BDC Operators Fault Petition Against CBN Gov Over Forex Policy - Uju Ayalogu's Blog for News, Reviews, Articles and More

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Monday, 30 December 2019

BDC Operators Fault Petition Against CBN Gov Over Forex Policy

BDC Operators Fault Petition Against CBN Gov Over Forex Policy

Members of the Association of Bureau de Change Operators of Nigeria (ABCON) have defended the governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, over his policy on foreign exchange allocation to Bureau de Change (BDCs) in the country.

They said that the policy has stabilised the naira against the dollar.

In a statement issued by ABCON president, Alhaji Aminu Gwadabe, the operators faulted the petition written against Emefiele and his management team over the deployment of dual exchange rate regime in forex allocation.

Gwadabe, specifically faulted the N305/$ rate to BDC proposed by the petitioner, arguing that it is not transactional rate but used for setting government obligations.

The Senate Committee on Finance has invited Emefiele to appear before it on February 7, 2020 following a petition by human rights activist, Bar. J.U. Ayogu, accusing the CBN governor and its management team of compromise in the allocation of foreign exchange.

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“There is a case against the CBN governor and his management team written by Bar. J.U Ayogu. A petition before the Senate laid on December 12, 2019 where Bar. J. U Ayogu, Esq, on behalf of the Bureaux De Change Operators of Nigeria wrote against the CBN over its dual exchange rate forex policy that enriches a few Nigerians and its top management staff to the detriment of many lawful Nigerians and frustrating the policy of the present administration of eradicating poverty and unemployment from all the nooks and crannies of Nigeria,” member, Senate Committee on Finance, Senator Ayo Akinyelure (PDP, Ondo Central) said.

The petitioner had pleaded with the Senate to compel Emefiele to review the policy of dual exchange rate without delay to keep BDC operators in business.

But ABCON in its response asserted that the CBN forex policy has brought stability to the BDC sector and helped operators to embrace automation which is the standard practice globally.

“This is the hand work of unknown faces not ABCON. It is confrontational and lack credible evidence.

The N305/$ is not a transactional rate but for settling government obligations. ABCON submission to the National Assembly is on Value Added Tax (VAT) exemption and review of licence fee renewal downward submitted to the CBN. The petitioner was never at any time appointed to speak on behalf of the BDCs,” Gwadabe said.

He said that no BDC or service provider gets forex at N305 to the dollar and that the petitioner’s claim was completely false.

Gwadabe said that ABCON has appointed Mike Akinfolarin & Associates as its consultant/tax Attorneys on VAT, which is a bigger problem confronting the operators as a large part of their income go into paying taxes, adding that in other economies, foreign exchange rate control by government is VAT exempt.

“The law firm of Mike Akinfolarin &Associates (tax attorneys) made a representation on behalf of ABCON before the National Assembly public hearing – the House Committee on Finance Bill – on November 25, 2019 in Abuja. And that remains the position of ABCON,” he said.

Gwadabe further explained that beyond the rate differentials, Nigeria needs multiple streams of forex earnings and the enlisting of more channels to attract Diaspora remittances and other foreign capital that will not only deepen the market, keep the naira stable and boost operations of BDCs.

He said that Diaspora remittances to Nigeria, which stood at $25 billion annually in 2018, remains a reliable source of forex to the domestic economy and should form part of the revenue stream for the over 4,500 CBN-licenced BDCs.

The ABCON boss said that there is need to make BDCs one of the channels for receiving Diaspora remittances into the economy to create more income for operators, stressing that BDCs remain at the centre of economic development and have the capacity to attract needed capital for the growth of the Nigerian economy.

Gwadabe continued: “Other great areas to focus in diversifying our foreign exchange earnings include promoting Diaspora remittances for economic buffer and foreign reserves accretion as seen in India and United Arab Emirates (UAE) where migration remittances have lifted their economies.

“The ABCON Executive Council under my leadership will continue to promote improved capacity and technological advancement among BDC operators. We are also committed to better skills acquisition for BDC operators to elevate them to viable monetary regulatory partners and lead players in exchange rate stability,” Gwadabe said.

He commended the CBN management for its progressive policies and for achieving stable exchange rate that aligned with its price stability mandate, noting that with improved availability of foreign exchange, the exchange rate at the Investors’ and Exporters’ Forex window has remained stable for over two years at an average N360/$, and the parallel market exchange rate has appreciated from N530/$ in February 2017 to around N360/$.

Gwadabe said the CBN has been able to create a people-focused central bank promoting macro-economic objectives such as low inflation and a stable exchange rate, along with a focus on promoting inclusive growth and reducing unemployment in the country.

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