BUREAU de Change (BDC) operators are calling on the Central Bank of Nigeria (CBN) to consider the Diaspora teller option for their members, saying many of them are unemployed.
The chairman of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, told ICIR that since the Central Bank of Nigeria (CBN) cut off the supply of dollars to them, many of its members no longer had any means of subsistence.
“The ban has made many of my staff unemployed,” Gwadabe said.
He urged the federal government to give BDC operators the diaspora window that would allow them to resume operations.
He pointed out that cash was scarce as ABCON members did not have access to the diaspora window.
Gwadabe said, “Countries like India and Lebanon bought these windows to use them. We face many challenges through trading. We are having difficulty with the Diaspora window, the number of export earnings and oil revenues. This is why liquidity is scarce.
He said the election year generally fuels the suspicion that money has been pumped into the foreign exchange market.
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This, he said, comes with porous borders where importing can be commonplace, with emotions impacting that speculation.
“However, we hope that the central bank will solve the problem of the high rate of the naira against the dollar in the parallel market. They already did it in 2016,” he said.
The CBN had officially canceled the processing of BDC license applications in the country last July, saying money changers had become a conduit for illicit currency flows and corruption.
Despite this decision, the inflation rate did not come down, reaching 16.82% in April, while the value of the naira continued to fall, trading this month at around 595 naira to the dollar.
Many industry analysts say the government needs to revive the production side of the economy to fully address the currency challenge.
Analysts say Nigeria needs to go beyond meeting the challenge and sorting out the productive and industrial aspects of the economy.
“All these years, we mainly dealt with financial matters such as exchange and interest rates, while these are only indicators,” said a financial and management consultant and former presidential adviser, Biodun Adedipe.
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According to Adedipe, every economy rests on a tripod, which includes production, consumption and trade.
He said: “When your economy starts leaning more towards consumption than what you produce, then there is a disconnect. This is reflected in your trade and it will be further controlled by external vulnerabilities.
“It shows and exposes many imbalances in trade, payments and the exchange value of your currency. It is because of these imbalances that we have all these currency crises.
“We need to repair our industrial sector to reduce our import bill and put less pressure on our foreign exchange reserve.”
At Nigeria’s recent economic summit, an economics professor and head of the Economic Advisory Council, Doyin Salami, advised the CBN to focus less on managing the foreign exchange market demand and more on managing the offer.
A research analyst at GDL Nigeria, Omobola Adu, also postulated that Nigeria should pay attention to economic diversification.
“To resolve our currency crisis, we need to address the imbalance between supply and demand. One of them is to work on diversifying our export by-products and pricing denomination.
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“The more products we can export at the Naira price, the stronger our currency will be,” Adu said.