Forex-selling ‘mallams’ defy CBN, continue street trading

Foreign exchange trading by so-called “mallams” has continued in 2016, defying the orders of the Central Bank of Nigeria (CBN), which put an end to it.

In December 2015, the CBN issued a circular, declaring the street trading of dollars and other foreign currencies as no longer permissible.

The CBN, in the circular, did not outline how it will deal with hawkers but said from January 1, 2016, street trading of the dollar is “non-permissible” and will be severely punished by the bank.

“Similarly, it shall be a ground for the revocation of Licence should any street trader in foreign currencies be found to have any business relationship with a Licenced BDC,” the CBN said.

A visit to the forex-trading centres in Nigeria’s commercial capital, Lagos, revealed that the directives in the circular were far from being implemented.

At Alade Market, Allen Avenue, the mallams filled the streets, holding their calculators, and whispering prices to potential buyers.

In an interaction with TheCable, one of the mallams was willing to sell dollars at 258, and buy as low as 250, without bank verification number (BVN) against the directives of the CBN.

Same trend played at Yaba market, where mallams stood at the bus-stop to “waylay” anyone willing to buy or sell dollars.

While reviewing the guidelines for forex trading, the CBN raised the financial requirements for BDCs to N71.45 million, effective from January 1, 2016.

The circular, titled “Revised operational guidelines for bureaux de change in Nigeria”, prescribes that for a BDC to be considered valid in 2016, its must meet a financial requirement of depositing N71.45 million with the CBN.

“Minimum paid-up share capital of N35 million, non-refundable application fee of N100,000, non-refundable licensing fee of N1 million, mandatory caution deposit of N35 million, non-refundable annual licensing renewal fee (payable not later than30 days after the end of each calendar year) of N250,000 and non-refundable change of name fee of N100,000.”

It remains unclear how the CBN intends to enforce the requirements stated in the circular.