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ABCON cautions on regulatory infringement

Lagos, Feb. 24, 2024: The Association of Bureau De Change Operators of Nigeria (ABCON) has cautioned its members on the need to abide by extant laws establishing them.

ABCON President, Alhaji Aminu Gwadabe, in a statement on Friday, warned licensed operators against regulatory infringements that would dent their image.

He insisted that those trading forex on the streets being arrested by the Economic and Financial Crimes Commission (EFCC) were not licensed BDC operators.

The nationwide EFCC raids and clampdown on street hawkers of forex is to ensure sanity and standardisation of retail and foreign exchange market.

The move, he said, was to ensure only licensed and accredited retail entities were allowed to trade in the market.

The ABCON boss further explained that the raids were only limited to unlicensed and undocumented operators and not targeted at licensed operators.

He said ABCON and its members were not allowed to trade on the streets or carry unauthorised dealings outside the purview of the Central Bank of Nigeria’s operational guidelines.

He, therefore, called on all ABCON members to ensure they operate within the guidelines of the extant rules and regulations of the CBN.

“In line with our obligations, ABCON supports the drive of authorities to streamline any illegal economic behaviours.

“It is also important to note that our members are excluded in the foreign exchange market and all efforts and collaborations with the Central Bank are ongoing to ensure the return of our members’ participation in the market,” he said.

Large bundle of US dollars

ABCON advises CBN to stop binance to strengthen naira

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Lagos, Aug. 9, 2023: The Association of Bureaux De Change Operators of Nigeria (ABCON) has urged the Federal Government to use everything within its powers to stop  operation of Binance in the country.

Alhaji Aminu Gwadabe, President of ABCON, gave the advice on Tuesday in Lagos.

Binance is an online exchange where users can trade cryptocurrencies. It supports hundreds of the most commonly traded cryptocurrencies.

According to him, Binance is one of the many factors putting pressure on the naira.

The Securities and Exchange Commission (SEC) of Nigeria had in June,  issued a statement,  emphasising that Binance Nigeria was not registered or regulated by SEC, making its operations in Nigeria illegal.

Gwadabe said, “If you know about Binance, you will know that Binance trading is becoming the anchorage of both the investors and exporters window and the parallel market, which is unfortunate.

“So, we have to do something that can stop  Binance. It’s a competition; we need to ban Binance and the only way to do so   is if you have liquidity.

“ As I speak, Binance is the most liquid market; they do 1.2 million transactions per second. So it’s a very liquid market but that is not a scary status, we can break it through our local content and peculiarities.”

The ABCON president noted that optimism was giving way to pessimism in the present foreign exchange market situation.

Gwadabe said that when pessimism overrode the psychology of the market, it would lead to loss of confidence by citizens, saying that was key in every currency of every nation.

“So we are seeing a scenario where optimism is giving way to pessimism; investors are not coming, Nigerians don’t have confidence in the market and we have to look for external finances that are coming in as a quick fix.

“There is a lot of pressure on the naira, from foreign exchange hoarding by the banks and oil companies.

” Is it Nigerians that want to pay school fees, round tripping, speculations, among others. All these galvanised to put pressure on the naira.

“Spike and volatility did not start now, it’s something the present government inherited and has gone a long way in checkmating illegal behaviours around foreign exchange market and that is the objective of the unification,” he said.

Gwadabe expressed hope that with petrol subsidy removal, the Central Bank of Nigeria would be able to see remittances from the Nigerian National Petroleum Corporation (NNPC) saying when subsidy began, the remittance to CBN from NNPC was zero.

This, he said, would also allow the apex bank to have liquidity and inflows that would come in for them to be able to defend the naira.

He said If we have a friendly, competitive and transparent system, more investors would want to come to the market.

”So, for us to succeed,  there must be liquidity. Countries that adopt floating exchange are countries that have heavy reserve and balance of payment to fallback on,” he said.

The ABCON president urged  the National Assembly to come up with legislation that would protect investors in the market.

“So, we need legislation now that the market is in tiers so that everybody will follow the law, know his obligation and be protected under the law. Once you meet up with your obligation, you are good to go,” he said.

On revocation of licences of 2,698 BDCs by CBN, Gwadabe discredited the report saying, “as far as I’m concerned that list was not correct and still not confirmed.

“The CBN has yet to come out with their comprehensive list. Yes, CBN is reviewing the BDC register with a view to reducing the number but as of now, there is no official list that proscribes or says these are the licensed or unlicensed.

“So the statuesque remains the same,” he said.”

The ABCON president said the association had engaged with CBN and had been advised to sensitise its members to know the conditions guiding their operations and their obligations which was to render returns to CBN.

“We have a different department in CBN that supervises us that we need to be updating our records with them in terms of returns, change of address, change of directors and other issues involving technicality to render returns.

“So, these are the things that we have appealed to CBN and because of our low business and no activity, a lot of our members have closed shop but that is not an excuse.

“Nevertheless, the CBN has listened to our difficulty and has given us some months to go and work on these and improve on our returns,’’ he said.

The CBN had in July, reduced the number of BDC dealers from 5,689 previously approved in 2022 to 2,991.

The document titled ‘Approved BDCs’ revealed that the licences of 2,698 BDCs had been revoked.

