The coalition of Council Ethnic Youth Leaders, African Centre for Justice and Human Rights and other Civil Society Organizations have backed the decision of the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele to stop the sale of dollars to Bureau De Change (BDC) operators.
It noted that while the operators had risen from a mere 74 BDCs in 2005 to 2,786 BDCs in 2016 and about 5500 today, the CBN has received close to 150 new applications for BDC licenses every month.
Meliga Godwin who stated this on behalf of the coalition, Monday, in Abuja noted that the Apex Bank accused the BDC operators of illegal and illegitimate transactions warranting the decision.
Godwin said: “These operators were making excessive profits from the allocations they get weekly from the CBN and this was to the detriment of the people, moreover, they have turned themselves to agents that facilitate graft and corruption in Nigeria and the CBN would not be expected to tolerate this.
“It would interest you to know that a few owners registered and promoted multiple BDCs not because they needed expansion of their businesses, but because they took benefit of the weekly $20, 000 which the bank allocated to each of the registered BDCs hence these operators accessed the allocation through multiple companies and used same to aid and launder money.”
The Coalition stated that the ban on sale of Dollars to the BDCs was necessitated by their alleged unwholesome practices, adding that the operators have gone beyond their primary role of being retail dealers of FX to wholesale dealers.
He continued “It is because of these illicit businesses that BDCs had risen from a mere 74 BDCs in 2005 to 2,786 BDCs in 2016 and about 5500 today.
“In addition, the CBN receives close to 150 new applications for BDC licenses every month. This increase in operators are only interested in wider margins and profits from the forex market regardless of prevailing rates in the market.”
“BDCs have turned themselves away from their objectives. They are now agents that facilitate graft and corruption in the country. The country cannot continue with the bad practices that are happening at the BDC market. BDCs are originally created to take care of retail needs of the ordinary Nigerians who need maximum of about $5000. Now we see BDCs dealing in single transactions worth millions. This is not their function.
“It is indeed wrong for them to have such unregulated financial transactions. Money launderers, looters of our common patrimony and terrorism financiers have access to Forex and can carry out their illicit businesses”.
The Coalition further noted that people who ordinarily are not supposed to have access to Forex, now have unregulated, undocumented access, adding that the wider negative national security and economic impact of this can only be better imagined than experienced.
“With this new policy in place, the media and indeed the public should note that once a customer provides basic documentation to purchase FX, all banks must immediately meet that on demand or within a stipulated timeframe sell foreign exchange to the customer.
“This meets the basic requirements for documentation and regulation. It also makes Forex readily available to those who readily need it and out of reach for those who do not have genuine need for same.
“Nigeria until today was the only country in the world where the Central Bank sell Forex directly to BDCs. Is it not even strange that we waited this long before we joined the rest of the world? Should this bold step not be generally applauded rather than condemned?” the Coalition asked.