ABCON: BDCs as Channel for Diaspora Remittances Would Ease NairaVolatility
The Association of Bureaux De Change Operators of Nigeria (ABCON), has urged the Central Bank of Nigeria (CBN) to allow Bureau de Change (BDCs) receive diaspora remittances so as to ease naira volatility.
President of ABCON, Aminu Gwadabe who stated this in a chat with newsmen in Lagos said Naira volatility despite foreign exchange interventions by the CBN is being compounded by rising inflation, interest rate hike, and slow economic growth with consequences for middle- and low-income earners.
He said: “Making BDCs one of the channels through which over $20 billion annual Diaspora remittances enter the economy will give depth to forex market and boost BDCs operations. Nigerian BDCs operators have also identified with the immense opportunities presented by Diaspora remittances and want to play greater role in attracting more foreign capital into the economy. Reason being that remittances are known to help poorer recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses, service debt and essentially, drive economic growth.”
Gwadabe said globally, BDCs remain one of the channels through which the Diaspora remittance funds come into countries.
BDCs, he said, remain at the centre of economic development and have the capacity to attract needed capital for the development of the Nigerian economy and deepening of forex market.
Gwadabe applauded the RT200 FX Programme, which aims to raise $200 billion in FX Repatriation to Nigeria.
Gwadabe said the RT200 FX Programme is one of the strategies that can help Nigeria earn more stable and sustainable inflows of foreign exchange.
He said although the CBN recently demonstrated greater commitment to combat inflation by raising the Monetary Policy Rate (MPR) by 150 basis points to 13 per cent per annum, the strengthening of the economy through local production will reverse negative trends in the economy.
He explained that as inflation rate remains higher than interest rates, returns on investment will drop and foreign capital inflows will fall leading to sluggish economic growth.
Gwadabe said that other advanced economies, including the United States are also fighting inflation with interest rate hike.
Gwadabe urged the CBN to liberalize the foreign exchange market, ensure paradigms shift from demand to supply measures, support SMEs infrastructure /joint venture finance, promote skills awareness for operators, ensure more collaborations among stakeholders and make industry-friendly policies for the good of the economy.