July 27, (THEWILL) – The Central Bank of Nigeria (CBN) will no longer sell foreign exchange to Bureau De Change (BDC) operators in the country.
Additionally, the apex bank has also discontinued the issuance of new licences to new entrants into this segment of forex market players.
The regulator said it will henceforth sell dollars and other foreign currencies directly to commercial banks, which have been mandated to sell directly to Nigerians, thus bypassing the BDC outlets.
The CBN Governor, Mr. Godwin Emefiele, who disclosed this on Tuesday in a live TV broadcast as part of the post-MPC meeting briefing, noted that the measures were taken to sanitise the forex market, which he said had been distorted by the illegal activities of BDC operators and other organisations.
According to Emefiele, the CBN has henceforth ended the sales of forex to BDC operators, noting that the parallel market has become a conduit for illicit flows and graft facilitated by the BDCs.
Emefiele said that weekly sales of foreign exchange by the CBN will henceforth go directly to commercial banks whose traditional role it is to sell to the public as authorised dealers.
“We are concerned that BDCs have allowed themselves to be used for graft,” Mr Emefiele said, stressing that the CBN will henceforth deal directly with the banks.
According to him, international bodies, including some embassies and donor agencies, have been complicit in illegal foreign exchange transactions that have hindered the flow of imported currency into the country.
He said the erring organisations have chosen to channel forex through the Black Market than use the official Investors and Exporters (I&E) window, called Nafex
Emefiele said the regulator will “deal ruthlessly” with banks allowing illegal forex dealers to use their platforms and will report the defaulting international organisations to their regulators.
“We will deal with them ruthlessly and we will report the international bodies,” he said
Accordingly, Emefiele said banks are mandated to “immediately” and transparently sell forex to customers who present the required documents. All banks are to immediately create dedicated tellers for the same purpose.
Customers not attended to by the banks are to report to the CBN through a toll free number: 0700 22 55 226 or email: cbd@cbn.gov.ng.
“This measure is not punitive on anyone, but it is to ensure the CBN is able to carry out its legitimate mandate of serving all Nigerians,” Emefiele said
The CBN Governor disclosed further that the apex bank has stopped the licensing of new Bureaux De Change (BDCs) across the country.
This might not be unconnected with the huge number of applications that the apex bank receives monthly and the reported illegal activities of some of them.
Emefiele reported that the CBN receives about 574 licence applications from BDCs every month, adding that there are currently 5,500 licensed BDC operators across the country.
When contacted, the President, Association of Bureau De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said the association is still watching developments on the matter, adding, “There is no further comment for now.”
Meanwhile, the CBN Monetary Policy Committee (MPC) meeting that held on the 26th and 27th of July, 2021 has announced a decision to hold all policy parameters constant as follows:
1. Retain the MPR at 11.5 per cent;
2. Retain the asymmetric corridor of +100/-700 basis points around the MPR;
3. Retain the CRR at 27.5 per cent; and
4. Retain the Liquidity Ratio at 30 per cent.
The CBN Governor, Godwin Emefiele, in his post-MPC media briefing disclosed that the Committee’s decision was guided by the prevailing economic realities especially to push GDP out of its sluggish rate. Data from the National Bureau of Statistics shows that Nigeria’s economic growth remains fragile post-lockdown following a 0.51% jump in the first quarter of 2021 after about a 2% year on year drop in 2020.
It also aims to continue support for further deceleration of the inflation rate which has witnessed three consecutive declines –17.75 percent in June, from 17.93 percent in May, 2021.
CBNAbout the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
