ABCON calls for increased dollar sells margin

ASSOCIATION of Bureaux De Change  Operators of Nigeria (ABCON) have called on the  Central Bank of Nigeria (CBN) to increase the margin allowed for BDCs on foreign exchange transactions.

Making this appeal last week at a webinar organised by the association, ABCON President, Aminu Gwadabe, said the N2 margin per dollar presently allowed by the apex bank is grossly inadequate in view of the huge operating cost of BDCs.

Titled,  ‘Resumption of Foreign Currency Sales to BDCS; COVID-19 challenges, Compliance and Way forward’, the webinar was organised to sensitise BDC operators on the processes put in place by the CBN and ABCON to ensure seamless dollar purchase by members of the public through BDCs.

Citing the example of other countries where BDCs enjoy up  to six per cent margin per dollar, Gwadabe stressed that even the N2 per dollar allowed by the CBN is not up to the three per cent margin previously allowed  by the apex bank at the commencement dollar sale scheme”.

He said: “The challenge that we are facing is the smaller margin. Right now, the parallel market is doing about N430 and our pegged rate is N386 to the dollar. So, we still see a gap between the advised exchange rate of N386 by the CBN and what is obtainable presently in the market. We are asking the CBN to please look at this and review it for us.”

Gwadabe also urged the CBN to allow for the use of virtual documentation which he said would help in curbing the spread of the Covid-19 pandemic.”

Gwadabe stated that in addition to  low margin, other challenges confronting BDCs include  limited scope of operation, rigorous documentation, and the penalties levied on erring operators.

Stressing that  the ABCON have always supported  sanctioning of erring members, Gwadabe said there is need for the apex bank to review some of the penalties given the severe impact of COVID-19 on the operations of BDCs.

While ensuring the CBN of the continued cooperation of ABCON in ensuring stable exchange rate and compliance with regulatory requirements by BDCs, Gwadabe commended the apex bank for the resumption of dollar sales to BDCs.

On the other hand, the ABCON President charged BDC operators to reciprocate  the gesture of the CBN by ensuring strict compliance with all regulatory requirements. He charged BDC operators to avoid any transaction not within the scope allowed by the apex bank so as to avoid sanctions.

 

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