The CBN Operational Manual defines BDCs as small retail end
institutions licensed to carry on the business of selling Personal Travel
Allowance (PTA), Business Travel Allowance (BTA), school fees and medical bills
payment abroad among other roles at the critical retail end of the foreign
exchange market.
However, the various policies of the CBN on the operation of
the sub-sector continues to be inhibitive and limiting BDCs’ from providing
their constitutional roles in the forex market and economy.
Gwadabe, weekend, in Lagos called for collaboration between
the BDCs and the CBN in the implementation of market-friendly policies that
will make the BDCs impact more positively in the market and promoting exchange
rate stability in the economy.
The ABCON boss said the hasty generalisation that
criminalizes the BDC sub-sector as responsible for all market crisis and
infractions like selling dollars with higher premium above regulatory limit,
promoting loss of confidence in the near, and multiplicity of the exchange
rates is not in the best interest of the market and economy.
He said: “It is in view of this disturbing situation and the
need to strengthen BDCs value chain as obtainable in organised climes that we
urge the regulators and policymakers to consider BDCs as the most potent tool
in liberalising the foreign exchange market and stopping multiples exchange
rates in the system.”
He explained that the BDCs have since 2006, provided
policymakers with a window in achieving their mandate of exchange rate stability
and price equilibrium. He therefore called for the reintegration of the BDCs
into the forex market ecosystem to sustain their roles in the economy.
Gwadabe said the BDCs have for years remained effective and
creative in contributing to the forex market.
For instance, the introduction of the Investors &
Exports (I&E) FX window in 2017 was as a result of agitations from
stakeholders like ABCON, foreign investors, Nigerians in Diaspora who advocated
for it to allow more dollar inflows to the economy boost foreign reserves, and
raise confidence in the naira by addressing widening rate premiums.
He said: “In order to address the challenges facing the
forex market, now is the time to integrate BDCs into the market activities as
agent of stabilization and delivering the market to the promised land”.
On how ready the BDCs are for the responsibility, Gwadabe
said the operators have for years been preparing for a time like this by
integrating technology into their operations and promoting efficiency and
transparency in their businesses.
According to him, the BDCs will continue to comply with the
rendition of suspicious transactions reports as directed by NFIU, CBN, and EFCC
through constant training their directors and sanctioning of erring operators.
“In compliance with the provisions of Bank and Other
Financial Institutions (BOFIA) as amended, every BDC renders returns to the CBN
in prescribed format and within the deadline stipulated by the CBN. The records
of the BDCs are made readily available to the CBN examiners as and when
requested including carrying out customer due diligence, corporate governance
and tax returns,” he said.
He said that ABCON has over the years established itself as
a key player in the BDC industry, made several commitments and sacrifices to
ensure that the sector continues to thrive against all odds.
He said ABCON digitized BDCs operations with the official
launch and take off of the ABCON Live Run Automation Portal in Lagos, which has
the backing of the CBN.
Gwadabe reiterated ABCON’s commitment to boosting liquidity
in the forex market, fulfilling its regulatory mandate of bringing forex closer
to the end users and supporting the CBN’s goal of achieving sustainable
exchange rate stability.
“We therefore conclude by urging the regulators to consider
our proposal for the creation of Bureaux de change Autonomous Foreign Exchange
Market (BAFEX) to replicate I&E window initiative, and address concerns of
stakeholders like Nigerians in Diaspora, foreign investors, international
financial institutions stability of the market” he said.