Forex crisis: Center charges CBN to reveal BDC beneficial owners

The Center for Fiscal Transparency and Integrity Watch (CFTIW) on Saturday raised the alarm over the free fall of the naira and its adverse effects on Nigerians and the economy.

The Central Bank of Nigeria (CBN) has issued regulations to mitigate the forex crisis, the recent being a circular directing the “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.”

In a press release by Head of Public Relations, Victor Agi, the CFTIW urged the apex bank to spotlight the operations of Bureau De Change (BDC), particularly requesting the publication of the beneficial owners of all licensed BDCs.

The anti-corruption body said this was necessary given the opacity that surrounds BDC operations, lending credence to the speculation about potential for exploitation and manipulation within the sector which continue to weaken the naira in the free market.

“Currently, there are no adequate data on BDC operations to understand trends and how they affect the foreign exchange market. The discrepancies between BDC buying and selling rates also raise questions about fair pricing practices and the potential for exploitative arbitrage,” the statement reads.

“Additionally, it is unclear if BDCs operators comply with Anti-Money Laundering (AML) regulations as provided for in the Money Laundering (Prohibition) Act 2022, which mandates robust Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures for BDCs.

“Concerns exist that some operators may not be fully compliant, creating vulnerabilities to money laundering, market manipulations and other financial crimes.

“It is on this note that we demand the public reporting of all licensed BDC transactions, including volumes, buying and selling rates. This will promote market transparency to address arbitrage trading.”

The CFTIW further charged the CBN to strengthen the enforcement of AML regulations by conducting thorough audits and inspections of BDC operators to ensure adherence to KYC and CDD requirements, and impose swift and severe penalties for non-compliance.

“We believe that these measures will foster trust and confidence in the market, strengthen the naira, attract foreign investment and may reveal that the forex crisis was not driven by genuine needs such as importation and legal foreign transactions but by pecuniary motives,” the statement added.