BDC operators flay CBN’s new forex policy, fear loss of 40, 000 jobs

One month after the Central Bank of Nigeria (CBN) announced discontinuation of foreign exchange allocation to Bureau De Change firms, operators and traders in the parallel market have bemoaned the implications of the policy on their businesses and livelihood.

Reports say the outlook at the parallel markets in Abuja, Kano and Lagos reflect a bleak scenario, with the traders loitering about due to drastic drop in the volume of transactions in the markets.

President of the Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said the decision to discontinue forex sales to BDC operators by the CBN has led to the loss of over 40, 000 jobs in the economy.

The CBN decided to discontinue the supply of foreign exchange to Bureau De Change operators (BDCs) in clamp down on illegal activities allegedly being perpetrated by some BDC operators.

The CBN Governor, Mr. Godwin Emefiele, while announcing the ban, said there was evidence of prevailing ownership of several BDCs by the same promoters to procure multiple forex from the central bank.

The apex bank was allocating $20,000 weekly to each BDC operator in the country. With 5,500 BDC operators, the figure translated to an annual allocation of $5.72 billion to the parallel side of the foreign exchange market.

Gwadabe said: “The impact of the CBN action include direct job losses of about 40,000 employees and over N200b capital to go toxic.”

Listing further implications of the policy, Gwadabe said the decision paved the way for “dominance of un-official online and ‘Hawala’ activities. Dearth of BDCs expertise developed over the years, increased volatility and confidence crises of the naira, security concerns and increase in prices of goods and services.

“In all the BDCs remained the potent tool for CBN exchange rate stability instruments and accessibility.”

A bureau de change operator in Ikeja, Lagos, popularly known as Alhaji, appealed to the government to consider the forex business as their source of livelihood having fled the northern region due to insecurity.

“I have farmland I inherited from my father in Niger State but nobody can go there again because of the incessant insecurity. Government should please have mercy on us,” he said.

When our correspondent visited the BDCs around Wuse, Zone 4 in Abuja, one of the BDC operators who gave his name as Ismaila said sometimes he gets up to $5,000 allocation from his bank. He added that in a week, sometimes, he gets up to $15,000 to trade with.

But some other operators told different stories. They said they hardly get forex from the banks except for BTA and PTA.

According to them, most of their supplies now come from the walk-in customers and from other sources that have access to forex.

One Abdullahi Kabir said he buys from other markets. He, however, declined to mention their sources.

Some market observers said the BDCs get supplies from some manufacturers who sell products abroad and some exporters.

He also said a lot of supplies come from individuals, especially those in government offices with access to travel estacode and other dollar incentives from their offices.

On the job losses, another operator, who identified himself as Nura, said the BDCs that did not depend so much on the CBN allocation have not sacked their staff but those who rely heavily on the CBN allocations have been greatly impacted by the new decision.

However, he agreed that the volume of trade has dropped.

– Media Report

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