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ABCON unveils roadmap to save naira from further decline  

The Association of Bureaux De Change Operators of Nigeria (ABCON) says it has developed a roadmap campaign plan needed to save the naira from further decline and enhance exchange rate stability.  

This is contained in a statement by ABCON at the end of it’s National Executive Council meeting held in Lagos, where it unveiled strategies for save the local currency, bridge the exchange rate gaps and curb volatility in the forex market.  

The statement was signed by the ABCON President, Alhaji Aminu Gwadabe on Thursday in Lagos.  

Gwadabe said there was an urgent need to enhance dollar liquidity in the market and ensure stability of prices in the economy.  

According to him, following this route will save the local currency and economy from the impact of election spending that has kept inflation at double digits for a very long time.  

The ABCON boss said that the depreciation of the naira against global currencies was due to pressure from rising dollar demand without sufficient liquidity to meet the demands from retail end users, manufacturers and other key players in the economy.  

“The naira has consistently come under serious pressures due to dollar scarcity making it difficult for forex end users, manufacturers and key industry players to access dollar needed to meet their needs.  

” Under my leadership, ABCON will continue to encourage our members to play the vital role of closing the exchange rate gaps in the market and reducing widening premium between the parallel market and the official window,” Gwadabe said.  

The ABCON boss called for the creation of BDCs’ Autonomous Foreign Exchange Trading Window (BAFEX) with determined maximum daily limit for legible BDCs to access dollars from banks, autonomous market and Diaspora forex window at the prevailing market prices.  

He urged regulatory authorities with oversight function on BDCs for the enhancement of existing BDCs’ automation portals to file transaction returns on CBN/ABCON/NFIU/NIBSS portals for effective regulatory monitoring and supervisions.  

Gwadabe also sought for the creation of an automation portal to encourage registration of undocumented and unlicensed operators for effective monitoring, identification and tracking of their transactions.  

He said the reluctance of the Central Bank of Nigeria (CBN) to open new windows through which foreign exchange can be attracted to the economy remains a key factor in the continued fall of the naira.  

He said that the lack of accent to BDCs demand that it be included in the remittance inflow channel to allow Nigerians in Diaspora remit funds to Nigeria through the BDCs under the CBN’s guidance has affected the volume of dollar inflows to the economy.  

According to him, the World Bank’s latest Migration and Development Brief showed that 630 billion dollars was attracted to low- and middle-income countries (LMICs) in 2021, with Sub-Saharan Africa attracting 49 billion dollars.  

He said Nigeria’s contribution to the remittances fund will rise when BDCs are allowed to receive funds into the economy.  

He said the officially recorded remittance flows to low- and middle-income countries are expected to increase by 4.2 per cent this year to reach 656.5 billion dollars and Nigeria should take immediate steps to be part of the booming remittance market, to boost dollar inflows and stabilise the naira.  

Gwadabe said the BDCs are to perform this role through contactless and digitized channels that make collections easy and seamless.  

He said there is urgent need to review the guidelines on BDC’s scope of operations to include participation in payment space, such as agency banking, Point of Sale (PoS) services, inbound and outbound forex transfers, ATM Forex services, to reflect global business model practice.  

He opined that the BDCs should be allowed to access dollars or Diaspora remittances through the autonomous forex windows like allowing operators to receive IMTOs proceeds, carrying out online dollar operations and Point of Sale (PoS) Agency, among others.  

Gwadabe said that now is the time to break the current industry monopoly that puts the remittances market in the hands of few players depriving others from tapping into the plan.  

The ABCON boss also called for the establishment of training institutes to enhance capacity and infrastructure in the industry and broadening players’ business scope with cash-back incentives for those that patronize BDCs while also implementing a less cumbersome and complex documentation requirements for end users.  

“The BDCs should be able to operate a network of digital solutions for Personal Travel Allowance, PTA, and Business Travel Allowance, BTA.  

“This would reduce overheads, and improve profitability. Some BDCs might still consider working closer with commercial banks.  

“ABCON can also be recognized as self-regulatory organisation to enable it operate effectively and sanction erring members,” Gwadabe said.  

Gwadabe said that ABCON resolved to align with the policy thrust of the apex bank and ensure that its members play their roles professionally and strategically in the interest of the market and economy.  

He said that de-marketing of BDCs by regulators and security agencies was not good for the stability of the market, rather the strength of over 4,500 operators can be harnessed to bring forex closer to the retail end users and strengthen liquidity in the market.  

He said that ABCON has developed multiple applications for BDCs’ transformation from being CBN cash dispensers to globally competitive entities with capacity to attract foreign capital flows to the economy.  

“We support any measures that would lead to compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).  

“We support CBN’s exchange rate stability policies and urge security agencies to punish any BDC operator breaching corporate governance and compliance guidelines.  

” It is our sincere believed that BDCs need to be integrated back officially to ensure their continuous potent role in exchange rate stability management,” Gwadabe said.  

The ABCON boss said that the recognition of the role of BDCs in Nigeria’s financial sector remains the first step to building a sustainable and viable forex market that is in tandem with international best practices.  

Gwadabe said that the Naira exchanged for N596 to a dollar at the parallel market, while it exchanged at N416 to a dollar at the official market, creating a rate gap of N175 to a dollar.