…To close down BDC that does not operate electronically 

By Peter Egwuatu

The Acting Governor of the Central Bank of Nigeria, CBN, Mr Folashodun Adebisi Shonubi has disclosed that banks and the apex bank are working assiduously to clear the backlog of foreign exchange in the country.

The Governor also stated that plans are on to close down Bureau De Change, BDC which does not operate electronically.

Shonubi stated this in Lagos when the newsmen confronted him with questions on the lingering challenges in the foreign exchange, forex market.

FX backlogs, which is the unmet demand for forex by investors and exporters, are estimated at $10 billion and have resulted in huge losses by many firms, according to market players.

Shonubi said, “There are various banks that are working with the CBN to clear the backlog in various structures. We would clear the backlogs in the next one to two weeks.

“As a matter of fact, there’s a large amount of the obligations that the banks in Nigeria have already taken on. What happened was at maturity, they actually made the financing available for those who needed to use it, the importers. We are discussing, so we can structure their role so that’s very different.

“Then there are some customers who still have their obligations and are part of the restructuring with the banks in Nigeria. To also clear that backlog is something we have been discussing for a while.” 

While commenting on the eroding value of naira, he said “Our responsibility as the apex bank is to ensure price stability. We don’t want to act as a major player in the forex market. We only intervene when the need arises, but many people do not understand the difference between the BDC and the black market. 

“The BDC instead of playing its primary role; the foreign currency they get they take them to the black market. We would soon close down any BDC that does not operate electronically. Forex market is supposed to be seamless and transparently carried out.”

The naira free fall has raised serious concern from policymakers, monetary authorities, the organised private sector, foreign investors, and the general Nigerian public, especially as its N955/$ at the parallel market mounts pressure on the already worsening cost of living.

It is argued that the country didn’t provide concrete steps to bolster dollar supply, a situation that has pressured the poorly FX-supplied official segment of the market.  Daily trading has averaged $106 million versus $110 million prior to unification, amid signs of fresh weakness at the parallel market.