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Banks Are Formalising Black Market Operations, BDC Chief Says, Laments Exclusion

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The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said banks are now formalising the black market.

Gwadabe stated that while banks are formalising parallel market operations, the Bureau De Change remain excluded from the Investors’ and Exporters’ (I&E) window. 

According to the head of the BDC group, the I&E window is supposed to run on three legs; the banks, the Central Bank of Nigeria (CBN) and the BDCs.

‘’The volatility of the naira continues to underpin the slow economic growth of Nigeria. The I&E window is laudable, it’s patriotic and nationalistic, but there is no policy that can actualize its mission without carrying the interest of the subsector (which is the BDCs). 

“The I&E window is supposed to run on three legs, the banks, the CBN and the BDCs, overtly or covertly, the BDCs are missing,” he said in a report by Nairametrics on Wednesday. 

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Complaining about the exclusion, Gwadabe said the official foreign exchange market, which is the I&E window, is not competitive due to the presence of few players. 

In his own words, Gwadabe noted: “The forex market is not competitive because of the limited number of participants. The other one is the issue of liquidity and then legislation with respect to the FMDQ. The legislation is expected to allow participants, including the BDCs, to be part of the forex market. 

We are talking about sustainability now and that market (forex market) will drive sustainability in terms of inflow to address liquidity issues. Fortunately or unfortunately, the banks are even now formalizing Bureau De Change or do I say parallel market operations.” 

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Despite their exclusion and the unification of the multiple foreign exchange rates in the official market, Gbadabe said the impact of the decisions have had little impact on the operations of the BDC. 

He disclosed that the parallel market continues to serve persons or businesses in need of forex but can’t obtain them in the official window.

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