Association of Bureaux De Change Operators of Nigeria (ABCON) has faulted the decision of the Central Bank of Nigeria (CBN) to make the biometric verification number mandatory requirement for foreign exchange transactions. Recall that the CBN on Wednesday issued a circular which stipulated the use of BVN for all foreign exchange transactions from November 1st, 2015.
The apex bank also said that it would discontinue the sale of foreign exchange to BDCs that fail to provide BVN of its directors by same date. In a statement issued on Friday, ABCON faulted the November 1st deadline, saying it is too close. It also said that making BVN mandatory for foreign exchange transactions, so soon, without adequate publicity, training and other measures, will enhance activities of the parallel market operators and widen that gap between the official exchange rate and the parallel market exchange rate.
According to the statement, “The return of the CBN directives on the use of BVN on sales of forex to BDC clients will lead to the following: Confusion and delay in the use of applicable HS Code for processing of ‘Form M’; Cancellation of foreign credit lines by correspondents banks; Increased mistrust between regulators and operators; Increasing misery level of majority of Nigerians already in a significant poverty level; Decline in public confidence in CBN’s ability to sustain its macroeconomic objectives; Set the pace for growing foreign interference in Nigeria’s monetary policies; loss of jobs; Increased fraud and other related financial crimes.
The Association noted that while it is not totally opposed to the use of the BVN for foreign transactions, it believes that the November 1st date is too early for such policy, in view of the preparations required for smooth implementation. Consequently, the Association among other things recommended some measures that would facilitate the introduction of BVN for foreign exchange transactions.
The Association stated, “The CBN should resume training of BDC operators for the use of the BVN platform, and there should massive sensitisation of the public on the new policy. The Association also recommended a CBN/ABCON taskforce to monitor compliance and eliminate non-compliant BDCs, adding this must be complimented with enhanced security surveillance at the airports and boarders.
The Association also called for harmonisation of the different operational guidelines by the CBN and the National Financial Intelligence Units (NFIU), as well as a review of the scope of BDC operations as defined by the CBN guidelines to reflect current market realities. Meanwhile, the Association has written to the CBN Governor, highlighting the various factors responsible for the sudden rise in the parallel market exchange rate from N212 to N224 per dollar within the last three weeks.
The Association stated, “The spiral hike in the black market rate from an average of 212/$ to 224/$ was as a result of the following: Activities of the illegal market operators; Openness of the Nigerian economy; Numerous and porous borders/airports; IMF/JP Morgan threat to our policy formulation; Huge patronage of the black market by blue chip companies; Increase protest by certain stakeholders/operator of the recent CBN policies; Obsolete and lack of policy linkages/harmonization of operational guidelines for operators by the various regulators; Lack of effective supervision and monitoring of the foreign exchange market by regulators”
