The Association of Bureau De Change Operators of Nigeria (ABCON) has urged the Central bank of Nigeria (CBN) to abolish procedures limiting access to the $20 billion inflow in the parallel foreign exchange market.
This comes after ABCON expressed frustration on the inflating import bill, demanding relevant agencies to provide a solution as it directly affects exchange rate fluctuation.
ABCON disclosed in its 2021 fourth quarter review that the Central Bank, halting the sale of forex to BDC’s has stimulated a period of revolutionary potential. The potentials includes the estimated $20 billion annual inflow in the unofficial forex market, which far exceeded the annual dollar cash sales to BDCs by CBN.
Furthermore, ABCON stated another potential for bureau de change operators is the market aperture resulting from the CBN halting forex funding to BDC’s. they further explained small and medium sized operator are experiencing draconian effects from the CBN’s action reiterating the difficulty in processing the form ‘M’.
Meanwhile, The Association of Bureau De Change Operators of Nigeria called on the federal government to analyze and solve problems associated with rising import bills which consequentially pressurizes naira exchange rate and national external reserve.
Words from ABCON “Data from Nigeria Bureau of Statistics, show that Nigeria’s import bill rose by 51.1 per cent year-on-year to N8.15 trillion in Q3 2021. For as long as imports are increasing without matching equivalents in exports or foreign exchange inflows, the currency must depreciate.
“By principle, a depreciated currency makes exports of a country cheaper in the international market thereby increasing inflow of foreign exchange but unfortunately for Nigeria the sectors where it has comparative advantage to excel is grossly traumatized by terrorism and insurgency due to lack of will power of government to control the situation,”
“The serious consequences of the continuous trade deficit, , is that, it has also affected the country’s balance of payment account, thereby causing more pressure on the exchange rate.”
“notably, the official exchange rate at the Investors and Exporters (I&E) window depreciated by 6.03 per cent to close the year at N435 per dollar while a 22.8 per cent depreciation was recorded at the parallel market to close at N565 per dollar.