Financial analysts have lauded the proposed operational guidelines set forth by the Central Bank of Nigeria (CBN) for Bureau de Change (BDCs), foreseeing a restoration of order in the country’s parallel market operations and a crackdown on illicit financial activities,Daily Trust reports.
Their appraisal stems from the unveiling of the draft guidelines, which mandate sellers of $10,000 and above to BDCs to disclose the origins of the foreign exchange involved. Additionally, recipients of Basic Travel Allowance (BTA) or Personal Travel Allowance (PTA) are to receive only up to 25 percent of their foreign currency in cash, with the remainder electronically transferred to their Nigerian domiciliary accounts or prepaid cards.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprises (CPPE), hailed these measures as a positive stride towards rectifying malpractices within the BDC sector, essential for maintaining stability in the forex market. He emphasized the significance of BDCs in catering to retail demand while underscoring the need for transparency to mitigate speculative activities.
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Expressing agreement, financial expert Paul Alaje, of SPM Professionals, welcomed the initiative but expressed concerns regarding the execution, particularly by banks. He stressed the importance of stringent supervision to ensure compliance with the CBN’s directives, referencing recent raids by the Economic and Financial Crimes Commission (EFCC) on banks as indicative of the broader efforts to deter speculative practices.
Professor Uche Uwaleke, a prominent economist and president of the Association of Capital Markets Academics of Nigeria (ACMAN), echoed the sentiment, highlighting the regulations’ potential to curb money laundering and frivolous forex demands. He emphasized the need for electronic transactions and documentation to thwart illicit financial activities.
President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, welcomed the draft regulations, noting their potential to eradicate unlicensed operators and enhance sectoral compliance. He assured stakeholders of the BDCs’ readiness to cooperate with the CBN, emphasizing the importance of collaborative efforts to strengthen the sector and ensure regulatory adherence.
In summary, stakeholders anticipate that the proposed guidelines will foster transparency, reduce speculative activities, and bolster compliance within the BDC sector, ultimately contributing to a more stable forex market environment in Nigeria.
