TheCable

Aminu Gwadabe, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), says the Central Bank of Nigeria (CBN) poses “the biggest risk” to a BDC operator.

Gwadabe said depending on the central bank as an operator is a risky business move, hence, the need for BDCs to create innovative ways to reduce their dependence.

“The biggest risk for any BDC to take is to rely on CBN allocation. We cannot continue to rely on CBN allocation. That’s the biggest risk for BDCs,” he told TheCable on Wednesday.

“What we are doing, we are doing it for the country. If we know where the problem is, let us attack it.”

On ABCON’s plan to mitigate the apex bank’s influence on their supply sources, Gwadabe said the association has requested the CBN to allow their members to go digital or automate and mechanise their operation to increase their sources of foreign exchange.

Gwadabe held the opinion that exchanging money by hand is outdated.

He wondered why the apex bank illegalised online transactions for ABCON members and suggested that the BDCs can also offer both digital and offline forex trades.

During the interview, he said the migration will introduce the BDCs to new customers and enable them to enter strategic partnerships with financial technology (fintech) companies and international money transfer operators (IMTOs).

Gwadabe cited the deal between Flutterwave, Wema Bank, and Kadavra BDC, which is meant to improve FX availability.

The association president’s statement on reducing members’ reliance on the financial regulator comes almost a month after the CBN lifted the ban on forex sales to BDCs by banks.

The restriction had lasted for two years.

CBN had halted the weekly allocation of $20,000 to every ABCON member in July 2021, stating that the operators have abandoned the purpose of their establishment — which is to serve the retail market.

The BDC operators were also accused of giving shelter to persons or organisations looking to avoid the regulated financial system.

Despite the allegations against, the ban was suspended in August 2023.

Meanwhile, this is the second time that the CBN will restrict sales of forex to BDCs, having issued a ban in 2016.

Both restrictions were under the tenure of Godwin Emefiele, the suspended CBN governor.