ADVERTISEMENT

BDCs to sack 30,000 workers, blames forex drought, CBN policy

Godwin Emefiele, CBN governor, had announced a new foreign exchange policy, part of which included the stoppage of weekly dollar sales to BDCs.

Governor Godwin Emefiele announces that Nigeria's central bank is keeping its benchmark interest rate on hold at 13 percent in Abuja, Nigeria, July 24, 2015.   REUTERS/Afolabi Sotunde

According to various media reports, Alhaji Aminu Gwadabe, president, Association of Bureau De Change Operators of Nigeria (ABCON), yesterday said that some 30,000 Bureaux De Change (BDC) workers would be sacked within the first quarter of this year.

Gwadabe stated that the move is a direct result of the continued loss of business by operators after the Central Bank of Nigeria’s (CBN) stoppage of weekly dollar sales to the body.

The ABCON boss listed workers to be affected as including directors, auditors, operations managers and compliance officers, as well as chief executives.

Godwin Emefiele, CBN governor, had announced a new foreign exchange policy, part of which included the stoppage of weekly dollar sales to BDCs.

ADVERTISEMENT

“Operators in this segment of the market would now need to source their foreign exchange from autonomous sources. They must however, note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws,” Emefiele said.

However, Gwadabe doesn’t agree with the CBN governor, saying: “As law abiding citizens and partners in progress with the CBN, we respect the decision of the apex bank as the regulator of the banking industry and foreign exchange market where we operate. While we are not totally surprised by the decision, we, however, believe there are better ways of addressing the challenges in the foreign exchange market.”

“Suffice to mention that before the CBN started selling dollars to BDCs in 2006, there were about 270 BDCs in the country. Despite the harsh operating environment, these operators were able to survive by servicing their clients. Secondly, the BDC industry was created by the CBN to fill a critical gap in the retail segment of the foreign exchange market. Furthermore, the decision to sell dollars to BDCs was in recognition of the role of BDCs to counter the effect of the illegal currency traffickers and the continued depreciation of the naira in the parallel market,” he said, expressing his regret that BDCs were always blamed whenever there was naira volatility.

“Thus, contrary to the impression created by the CBN, BDCs are not the problem of the foreign exchange market, rather they are solutions to deep rooted problems in the market namely activities of illegal foreign exchange operators and the wide gap between the official and parallel market exchange rates. And they have performed creditably well in these regards. While there are over 3000 licensed BDCs, how many of them does the CBN sell dollars to on a weekly basis?” he asked.

ADVERTISEMENT

“In the last one month, the CBN has been rationing dollar sales to BDCs, with less than half accessing the dollar windows.  The Governor should have stated how much dollars the CBN actually sold to BDCs on an annual basis rather than estimating how much is been sold. For example, in 2014, according to the quarterly economic reports of the CBN, the CBN sold $4.4 billion to BDCs while it sold $43.65 billion to banks through the Retail Dutch Auction. This reveals that out of the $48.09 billion sold by the CBN, less than 10 per cent was sold to BDCs,” Gwadabe added.

Gwadabe further stated that the decision of the CBN to stop dollar sales to BDCs has grave implications for the economy.

CBN Governor, Emefiele, had directed the CBN to stop selling dollars to BDCs as part of his efforts to stem the freefall of the Naira which has been trading averagely at about N305 to the dollar on the parallel market for the past few days.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Woman saves animal from the streets — then she finds out it is something else

Woman saves animal from the streets — then she finds out it is something else

Alake calls on Badaru to fish out illegal miners, violators of mining laws

Alake calls on Badaru to fish out illegal miners, violators of mining laws

Divers find bodies of 2 people who drowned after Baltimore bridge collapsed

Divers find bodies of 2 people who drowned after Baltimore bridge collapsed

INEC rejects LP's National convention in Anambra, questions venue change

INEC rejects LP's National convention in Anambra, questions venue change

8 people including professor declared wanted over killing of 17 soldiers

8 people including professor declared wanted over killing of 17 soldiers

INEC to publish credentials of 17 Edo governorship candidates on Saturday

INEC to publish credentials of 17 Edo governorship candidates on Saturday

Hardship: Abiodun to begin sale of rice to Ogun residents at 50% discount

Hardship: Abiodun to begin sale of rice to Ogun residents at 50% discount

Labour Party offers Peter Obi 2027 presidential ticket unopposed

Labour Party offers Peter Obi 2027 presidential ticket unopposed

Allow us build seaports, railways to develop the South-East - Ohanaeze tells FG

Allow us build seaports, railways to develop the South-East - Ohanaeze tells FG

Pulse Sports

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

Michelle Alozie: I had to do it because of African referees

Michelle Alozie: I had to do it because of African referees

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

ADVERTISEMENT
ADVERTISEMENT