CBN, ABCON, others draw support for FX rule compliance

Attaining N1 trillion yearly market turnover by the Bureaux de Change (BDCs) has reinforced their relevance to the economic growth of the country. The President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, stated this at the yearly general meeting of the body.

Gwadabe, however, said it was too early to rest on their oars as there are more battles to conquer in the effort to position the market as a catalyst of economic development and wealth creation.

Speaking at the virtual event attended by industry stakeholders, Gwadabe said the journey to rescuing the market from speculators and achieving foreign exchange (FX) had just begun. He listed major steps taken by ABCON to ensure that all licensed BDCs comply with extant regulations, including a regular rendition of regulatory returns.

At the meeting attended by directors of the Central Bank of Nigeria (CBN), representatives of the Nigerian Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC) and other relevant agencies, Gwadabe spoke extensively about the N1 trillion turnover milestone achieved by BDCs which reaffirms the sector’s prime position in the economy. He also listed the challenges facing the sub-sector, especially the low transaction margins on dollar sales, which continuously threaten the survival of the business.

Gwadabe highlighted the urgent need to improve the image of BDCs. He said the BDCs needed a better reputation than the way many people view them.

“We need to tell everyone that ABCON members are different. The majority of BDCs are not criminals. We need respect from members of the public,” he stated.

He said with over 20,000 Nigerians employed by the sub-sector, there was a need to support the BDC business for sustained economic growth and employment generation.

Gwadabe who spoke on ‘BDCs operations: A trillion naira sub-sector, issues of formalisation, Regulation and Way Forward’ said foreign currencies traded by BDCs are sourced from private sources and such other sources including the CBN window “as determined by the CBN from time to time for funding business travel allowance (BTA), personal travel allowance (PTA), school fee payment, medicals, mortgage, and subscription”.

He said ABCON was training compliance officers to ensure they are acquainted with what is required of them, especially on a monthly rendition of results and tracking illicit capital flows through compliance.

According to Gwadabe, BDCs comply with the rendition of suspicious transactions reports as directed by the NFIU, CBN, and EFCC. He said BDCs are required to comply with all extant rules prescribed by the CBN

“In compliance with the provisions of Bank and Other Financial Institutions (BOFIA) as amended, every BDC renders returns to the CBN in prescribed format and within the deadline stipulated. The records of the BDCs are made readily available to the CBN examiners as and when requested, including carrying out customer due diligence, corporate governance and tax returns,” he said.

Gwadabe said that BDCs have achieved major success with the digitisation of their operations as players can now file their reports from their convenience without clustering at CBN’s offices.

He said ABCON digitized BDCs operations with the official launch and take-off of the ABCON Live Run Automation Portal in Lagos. The project, which has the backing of the CBN has replaced manual filling of regulatory reports, enhancing the global competitiveness of operators.

The portal is the final phase of automating all BDCs’ operations and integrating them with the operations of CBN, NFIU, and Nigeria Inter-Bank Settlement System (NIBSS) for improved compliance with regulation and seamless operations. ABCON is working with some consultants to transform naijabdcs.com and change it to MyBdc.com.

Gwadabe also called on the CBN to review the transaction margin for BDCs to enable operators to stay in business as the sector needs a profitable margin to sustain operations. He disclosed that the N2 per dollar margin currently earned by BDCs was insufficient to sustain business and that it discourages foreigners from investing in the sector.

He also called on the CBN to make BDCs pay agents of diaspora remittances. He suggested that the CBN should allow investors and diaspora remittance senders to freely interact with the BDCs bid and offer rates.

Despite the challenges facing ABCON, Gwadabe advised BDCs to continually comply with all extant rules.

In his presentation, a CBN Director, Williams Kanya, said the apex bank acknowledged the support of BDCs, adding that the apex bank had a key interest in ABCON operations.

Kanya said speculation remained a major concern, adding that CBN stands with ABCON in its effort to develop the market.

The Acting Associate Director, Nigerian Financial Intelligence Unit (NFIU), Mohammed Jiya, urged BDCs to file their returns on time and that they could file nil reports where there are no transactions.