BDCs push for market dominance after delivering N1trn turnover

NIGERIAN FOR EIGN EXCHANGE DEALERS under the aegis of the Association of Bureaux de Change Operators of Nigeria (ABCON) have set their sight on market dominance following the achievement of a N1 trillion mark in transaction turnover in one year.

Gathering for their annual meeting held virtually, Aminu Gwadabe, ABCON’s president, said the association members who are licenced by the Central Bank of Nigeria (CBN) have a clear mandate to set BDCs on a path of sustainable growth.

Gwadabe and other key industry stakeholders lauded the strength of CBN-licensed BDCs and their contributions to economic growth and exchange rate stability, forex liquidity and forex sale in the retail end of the market.

Presenting on the topic ‘BDCS Operations: A Trillion Naira subsector, Issues of Formalisation, Regulation and Way Forward’, Gwadabe said there is the urgent need to foster a better and positive image for the BDC sub-sector. He said the BDCs needed a positive and rewarding image different from what the naysayers have fed the public with.

“We need to tell everyone that ABCON members are different. The majority of BDCs are not criminals. We need respect from members of the public. With over 20,000 Nigerians employed by the sub-sector, there is a need to support the BDC business for sustained economic growth and employment generation,” he said.

At the virtual annual general meeting in Lagos, monitored by Business A.M., Gwadabe spoke extensively about the N1 trillion turnover milestone achieved by BDCs which he said reaffirms the sector’s prime position in the economy. He also listed the challenges facing the sub-sector, especially the low transaction margins on dollar sales, which continuously threaten the survival of BDCs businesses.

“Foreign currencies dealt in by BDCs are derived from private sources and such other sources which may include the CBN window as determined by the CBN from time to time for the purpose of funding Business Travel Allowance (BTA), Personal Travel Allowance (PTA), School Fees Payment abroad, Medicals, mortgage and subscription. There are also other autonomous sources such as Diaspora Remittances, walkin customers and bank sources,” he said.

Also present at the virtual event, Williams Kanya, division head, Department of Oil and Gas Research, CBN, said the apex bank acknowledges the support of BDCs under ABCON, adding that the bank has a key interest in ABCON operations.

“I am happy that BDCs and ABCON have become more professional. The ABCON team has an understanding beyond what they do and this makes CBN’s work easy. We are happy with what they are doing to keep the exchange rate stable and promote sustained economic growth. The CBN remains the biggest supplier of dollars to BDCs and has pumped enough liquidity to the sector,” Kanya said.

Mohammed Jiya, acting associate director, Nigerian Financial Intelligence Unit (NFIU), who also joined the meeting, said the agency needs the data from BDCs returns to know what is happening in the sector and make a decision that would favour the economy as he urged BDCs to always file their returns on time, and even where there are no transactions to report, they can file Nil report.

“The guideline clearly states that every BDC shall have an AML/CFT policy in compliance with AML/CFT Act 2011 for, amongst others, identification of customers using relevant means before carrying out a transaction or establishing a business relationship.

All licensed/registered BDCs operating in the country are expected to register on goAML and NIL Reporting Portal to enable them respectively render Statutory Returns (STRs, SARs, CTRs and AIF) or NIL Return when there is no report for a given period,” Jiya advised.

Speaking on the challenges members of the association are faced with, Gwadabe said the BDCs suffer from the low-level formalization of operations, whereby street traders are now competing for the forex market with CBNlicenced operators and further emphasizing that getting a BDC license costs around N40 million in Nigeria, when it costs only $5,000 to get the same license in Kenya. Yet, both the public and regulators have continued to castigate Nigerian BDCs.

Meanwhile, the ABCON president also reiterated the need to continue sensitizing its members on compliance with (CFT) guidelines, which include registering on NFIU portals and rendering returns. Compliance will be in the best interest of the operators, the association and the country’s financial system.