President of the Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe has commended security agencies for raiding some traders of foreign currencies whom he described as unlicensed street traders of forex, causing embarrassment to the licensed operators.
This is as the Central Bank of Nigeria (CBN), on Wednesday, increased the rate to N1605.82 per dollar representing a nine per cent increment. The latest increase is coming less than five day the after the apex bank reduced exchange rate for Customs cargo clearance from N1515.48 to N1472.756,
Gwadabe, said it was rather unfortunate that many people do not know how to differentiate the licenced from the unlicensed street hawkers of foreign currencies, a situation he said led to stigmatisation and criminalisation of the sector due to a lack of understanding even with the security agencies.
He said there are criteria for anyone to operate as a BDC operator, including the fact that you must have an office, render returns, and comply with necessary regulations.
“What is happening is not targeted at licensed Bureau De Change but the operator of FX street trading. We are against any street trading and support any actions that will remove street trading. It affects me also. I have an office but my clients cannot come to my office because of the menace of street traders.
“I want to congratulate the government, the CBN if it can be sanitised. We support any sanitization that can remove street trading. We all see that there is no place on earth that you can go and see rampant street trading of FX so we’re in support of it,” Gwadabe said during a chat with journalists on a conference call.
He said the association is putting reforms in place to ensure the credibility of members while urging the Central Bank of Nigeria to support it. “We are revolutionising the entire retail exchange market. “We support any action that will discourage the menace. So many things affect us licensed Bureau De Change Operators. We welcome the idea.”
However, he said there has to be continuous engagement on what should be in place for an effective system.
He said the association had introduced various reform recommendations to the central bank, including how to deploy technology, innovation, and automation of the entire retail end sector in order to leave a sustainable legacy.
He urged all licensed Bureau De Change Operators to be cautious, and careful and operate within the offices they are licensed by CBN and as a licensed Bureau De Change you must operate within the ambit of the regulation most especially in your office don’t do it on the street.
He said the volatility in the forex market is worrisome, a situation he said was caused by the factors of demand and supply and liquidity paucity across board. He said the management of the CBN and security agencies are looking for ways to control the menace caused by the volatility.
However, he said there are a lot of engagements with the CBN stakeholders especially with the Bureau De Change Association of all the BDC operators of Nigeria.
The ABCON president appreciated the management of the CBN for the past two and a half years, saying this is the “first time we have seen engagement and a listening CBN. We have seen how to collaborate to ensure that we get a solution on how we can solve the problem because it is a national crisis that’s where we are now.”
Meanwhile, the Presidential candidate of the Labour party in the 2023 general election, Peter Obi, has called on the federal government to halt inconsistency in duty charges, saying it is affecting the general business atmosphere in the country.
LEADERSHIP gathered that the rate, which has already been reflected on the Customs portal, has further dampened the hope of importers.
LEADERSHIP reports that earlier in June 24, 2023, the CBN adjusted the exchange rate from N422.30/$ to N589/$, and on July 6, 2023, it was adjusted to N770.88/$, on November 14, 2023, it was adjusted to N783.174/$, in December it was adjusted to N951.941/$.
Also, on February 2 it was moved to N1, 356.883/$ and on February 3, it was raised to N1, 413.62/$, on Saturday, February 10, it was changed to N1,417.635/$, on Monday February 11, it was moved to N1,444.56/$1 and on Wednesday, February 14, the CBN adjusted the exchange rate to N1481.482/$1 and on Thursday, February 15th, 2023 it was moved to N1,515.092/$1.
On Friday, February 16th, 2024, the CBN reduced the rate to N1,472.756 per dollar, now, today, Wednesday, February, 21, 2024, it exchanged for N1605.82/$1.
Already, the incessant increases have impacted negatively on the trade volume at the Nigerian ports as some importers have abandoned their goods at the ports while others have fled to the neighbouring ports.
Obi in a statement on his personal X handle, @PeterObi, said high Customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living, is detrimental to the nation’s economy.
According to the former governor of Anambra state, the federal government should stop the arbitrary and ever-increasing Customs duties as it is now negatively impacting businesses and the cost of items in the local market.
“I wish to urgently call on the Federal Government of Nigeria to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country. The federal government should stop the arbitrary and ever-increasing Customs duties as it is now negatively impacting businesses and the cost of items, and this portends a huge danger to the economy.
“A situation where at the point of initiating importation, Form M and other documents related to importation are based on a particular rate of exchange, for example, N1000 to $1, being the prevailing exchange rate at the time which the importer of goods was used to calculate the entire process, from the import initiation to receipt of goods in his warehouse.
“Then suddenly when the goods arrive in Nigeria, and duties are calculated at different rates, say N1400 to $1, it becomes a serious business challenge that results in business losses. Worse still, it directly fuels the inflationary spike which is the basis of increasing cost of goods and living. Such arbitrary charges will obviously lead to further closure of businesses, and attendant job losses. This is because at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate, and the prevailing market prices.
“If this situation is not corrected, our importers may resort to using ports of nearby countries, a situation that will leave our ports under-productive, and further deepen our economy into a worse situation as a result of loss of revenue.”
He further disclosed that businesses are dying while manufacturers are shutting down because of the poor and inconsistent economic policies of the government.
“The government should also show consistency in its policies as this will help with economic forecasting and business planning. Businesses are dying and manufacturers are shutting down because of the poor and inconsistent economic policies of the government.
“All efforts of the government should be directed at supporting businesses, especially those in the manufacturing sector, to keep their businesses afloat and keep the economy growing, as the small business sector remains the most critical engine of economic growth.
“We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living,” he stated.
