The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, has said the unorthodox foreign exchange policy of the Central Bank of Nigeria has adversely impacted on the naira stability across all markets, and created huge premium between official and parallel market rates.
According to a statement, Gwadabe explained that with the official market rate now at N430/$ and parallel market rate now at N730/$, a huge rate gape of N300/$ now existed in the markets.
He said the selling of forex earnings at a fixed rate of N430/$ while open market rate was N730/$ was unorthodox practice that lacked credibility and transparency.
“That singular act encourages rent seeking, currency substitution that continues to hurt real sector operators and the overall economy,” he said.
He recalled that when the apex bank decided to suspend sales of forex to Bureau De Change in July 2021, the open market rate was about N501/$.
Over a year after, he said, the naira to the dollar had depreciated significantly, with a lot of Nigerians not meeting their invisible transactions needs and the regulator not showing much commitment to meeting those needs.
Gwadabe, said the small retail exchange institutions, the BDCs, remained at the centre of CBN’s exchange rate policies implementation, hence the need for the regulator and public to continuously support BDCs’ roles in exchange rate stability.
This, he added could be achieved through increased automation of their processes and providing more channels of transactions for sustainable price equilibrium while eradicating rent seeking, currency substitution and speculation.
“I am very confident that Nigeria will in not too distant future appreciate a stable exchange rate and availability of forex in the local economy as the right people for government policies’ implementation get such responsibility,” he stated.
According to him, the CBN Governor, Godwin Emefiele had tried to introduce many policies beyond conventional money supply that were not in line with market realities.
Gwadabe cited the Naira-4-Dollar scheme of N5 bonus for every $1 diaspora remittances as well as the N65 rebate for every dollar of non-oil export proceeds and other incentives as commendable, but required total overhaul with stakeholders’ engagement.