How we get forex, by BDCs - The Nation Newspaper
To stay afloat in business after the Central Bank of Nigeria (CBN) terminated the supply of foreign currencies to them, Bureaux De Change (BDC) operators have intensified private sourcing of foreign exchange (forex).
The operators said the stoppage of dollar sales to them by the CBN will have minimal effect on their business because they get more dollars from their customers than the supply from the apex bank.
According to CBN Governor Godwin Emefiele, the apex bank was selling $20,000 to over 5,500 BDCs per week.
He said: “This amount translates to about $110 million per week and about $5.72 billion per year. This is a scarce resource. The CBN and the government cannot continue to allow this unwholesome practice continue in Nigeria”.
The BDC operators in Lagos and Abuja claim they are not bothered about the step taken by the apex bank’s decision (stopping dollar sales to them).
According to them, they buy more dollars from their customers than they normally do from CBN.
Two of the operators – Nura and Abubakar Moshood – who operate from Abuja and Lagos, respectively, said: “We get dollars from customers more than what CBN give to us. You know that Nigerians have dollars at home, in their accounts, everywhere. We buy dollars from customers and sell to those who want it.”
Moshood said BDCs buy dollars from travellers, international oil companies and government officials that have access to estacodes. He said BDC operators with high net-worth can attract between $2,000 and $10,000 daily from travellers who normally do not exchange their money in banks because of rate disparities.
He said: “We always have many walk-in-customers bringing dollars. There are many Nigerians that earn dollars, especially professionals who carry out services for foreign companies. We also have Nigerians working for foreign companies whose salaries are in dollars. They always approach us to change their dollars into naira.
“There are also many people with domiciliary accounts who also come to us to change money when they have need for naira,” saying “we give them higher value than the banks. Only a few people change their money in banks and will always get less for their dollars compared to what they get when they approach BDCs.”
A visit by our reporter to Wuse Zone 4, the hub of parallel forex trading in Abuja, showed that forex trading was ongoing, indicating ‘business as usual.’
Operators were seen hailing passers-by to come exchange their currency like they did before the CBN decision.
Another Abuja-based trader, who simply identified himself as Ibrahim, corroborated Nura. He confirmed that operators have a steady source of forex from customers.
“So far, the decision to stop the sale of forex has had little or no effect on our ability to trade in foreign currency,” Ibrahim said.
The traders yesterday told this newspaper yesterday that they were buying a dollar for N500 and selling at N507 indicating that the price of the greenback is gradually declining against the local currency.
The CBN stopped the weekly sale of forex to BDCs operators on July 27, accusing them of dollarising the economy.
It ordered Deposit Money Banks (DMBs) to henceforth sell forex directly to customers with legitimate demand for foreign exchange.
To ensure that the banks do not short-change the process, the CBN has put in place a monitoring mechanism to guarantee the seamless sale of foreign exchange to customers who support their requests for foreign exchange with relevant documentation.
It was the unhindered access to forex by the BDCs that led to rumours that the CBN was going after forex in domiciliary accounts of bank customers.
The claim has been denied by the apex bank which on Monday said that “those making such allegations were criminal speculators whose intention was to create panic in the foreign exchange market”.
The apex bank stated that at no time did it “ever suggest or imply that it would tinker with the foreign exchange deposits of customers.”