‘N2 profit margin not enough to sustain operations’ — BDCs ask CBN to review FX rate

The Association of Bureau de Change Operators of Nigeria (ABCON) says the N2 profit margin that comes with exchanging the naira at N386 to the dollar is not enough to sustain their operations.

Speaking at a webinar themed ‘Resumption of foreign currency sales to BDCs, COVID-19, challenges, compliance and way forward’, Aminu Gwadabe, the association’s president, urged the Central Bank of Nigeria (CBN) to review the margin.

The CBN has announced that it would sell dollars to BDCs at N384/$ and BDCs must not sell to end-users at more than N386/$.

Gwadabe said other clients charge as high as 10 percent margin.

“The challenge that we are facing is the smaller margin. Right now, the parallel market is doing about N430 and our pegged rate is N386 to the dollar,” he said.

“So, we still see a gap between the advised exchange rate of N386 by the CBN and what is obtainable presently in the market.”

The president also warned members not to sell foreign exchange to unauthorised buyers to avoid sanctions on the body.

“You cannot sell dollars to someone that is importing goods in whatever form as a BDC, you are only authorized to sell to a traveller, sell for payment of school fees, medicals and mortgage,” he said.

“Anything outside this is a serious infraction and can be meted with penalties.”

Gwadabe advised members not to indulge in bulk payments saying the CBN now has robust and innovative technologies to monitor, supervise and track their financial dealings.

“I want to discuss the procedures in the new resumption, they are not new, but due to Covid-19, and as an institution, we must observe some certain measures that are being laid down by the government.

“Ordinary financial transactions or funding transactions for disbursement will start this Friday, September 4, in four zones.

“We have Lagos, Abuja, Kano and Awka zones; these are our four service providers; and in Port Harcourt, the Travelex Retail Nigeria are back, they are the ones to disburse foreign currency to our members in the zone.

“So, we are happy to announce to CBN that our waiting areas are ready and we are engaging the payment service providers in all the five payment services areas to ensure we have a smooth operation.”

Gwadabe said as part of readiness to resume operations, the association had introduced COVID-19 preventive measures like wash-hand basins, hand sanitizers and face masks.