By 
Bureau De Change Operators (BDCs) in Nigeria have joined the Acting Governor of the Central Bank of Nigeria (CBN) in acknowledging the diversion of most transfers conducted by International Money Transfer Operators (IMTOs). This diversion, often untracked, has contributed to the instability of the naira against the dollar and the overall struggle to manage the foreign exchange market.
The CBN’s Acting Governor, Folashodun Shonubi, cited the diversion of diaspora remittances to unofficial markets, including the parallel market, as a key factor behind the recent crash of the naira against the dollar. This coincided with the naira hitting a record low against the dollar at the parallel market.
Shonubi noted that a considerable portion of diaspora remittances arrives in Nigeria in dollars and goes undocumented, ultimately ending up in the parallel market.
Aminu Gwadebe, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), revealed that a substantial amount of these remittances are diverted to unofficial markets, including unlicensed online firms. Gwadebe emphasized that this issue isn’t confined to the parallel market; many unlicensed online entities are also involved.
Addressing the accusations that some BDCs are complicit in illegal activities, Gwadebe acknowledged that certain BDCs do receive diaspora remittances but fail to report them officially. He stressed that the CBN is taking steps to address this, including introducing changes to how BDCs submit their returns to the Central Bank.
Concerning the diversions to fintechs and various online channels, Gwadebe highlighted the borderless nature of these platforms, operating across different jurisdictions and lacking standardized regulations. He mentioned platforms like Binance, which operate internationally and often at rates higher than those in the parallel market.
Gwadebe recommended stiffer measures for such market players while creating a conducive environment for licensed players. He stressed the need for competition and transparency to deepen the market.
In response to these challenges, the CBN has introduced a new operational framework for the BDC segment. This shift aims to enhance the efficiency and transparency of the Nigerian Foreign Exchange Market, with a permissible range for the spread on buying and selling by BDC operators. Furthermore, mandatory financial reporting by BDC operators has been introduced to ensure accountability.
Comments