“No Profit in Selling”: BDC Operators Open Up on Alleged Shut Down as EFCC Raids

“No Profit in Selling”: BDC Operators Open Up on Alleged Shut Down as EFCC Raids

  • Bureau de Change Operators have denied that they shut down operations in Abuja over naira depreciation
  • The association said its members are law-abiding and are guided by the sector's regulatory guidelines
  • According to an operator, the choice to close for a few hours was based on instruction from the union

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The Association of Bureau de Change Operators of Nigeria (ABCON) has spoken on Abuja Bureau de Change operators' alleged shutdown of forex operations.

bdc operators
ABCON President said the sector’s regulatory guidelines guide CBN-licenced BDCs. Photo Credit: BDC, Lyubomyr Vorona
Source: Getty Images

Legit.ng earlier reported that BDC operators in Abuja announced the closure of their business premises indefinitely on Thursday, February 1, 2024.

Information on shutdown is incorrect

In a statement, Dr Aminu Gwadabe, ABCON President, said the information on the shutdown of forex operations by Abuja BDCs was incorrect and never emanated from the national body or zonal offices of ABCON.

Read also

"We have a solution": ABCON makes new proposal to CBN to save naira from further depreciation

PAY ATTENTION: Share your outstanding story with our editors! Please reach us through info@corp.legit.ng!

Gwadabe said:

“We hope this letter finds you well. We are writing to provide clarification and dispel any misconceptions regarding recent rumours of a shutdown of forex transactions in Abuja. Contrary to these unfounded reports, we want to assure you and the public that this information is not from our central body or the zonal council”.

Gwadabe said that the sector's regulatory guidelines guide CBN-licenced BDCs.

He said:

“As professional and licensed BDC operators guided by the Central Bank of Nigeria regulation. We urge our members to be law abiding in the day-to-day activities in the financial markets, including foreign exchange activities and continue to operate smoothly and without interruption because no directive has been given by our Association.”

He said addressing the misinformation was necessary to avoid panic and confusion among the public, businesses, and investors.

Read also

Full list of CBN departments to be moved from Abuja to Lagos as 1,500 staff resumes on Friday

According to Gwadabe, the organisation will keep talking with the appropriate authorities about the direction the FX market should go.

Why activities were delayed

An operator explained that trading activities were delayed because members were getting impatient with how quickly the official exchange matched their rate.

He added that the BDC union instructed its members to close shop on Thursday, fearing they would run out of business.

Mallam Ibrahim at Wuse Zone 4 told The Nation that the union chose out of frustration when they realised they couldn't match the official rate.

Ibrahim stated:

“The official rate has fallen so much that it’s almost the same as what we offer here. There’s no profit in selling dollars anymore.”

EFCC arrests buyers and sellers

The Nation reported that the shops were only closed for a few hours as agents of the Economic and Financial Crimes Commission (EFCC) swept through Wuse Zone 4 to apprehend Forex vendors and purchasers.

Read also

FCT: Agitated Wike rolls out fresh directives to area council chairmen amid rising insecurity

The raid followed the resumption of trading by BDC operators.

It was discovered that although it seemed like no one was using the streets surrounding the Forex market, business was nonetheless being conducted behind closed doors.

Traders confirmed that they operated from within the banking halls and their offices.

Gap between markets getting narrower

Due to several economic circumstances, the gap between the currency rates has narrowed, drastically decreasing the potential profit margin for black market operators and making their operations less profitable.

The merchants' closure may significantly impact the foreign exchange market in Nigeria. Many Nigerians still have limited access to official FX channels, but the black market has always provided an alternate source—albeit at a cost.

For those who depend on these unofficial channels, both individuals and enterprises, their abrupt closure may present difficulties.

The event, meanwhile, can also be interpreted as supportive of the CBN's recent attempts to calm the foreign exchange market.

Read also

EFCC agrees with BDCs to spoil black market rate as one dollar sells for over N1,400

The official market appears to be receiving more trust, which could decrease the need for alternative channels as the difference between rates on the official and black markets closes.

ABCON makes new proposal to CBN to save Naira

Legit.ng reported that Gwadebe had called on the CBN to harness the strengths and extensive network of BDC operators in a strategic effort to enhance the stability of the Nigerian naira.

Gwadebe said due to the nation's substantial forex challenges, allowing BDCs to play a more active role in the economy could be instrumental in addressing these challenges.

According to reports from Punch, Gwadebe also highlighted the significance of recognising and leveraging the unique network of BDC operators.

Source: Legit.ng

Online view pixel