Bureau De Change (BDC) operators are openly disobeying the directive of the Central Bank of Nigeria (CBN) to sell dollars at not more than 2 percent margin above the buying price from Travelex.
BusinessDay can disclose that BDCs are actually fleecing Nigerians by selling at an average margin of about 22 percent.
The CBN had in an August 9, 2016 circular directed that foreign exchange cash purchased by BDCs from authorised dealers shall be sold to foreign exchange end users at a rate not exceeding two percent above the buying rate. BDCs purchase from Travelex foreign exchange accruing from the proceeds of international money transfer operators as approved by the CBN.
The retail end currency dealers receive weekly allocations of $15,000 at the rate of N385 from Travelex, a global currency dealer. They however, subsequently sell the same dollars at about N470 to end-users; well above the CBN mandated spread of 2 percent. Going by the CBN’s directive, at two percent margin, the BDCs should sell to end users at not more than N392.70k instead of the N470 at which they currently sell.
Instead of making an average of N7.50 per dollar sold, BDCs make as much as N85 per dollar sold, defeating the purpose of the CBN to keep the spread between the official and black market rates of the naira low. The BDCs are selling dollars at the same rate as is sold in the unregulated parallel market, disregarding the CBN’s directive of only a two percent margin.
Reacting to the development, Isaac Okorafor, acting director, corporate communication, CBN, said the apex bank would severely punish any BDC caught breaching the guidelines. He said the regulator was committed to its supervisory and monitoring functions.
Aminu Gwadabe, acting president, Association of Bureau De Change Operators of Nigeria (ABCON) who was aware of the development, told BusinessDay that the association was developing an online portal which will enable it check the excesses of members.
Gwadabe further disclosed that the association is facing a delay in getting certificate of no objection from the CBN. He noted that BDCs, as well as Travelex render returns to the CBN, which has resulted in the CBN on October 12, 2016, suspending the operating licences of 195 Bureau De Change Operators (BDCs) for not rendering returns.
Gwadabe had earlier said it would be “illegal” for the BDCs to sell at a dollar above the CBN mandated margin. He threatened to sanction and even withdraw the licence of any member who violates the order. The non-compliance to the the CBN margins has heightened foreign exchange demand pressure on Travelex, which is the only authorised foreign exchange dealer that sells dollars close to the CBN mandated rate. A visit to Travelex locations at the Lagos airport showed long queues of passengers waiting to buy their Business Travel and Personal Travel Allowances.
Travelex sells to only passengers that have a valid international passport, valid visa to destination, Bank Verification Number (BVN) card, airline boarding pass, and a signed copy of transaction declaration to be collected from Travelex counter. For BTA, the requirements are a letter of introduction from the company, original certificate of incorporation or registration. Travelex also hands over purchased dollars at the boarding gate, after security and immigration checks.
Connect via email