The President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, has expressed concern over the rate the naira is caving in to the dollar across all foreign exchange markets. Gwadabe explained in Lagos that with the official market rate now at N430/$ and parallel market rate now at N730/$, a huge gap of N300/$ now existed in the markets. For him, the selling of forex earnings at a fixed rate of N430/$ while open market rate is N730/$ is unorthodox and that lacks credibility and transparency.
“That singular act encourages rent seeking, currency substitution that continues to hurt real sector operators and the overall economy,” he said. He recalled that when the apex bank decided to suspend sales of forex to Bureau De Change (BDCs), in July 2021, the open market rate was about N501/$. Over a year after, the naira to the dollar has depreciated significantly, with a lot of Nigerians not meeting their invisible transactions needs.
Gwadabe said the small retail exchange institutions – BDCs- remained at the centre of CBN’s exchange rate policies implementation, hence the need for the regulator and public to continuously support BDCs’ roles in exchange rate stability. This, he added, could be achieved through increased automation of their processes and providing more channels of transactions for sustainable price equilibrium while eradicating rent seeking, currency substitution and speculation.
“I am very confident that Nigeria will in not too distant future appreciate a stable exchange rate and availability of forex in the local economy as the right people for government policies’ implementation get such responsibility,” he stated. According to him, the CBN Governor, Godwin Emefiele, has tried to introduce many policies to redeem the situation. Gwadabe cited the Naira-4-Dollar scheme of N5 bonus for every $1 diaspora remittances as well as the N65 rebate for every dollar of non-oil export proceeds and other incentives as commendable, but require total overhaul with stakeholders’ engagement.