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The Association of Bureaux De Change Operators of Nigeria (ABCON) has appealed to the Central Bank of Nigeria (CBN) to make Bureaux De Change (BDCs) payout agents for Diaspora remittances.
ABCON President, Alhaji Aminu Gwadabe, made the request in a statement obtained at the weekend. He urged the central bank to leverage on the over 5,000 licenced BDCs across the six geopolitical zones of Nigeria to get the greenback seamlessly to beneficiaries.
Gwadabe said the plan would help in providing a more convenient channel for Nigerians in the Diaspora to remit funds back to the country to boost economic development.
According to the ABCON boss, the annual remittance inflow of close to $25 billion was critical to Nigeria’s currency management and stability and should be given seamless flow to the economy.
Such funds, he added, would support Nigeria’s balance of payment position, reduce dependence on external borrowing and mitigate the impact of COVID-19 on foreign exchange inflows into the country.
He said the BDCs remain the largest foreign currency operators in Nigeria, hence making them payout agents for Diaspora remittances will protect the market from forex cartel that refuse to follow rules set by the apex bank.
He explained that such a move, would help in achieving market price equilibrium, give depth to the forex market, boost dollar liquidity in the market, enhance foreign reserves accretion and promote exchange rate stability.
Continuing, the ABCON boss said assigning such role to BDCs would enhance their operational capacity and sustainability while solidifying the defense of the naira against other currencies.
According to Gwadabe, the need to bring BDCs into the Diaspora remittances collection business has become exigent following reports of abuse by Mobile Money Operators (MMOs) opposed to paying remittances beneficiaries in dollars as mandated by the CBN.
On November 30th the CBN stated that beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) through the designated bank of their choice.
Gwadabe applauded the CBN’s directive, saying it would put an end to malpractices perpetually making the dollar scarce and keeping the local currency at the mercy of the greenback. He said the CBN directives have helped to usher in a naira rebound to N465/$ in the parallel market and should be upheld.
Analyzed data on IMTOs inflows into the country over the past year, and through investigations discovered that some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, which to a large extent resulted in a significant drop in flows into the country.
This encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining Nigeria’s Foreign Exchange management framework.
Gwadabe insisted that for Nigeria to get the full value of what is due to her in the remittance market, BDCs have to be included in the remittances payment channels and allowed to receive funds from Nigerians in Diaspora.
He listed the importance of migrant remittances to the economy to include serving as a lifeline for the recipient’s small household in the economy and used for health, nutrition, education and societal needs.
The remittances are also higher than both Foreign Direct Investment and foreign aids flow to the economy and still, are cheaper sources of funds.
The World Bank had predicted that inflow from Diaspora remittance will hit $21.7 billion this year, as against the $23.8 billion the country recorded in 2019.
The World Bank had hinged the drop in remittances from Nigerians living abroad on an account of the double whammy of the COVID-19 pandemic and the attendant economic crisis that has continued to spread.
It had stated: “Remittances are helping to address the impact on African households. Nigeria remains the largest recipient of remittances in the region and is the seventh largest recipient among LMICs, with projected remittances to decline to around $21.7 billion, a more than $2 billion drop compared with 2019.”
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