Bureau De Change (BDC) operators in Nigeria have said that the value of Naira has continued to depreciate in the parallel market because of the scarcity of forex in the sector as major sources become drastically reduced.
This was disclosed by the Chairman of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe.
Gwadabe said sources of forex to that segment of the forex market have been severely impacted by the recent policies of the Central Bank of Nigeria.
He averred that members of the Association no longer get as much forex from relevant sources such as exports and external remittances and now rely on irregular intervention from the apex bank.
Blaming the International Money Transfer Operators (IMTOs), Gwadabe said the liberalisation of the market has prevented supply inflow which is being reduced and has made it difficult for BDCs.
According to him, IMT0s have ambushed the international remittance payment as most remittance payment now go their direction.
He added that non-oil exports, which is another source of FX for BDCs have also been reduced and the CBN intervention is not regular.
In the past, he noted that BDCs used to do up to $40k weekly but now, it is not more than $20k.
Gwadabe declared that the Naira will continue to depreciate in the parallel market except there is regular intervention by the CBN.
Describing the BDCs as the language of the invisible players in the retail end of the market, he stated that any sentiment of scarcity by buyers as well as sellers would affect the value of the Naira.
Recall that the Naira fell to N1,700/$ in the parallel market in September, its lowest in seven months but recovered marginally on the 2nd of October. However, the official market section saw a wide depreciation of up to 8%.
The CBN in the past one year has sought to regulate the IMTOs and enable them to play a more prominent role in attracting foreign exchange into official channels from international sources.
In 2023, Nigeria received around $19.5 billion- around 35% of total remittances to Africa according to the World Bank.
However, Taiwo Oyedele, the Chairman of the Presidential Committee on fiscal policy and tax reforms stated that only about 10% of the nearly $20 billion remittance entered the official forex exchange market as the parallel market swallowed up almost 90% of remittance inflows.
