BDCs seek FOREX rate convergence

The Association of Bureaux De Change Operators of Nigeria (ABCON) has called for an emergency meeting of its members to discuss critical issues in the foreign exchange (forex) market. Top on the agenda is the convergence of Bureau De Change (BDC) rate with banks rate as well as need to discourage prevalence of unregistered forex operators from trading in the market. Also, to be discussed is the rising bank charges associated with BDCs transactions. The meeting, which holds in Lagos on Wednesday, is expected to be attended by over 3,500 Central Bank of Nigeria (CBN)-licenced BDCs and members of ABCON.

President of ABCON, Alhaji Aminu Gwadabe, who disclosed this Tuesday, said negative margins being experienced by BDCs, review of annual licence renewal in view of the number of the BDCs, and approval of additional forex disbursement centres in Port Harcourt, Maiduguri, Benin, Ibadan, among others, would also be discussed at the meeting.

According to the ABCON boss, to be discussed also are Company Income Tax (CIT) and Value Added Tax (VAT) payment by BDCs, ABCON members statutory payments which include CBN Licence Renewal Fees and Annual Subscription Fees as well as late disbursements of forex at various centres. He disclosed the challenges faced by BDCs were enormous, saying many forex users now prefer to buy their Business Travel Allowances (BTA), Personal Travel Allowances (PTAs), medical bills and school fees payment abroad through the banks instead of BDCs following the convergence of naira/dollar rates at parallel market and BDCs. He said the attractive rate at the parallel market segment has triggered a massive influx of demand from forex users running away from the mandatory regulatory documentations sought by BDCs. He said the BDCs were at a disadvantage, as forex users shunned them for the parallel market where they could buy without documentation. Gwadabe said the challenges faced by BDCs, if not checked, would trigger a liquidity crisis that may derail the ongoing recovery of the naira against the dollar.

(ThisDay)