The Association of Bureaux De Change Operators of Nigeria (ABCON) has unveiled some strategies on how to save the naira from further decline and improve the stability of the exchange rate.
These roadmap strategies/campaign plans are necessary to save the naira from further decline, bridge exchange rate gaps, and curb volatility in the forex market.
The disclosure is contained in a statement issued by ABCON Chairman Alhaji Aminu Gwadebe following its National Executive Council meeting held in Lagos on Thursday, where he said there was an urgent need to improve liquidity. in dollars in the market and to ensure stability. prices in the economy.
Gwadebe in the statement said implementing these strategies will save the naira and the economy from the impact of election spending which has kept inflation in double digits for a very long time.
The ABCON boss said the depreciation of the naira against global currencies was due to pressure from growing demand for dollars without sufficient liquidity to meet the demands of retail end users, manufacturers and other key players in the industry. the economy.
Strategies to Save the Naira and Close the Exchange Rate Gap
Gwadebe described some of the strategies to include;
- The creation of the BDC Autonomous Currency Exchange Window (BAFEX) with a determined maximum daily limit for readable BDCs to access dollars from banks, the autonomous market and the diaspora forex window at prevailing market prices.
- Enhancement of existing BDC automation portals to file transaction reports to CBN/ABCON/NFIU/NIBSS portals for effective oversight and regulatory oversights.
- Creation of an automated portal to encourage the registration of undocumented and unlicensed operators for effective monitoring, identification and tracking of their transactions.
- Review of BDC’s scope of operations guidelines to include participation in the payments space, such as agency banking, point-of-sale (POS) services, inbound and outbound currency transfers, ATM services Forex, to reflect the practice of the global business model.
- BDCs should be allowed to access dollars or diaspora remittances through standalone forex windows, such as allowing traders to receive products from IMTOs, conduct online dollar transactions, and POS agency ( PoS), among others. Gwadabe said now is the time to break the current industry monopoly that puts the remittance market in the hands of a few players, depriving others from tapping into the plan.
- The establishment of training institutes to build industry capacity and infrastructure and broaden the scope of activity of players with cash back incentives for those who attend BDCs. This while implementing less cumbersome and complex documentation requirements for end users.
What the president of ABCON says
Gwadebe said, “BDCs should be able to operate a network of digital solutions for Personal Travel Allowance, PTA, and Business Travel Allowance, BTA.
“This would reduce overhead and improve profitability. Some BDCs could still consider working more closely with commercial banks.
“ABCON may also be recognized as a self-regulatory body to enable it to operate effectively and to sanction offending members.”
Gwadabe said ABCON has decided to align itself with the policy direction of the apex bank and ensure that its members perform their roles professionally and strategically for the benefit of the market and the economy.
He warned that the demarketing of BDCs by regulators and security agencies is not good for market stability, but the strength of over 4,500 traders can be harnessed to bring forex closer to retail end users and enhance market liquidity. .
He said ABCON has developed multiple applications for transforming BDCs from CBN ATMs into globally competitive entities capable of attracting foreign capital flows into the economy.
Gwadebe said, “We support all measures that would lead to compliance with the Anti-Money Laundering and Counter Terrorism Financing (AML/CFT) Act.
“We support CBN’s exchange rate stability policies and urge security agencies to punish any BDC operator who violates corporate governance and compliance guidelines.
“We sincerely believe that the BDCs should be formally reinstated to ensure their strong and continued role in managing exchange rate stability.”
The ABCON boss said recognizing the role of BDCs in the Nigerian financial sector remains the first step towards building a sustainable and viable foreign exchange market, in tandem with international best practices.