The Association of Bureaux De Change Operators of Nigeria (ABCON) on Sunday defended the Central Bank of Nigeria’s (CBN’s) N305 to dollar exchange rate policy.
It said the decision has helped in stabilising the naira.
ABCON President Aminu Gwadabe explained that the N305/$ exchange rate is for settling government obligations and not a transactional rate as being speculated.
He faulted the petition against the CBN Governor Godwin Emefiele and the bank’s management team on the deployment of dual exchange rate regime in forex allocation.
The Senate Committee on Finance invited Emefiele to appear before it on February 7, 2020, following a petition by Human Rights Lawyer, J.U Ayogu, accusing the apex bank of compromise in the allocation of foreign exchange.
He said: “There is a case against the CBN governor and his management team written by J.U Ayogu. The petition which is before the Senate was laid on December 12, 2019, where J. U Ayogu, Esq, on behalf of the Bureaux De Change Operators of Nigeria wrote against the CBN over its dual exchange rate forex policy that enriches few Nigerians and its top management staff to the detriment of many lawful Nigerians.
“The move is frustrating the government policy of on eradicating poverty and unemployment from all the nooks and crannies of Nigeria,” Member, Senate Committee on Finance, Senator Ayo Akinyelure (PDP, Ondo Central) said.
The petitioner pleaded with the Senate to compel Emefiele to review the dual exchange rate policy without delay to keep BDC operators in business.
But ABCON management, said the CBN forex policy has brought stability to the BDC industry and helped operators to embrace automation which is the standard best practice globally.
Gwadabe said: “This is hand work of unknown faces not ABCON. It is confrontational and lack credible evidence. The N305/$ is not a transactional rate but for settling government obligations.
“ABCON submission to the National Assembly is on Value Added Tax (VAT) exemption and review of licence fee renewal downward submitted to the CBN. The petitioner was never at any time appointed to speak on behalf of BDCs.”
He said no BDC, or service provider, gets forex at N305 to dollar and that the petitioner’s claim is completely false.
Gwadabe said that ABCON has appointed Mike Akinfolarin & Associates as ABCON Consultant/ Tax Attorneys on VAT, which is a bigger problem confronting operators as a large part of their income go into paying taxes adding that in other economies, foreign exchange rate control by government is VAT exempt.
“That the law firm of Mike Akinfolarin &Associates (Tax Attorneys) made a representation on behalf of ABCON before the National Assembly public hearing, House Committee on Finance Bill on November 25, 2019 in Abuja. And that remains the position of ABCON.”
Gwadabe explained that beyond the rates differentials, Nigeria needs multiple streams of forex earnings and the enlisting of more channels to attract Diaspora remittances and other foreign capital that will not only deepen the market, keep the naira stable and boost operations of BDCs.
For instance, Diaspora remittances to Nigeria, which stood at $25 billion annually in 2018, remain a reliable source of forex to the domestic economy and should form part of the revenue stream for over 4,500 CBN -Licenced BDCs.
The ABCON spoke of the need to make BDCs one of the channels for receiving Diaspora remittances into the economy to create more income for operators adding that BDCs remain at the centre of economic development and have the capacity to attract needed capital for the development of the Nigerian economy.
He said: “Other great areas to focus for diversifying our foreign exchange earnings include promoting Diaspora remittances for economic buffer and foreign reserves accretion as seen in India and United Arab Emirates where migration remittances have lifted their economies.
“The ABCON Executive Council under my leadership will continue to promote improved capacity and technological advancement among BDC operators. We are also committed to better skills acquisition for BDC operators to elevate them to viable monetary regulatory partners and lead player in exchange rate stability.”
He commended the CBN management for its progressive policies and achieving stable exchange rate that aligns with its price stability mandate adding that with improved availability of foreign exchange, the exchange rate at the Investors’ & Exporters’ Forex window has remained stable for over two years at an average N360/$, and the parallel market exchange rate has appreciated from N530/$ in February 2017 to around N360/$.
Gwadabe said the CBN has been able to create a people-focused central bank promoting macro-economic objectives such as low inflation and a stable exchange rate, along with a focus on promoting inclusive growth and reducing unemployment in the country.