Massive Sacking Looms As BDCs Lament Forex Shortage

As the Central Bank of Nigeria has suspended its $20,000 weekly intervention to Bureau de Change operators, some dealers who solely rely on the CBN intervention to survive have been hit by massive sack as some may wind up.

Nigeria’s apex bank in late July announced its decision to suspend its weekly intervention in the unofficial market run by the BDCs.

The Central Bank Governor, Godwin Emefiele had accused the BDCs of facilitating money laundering and round-tripping.

Now banks have the exclusive rights to get interventions from the CBN to meet the country’s dollar needs.

This is not the first time the bank has made similar decision.

In January 2016, the regulator suspended the sale of forex to BDC operators which skyrocketed the exchange rate between the naira and dollar to as worst as N494 per dollar in December of that year from N268 per dollar held in January.

The recent move by the apex lender stems from the persistent devaluation of the naira at the official market which traded above N500/dollar before the suspension of the weekly $20,000 dollar intervention.

“Business has ended. I have told my staff to stop work and focus on other business. I will make sure I pay him for the month of August,” a dealer at the popular Zone 4 market in Abuja who pleaded anonymity told THE WHISTLER.

The failure of the black-market operators may not be unconnected with the rigors of getting the dollar from the Central Bank.

The CBN required the operators to sell their dollar for N395 which is a N2 margin from the N393 sold to them by CBN. But BDCs are required to sell exclusively to travelers.

“Where will you see the travelers. We have to start sourcing for documents of travelers and pay their owners N15,000 just so we can sell our dollar to people who need them for other transactions,” he added.

The rigors in meeting up with CBN’s requirement adds a lot to the cost resulting in selling the dollar higher than the stipulated rate of N395 directed by the CBN, said the dealer.

Alh Shehu Jega, a forex expert and a dealer at Bani Mbaka Bureau De Change in Zone 4, Abuja told THE WHISTLER that “Whenever they want to say that the system is messed up, they point at Bureau de Change. It is the BDCs that are doing money laundering, it is the BDCs that inflate the rates.”

He added, “It stops nothing as long as we are licensed to provide services to the general public, we will continue to provide the services and sources of foreign exchange are many,” the dealer with several large client said.

He explained that the BDCs that would be worst hit are those that rely on the CBN weekly intervention to trade.

According to him, massive job losses loom on the part of operators that he described as “not practitioners.”

He said, “They only came into the system because the CBN gives money. If CBN stops giving money today, they are nowhere, because they cannot resist the pressure of the market like we do.

“Those are the kind of people that will be directly be affected. Infact, they are lost. They will go back to where they come from. But to us for the real operators, the only policy that will affect us is when the CBN says no more forex trade.”

The Chief Executive Officer of 1 in Town BDC, Muhammed Lawal, said many operators outside zone 4 were already losing their jobs.

“Most of our operators that are not in the market now have lost their jobs,” said Lawal.

He explained that operators outside Zone 4 rely on the CBN intervention to survive.

“People like to go to markets with population so that they can get several alternatives,” he added.

With the ban, operators even in zone 4 could spend a week without getting $20,000, according to him.

“We are not getting enough and the demand for dollars is high in the market that is affecting dollar price,” he said.