By Chinwendu Obienyi
To ensure consistent improvement in local production and diversification of the economy away from oil, the Association of Bureaux De Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to fashion out ways of liberalising the foreign exchange (FX) and expanding dollar receipt points via Bureaux de Change Operators (BDCs).
This was even as it noted that given Nigeria’s huge population and diaspora, there is a need to deepen dollar inflows to the economy.
Its President, Aminu Gwadabe, stated this during a recent forum in Lagos recently. While calling for improved local production and diversification of the economy from oil, Gwadabe decried that despite foreign exchange interventions by the CBN, Naira volatility is being compounded by rising inflation, interest rate hike and slow economic growth with consequences for middle and low-income earners.
He said that already, global growth is expected to slump from 5.7 per cent in 2021 to 2.9 per cent in 2022— significantly lower than 4.1 per cent predicted by the International Monetary Fund (IMF) in January. According to him, dollar bids continue to rise, the BDCs have the capacity to attract needed capital for the development of the Nigerian economy and deepening of the forex market.
“These occurrences are eroding the purchasing power of households. The biggest driver of inflation is the stubborn rise in food inflation. The average price level of the food basket rose by 1.13 per cent to 19.50 per cent in May from 18.37 per cent in April. This can be reversed by increased support for agriculture and government policies that support the sector”, he said. The ABCON boss believes the success of BDCs will be boosted by access to multiple streams of forex earnings to deepen the market, keep the naira stable and boost BDCs operations.
“Making BDCs one of the channels through which over $20 billion annual Diaspora remittances enter the economy will give depth to the forex market and boost BDCs operations. Nigerian BDCs operators have also identified with the immense opportunities presented by Diaspora remittances and want to play a greater role in attracting more foreign capital into the economy. Remittances are known to help poorer recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses, service debt and essentially, drive economic growth,” Gwadabe said.