BDC operators want CBN to restrict non-oil exporters from accessing forex

The Association of Bureau De Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to restrict access to foreign exchange (FX) for non-oil exporters holding domiciliary accounts.

ABCON’s requests come amidst a series of recent CBN actions aimed at managing Nigeria’s foreign exchange market.

Earlier this week, the CBN prohibited the use of foreign currency as collateral for Naira loans and began selling USD to BDCs at a rate of N1,101 per dollar.

ABCON President Aminu Gwadabe claimed on Thursday that this move would increase dollar availability in the market and contribute to the growth of the country’s financial reserves.

Gwadabe expressed concerns that certain companies and manufacturers, despite having substantial dollar reserves from non-oil exports in their accounts, are acquiring foreign exchange from the official market to finance Naira loans.

“We therefore advise for the review of the guidelines on holding currencies on non-oil export accounts to a maximum of 48 hours, to borrow from the South African policy on the operations of non-oil exports domiciliary account proceeds,” Gwadabe said.

He proposed that “the CBN should also not make applicants of huge billions of dollars holding on their non-export oil proceeds Dom accounts eligible for FX requests at both the NAFEM and NAFEX window.”

The president further called upon CBN to upgrade its policies and circulars to legislation regarding the impending BDC’s new reforms.

This move, according to Gwadabe, would provide comfort and security for potential investors and allow existing stakeholders exclusive rights for mergers and acquisitions to meet the potential revised financial requirements.

He also requested a separation of ownership and operations between the FMDQ and its operators and pledged the continuous engagement of its members with the different stakeholders in the industry.

The Nigerian government is also reportedly eyeing the estimated $30 billion held in domiciliary accounts to improve forex market liquidity.

Finance Minister Wale Edun recently announced plans to issue local foreign currency-denominated bonds in the second quarter of 2024, aiming to attract domiciliary account holders with USD holdings.