Bureau De Change Operators Groan Under CBN’s Forex Policy

One month after the Central Bank of Nigeria (CBN) announced discontinuation of foreign exchange allocation to Bureau De Change firms, operators and traders in the parallel market have bemoaned the implications of the policy on their businesses and livelihood.

Our correspondents who visited some of the parallel markets in Abuja, Kano and Lagos report a bleak atmosphere as traders loiter about due to the drop in the volume of transactions in the markets.

The president of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe told Daily Trust that the decision to discontinue forex sales to BDC operators, by the CBN, has led to the loss of over 40,000 jobs in the economy.

The CBN decided to discontinue the supply of foreign exchange to Bureau De Change operators (BDCs) in its attempt to clamp down on illegal activities allegedly being perpetrated by some BDC operators.

The CBN Governor, Godwin Emefiele, while announcing the ban said there was evidence of prevailing ownership of several BDCs by the same promoters to procure multiple FX from the central bank.

The apex bank was allocating $20,000 weekly to each BDC operator in the country. With 5,500 BDC operators in the country, the figure translated to an annual allocation of $5.72 billion to the parallel side of the foreign exchange market.

Speaking to Daily Trust, in a post mortem of the CBN action, Gwadabe said: “The impacts of the CBN action include direct job losses of about 40,000 employees and over N200b capital to go toxic.”

Listing further implications of the policy, Gwadabe said the decision paved the way for “Dominance of un-official online and ‘Hawala’ activities. Dearth of BDCs expertise developed over the years, increased volatility and confidence crises of the naira, security concerns and increase in prices of goods and services.

“In all the BDCs remained the potent tool for CBN exchange rate stability instruments and accessibility.”

 BDC operators lament

A bureau de change operator in Ikeja, Lagos, popularly known as Alhaji, appealed to the government to consider the forex business as their source of livelihood having fled the northern region due to insecurity.

“I have farmland I inherited from my father in Niger State but nobody can go there again because of the incessant insecurity. Government should please have mercy on us,” he said.

When our correspondent visited the BDCs around Wuse, Zone 4 in Abuja, one of the BDC operators who gave his name as Ismaila said sometimes he gets up to $5,000 allocation from his bank. He added that in a week, sometimes, he gets up to $15,000 to trade with.

But some other operators told different stories. They said they hardly get forex from the banks except for BTA and PTA.

According to them, most of their supplies now come from the walk-in customers and from other sources that have access to forex.

One Abdullahi Kabir said he buys from other markets. He, however, declined to mention their sources.

Checks by our correspondent from other independent sources said the BDCs get supplies from some manufacturers who sell products abroad and some exporters.

He also said a lot of supplies come from individuals, especially those in government offices with access to travel estacode and other dollar incentives from their offices.

On the job losses, another operator, who identified himself as Nura, said the BDCs that did not depend so much on the CBN allocation have not sacked their staff but those who rely heavily on the CBN allocations have been greatly impacted by the new decision.

However, he agreed that the volume of trade has dropped.

One of the hangers-on who prospect clients for a commission from the BDCs said some of his colleagues no longer come to the market.

He said some of them have moved on to other trades in Abuja whilst some have even gone back to their states to seek for other sources of livelihoods.

When our reporter visited the ever-busy Wapa Bureau De Change Market in Kano, most of the traders were seen sitting down and having a chat, while most of the major streets leading to the market were not as busy as they used to be before the CBN’s new policy.

The market is said to house more than 1,000 BDCs, with each having many staff and other indirect dependents who are now mostly rendered jobless courtesy of the new policy.

Speaking to Daily Trust, a forex trader in the market, Aminu Shuaibu Malan said since the new policy took effect, about 3,000 people are already at the risk of losing their jobs.

“In each shop in this market, you can get close to 20 people, but now, since this policy started, all we do is just to sit down for the whole day without almost getting anything. Small and medium traders are even the worst hit. Some of them will have to beg before going home every day.

“Dollar is the soul of this market; before, we used to get it from CBN twice every week (on Tuesdays and Thursdays) and all importers rely on it from this market, and this is exactly why its price is yet to stabilise and prices of goods keep hiking on daily basis.

“I can confidently tell you that before this policy, a US Dollar used to be N503, now it is around N527. There was even a time it reached N540. So how does this policy help our economy,” Malan asked.

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