In a significant policy shift, the Central Bank of Nigeria (CBN) has announced the suspension of foreign exchange (FX) sales to Bureau De Change (BDC) operators across the country. The decision was unveiled by Godwin Emefiele, the governor of the central bank, during the conclusion of the monetary policy committee meeting held in Abuja on Tuesday.
Governor Emefiele revealed that the CBN receives a staggering influx of approximately 5,000 BDC registration applications each month. He highlighted that these operators have veered away from their intended role, instead contributing to the dollarization of Nigeria’s economy. Emefiele expressed concerns over their transformation into conduits for illicit financial flows, partnering with corrupt entities to facilitate money laundering within Nigeria.
“The BDC operators have deviated from their original mission,” Emefiele emphasized. “They have transitioned into agents that exacerbate graft and corruption within the nation. The existing malpractices within the BDC market cannot be tolerated any longer.”
The governor further disclosed the alarming pattern of multiple BDCs being owned by the same entities, enabling these promoters to secure multiple foreign exchange allocations from the central bank. Emefiele underscored that some international organizations and embassies are complicit in utilizing illegal forex dealers via BDCs to finance their operations, perpetuating the irregularities.
With an unyielding resolve to address these concerns, Emefiele asserted that Nigerian banks engaged in transactions with illicit BDCs would face severe consequences. Additionally, foreign organizations found to patronize these illegal practices will be reported and held accountable. The governor affirmed that the CBN would redirect its weekly allotments of dollar sales towards commercial banks to cater to legitimate FX demands. Moreover, he mandated that banks extend forex sales to all customers, ensuring a more equitable distribution of foreign exchange resources.
This policy shift comes at a pivotal juncture for Nigeria’s financial landscape. The move to suspend foreign exchange sales to BDCs underscores the CBN’s commitment to curbing illicit financial activities and rectifying the industry’s shortcomings. The CBN’s proactive approach aims to foster a more transparent and accountable foreign exchange ecosystem, ultimately contributing to the country’s economic stability and growth.
As Nigeria adapts to this transformative policy change, the impact on currency markets, financial institutions, and stakeholders across the nation will undoubtedly be closely monitored. The CBN’s decisive action reflects its determination to reshape the financial landscape and address the challenges posed by misused BDC practices.
