500 today. In addition, the CBN receives close to 150 new applications for BDC licenses every month.

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“This increase in operators are only interested in wider margins and profits from the forex market regardless of prevailing rates in the market. A few wicked businessmen are ripping off the system and now want to make it look like they are the victims. Nigerians cannot allow them pull wool over our eyes,”it said.

According to the groups,”BDCs have turned themselves away from their objectives”, adding:” They are now agents that facilitate graft and corruption in the country. The country cannot continue with the bad practices that are happening at the BDC market. BDCs are originally created to take care of retail needs of the ordinary Nigerians who need maximum of about $5000. Now we see BDCs dealing in single transactions worth millions. This is not their function.”

The text read further:”It is indeed wrong for them to have such unregulated financial transactions. Money launderers, looters of our common patrimony and terrorism financiers have access to Forex and can carry out their illicit businesses. The launderer or looter who cannot carry big bags of Naira notes around but can quickly place a call to their BDC collaborators who sell millions of Dollars to them in undocumented transactions. These are people who ordinarily are not supposed to have access to Forex but now have unregulated, undocumented access.

“The wider negative national security and economic impact of this can only be better imagined than experienced.

With this new policy in place, the media and indeed the public should note that once a customer provides basic documentation to purchase FX, all banks must immediately meet that on demand or within a stipulated timeframe sell foreign exchange to the customer. This meets the basic requirements for documentation and regulation. It also makes Forex readily available to those who readily need it and out of reach for those who do not have genuine need for same.

“Nigeria until today was the only country in the world where the Central Bank sell Forex directly to BDCs. Is it not even strange that we waited this long before we joined the rest of the world? Should this bold step not be generally applauded rather than condemned? Is anyone afraid that the CBN is doing the right thing? Should sponsored opinions to stop the effective implementation of this new policy be allowed to determine the narrative on this issue? Nigerians must own this process and apply the necessary pressure to CBN to ensure that this policy is effectively and conclusively implemented.”

They further noted that “the gradual Dollarization of the Nigerian economy with attendant adverse consequences on the conduct of monetary policy and subversion of the cashless policy initiatives of the CBN will be tackled by this new decision of the CBN.”

“BDCs had resorted into financing of unauthorized transactions with FX procured from the CBN. For many years, the activities of some of the BDCs have continued to undermine genuine efforts at stabilizing the currency which informed CBN’s commencement of weekly sales of FOREX to the BDC operators,” the statement read.

Vanguard News Nigeria

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