CBN: NEW GUIDELINES FOR BDCS NOT TARGETED AT ANY ETHNIC GROUP

The Central Bank of Nigeria (CBN) has said the modifications to the guidelines on the regulation of bureaux de change (BDCs) are not targeted at any section of the country but aimed at conserving the nation’s foreign reserves and to strengthen its economy.
CBN Governor, Mr. Godwin Emefiele, during an interactive session with the House of Representatives Committee on Banking and Currency, explained that the modifications had to be made following observations that the current operations of BDCs in Nigeria had deviated from the objectives for which they were licensed.
His assurance came against the backdrop of insinuations that the policy, which jacked up the capital base requirements for BDC operators to N35 million, from N10 million, among others, was targeted at Northerners who are believed to be the major players in the sector.
According to him, the CBN observed that many operators were only interested in widening margins and profits from the foreign exchange market, regardless of prevailing official and interbank rates. He told the committee that a recent cross-country survey of BDCS carried out by the CBN revealed that 93 per cent of the operators violated the objectives and provisions of the guidelines.
Many of the BDCs, he added, could either not be located or had relocated without approval; majority of the operators had no good accounting records, while many had no adequate sales document and lacked audit trail.
He said: “It is alarming to note that between January and March alone, a whopping sum of $4 billion was expended on foreign exchange and by our calculation by December about $9 billion would been expended. We can’t continue like this; we have to halt the dangerous trend in the interest of the nation.
“We noticed that most of the letters of credit for importations are on sugar, tooth picks, fish, tomatoes paste, rice and other things we can easily produce in the country.
Nigeria is for all of us, this policy is not about me and you but it is for all. We need to conserve our foreign exchange for the nation’s development and not for the few for their selfish interest.”
Emefiele urged Nigerians and others to use the foreign exchange for legitimate transactions. “It is only in Nigeria that you will see someone travelling out of the country with a travelling bag containing $10 million; once he has declared the amount in line with the law of the land, nobody will ask questions about the source, the business he is doing and why he is not investing the money in the country,” he added.
He also the CBN would soon propose to the National Assembly stiffer laws on foreign exchange movement as part of measures to end abuse, adding that “the country should be worried how Nigerians are being arrested all over the world with huge sums of money over illegal money trafficking.”
He appealed to the House to support the policy of the CBN as the bank’s expectation is to have in place BDCs that are wellcapitalised, properly structured and can effectively perform their roles in the economy. On the requests by some members of the committee to give the operators some time before the enforcement of the new policy, Emefiele urged them to allow the time frame to stay.
“We will drain our foreign reserves if we allow that because right now several of the serious operators have complied, it is only in Nigeria that operators of BDCs are depending on the government to finance it,” he stated.
Earlier, Chairman of the House committee, Jones Chukwudi Onyeriri, had said they respected the autonomy of the CBN but would work with it to ensure that it delivered on its mandate in the overall interest of the nation.
Source: New Telegraph