By Peter Egwuatu, Assistant Business Editor
The achievement of N1 trillion annual market turnover by Nigerian Bureaux De Change (BDCs) has reinforced their prime role in the economy.
Not relenting on its successes, the Association of Bureaux De Change Operators of Nigeria (ABCON) held a zoom general meeting where regulators and industry stakeholders lauded the strength of BDCs and their contributions to economic growth and exchange rate stability.
Issues around regulatory compliance was discussed with ABCON President, Alhaji (Dr) Aminu Gwadabe listing major steps taken by ABCON Management to ensure that all licensed BDCs comply with extant regulations, including regular rendition of regulatory returns.
It was a gathering of champions with a clear mandate geared towards setting the Nigerian Bureaux de Change (BDCs) on a path of sustainable growth.
The Association of Bureaux De Change Operators of Nigeria (ABCON) Annual General Meeting on Zoom in Lagos on Wednesday was opportunity for ABCON President, Alhaji (Dr) Aminu Gwadabe to restate the prime role played by Central Bank of Nigeria (CBN)-licensed BDCs in promoting exchange rate stability, forex liquidity and forex sale to retail end of the market.
Gwadabe spoke extensively about the N1 trillion turnover milestone achieved by BDCs which reaffirms the sector’s prime position in the economy. He also listed the challenges facing the sub-sector, especially the low transaction margins on dollar sales, which continuously threaten the survival of BDCs businesses.
The meeting, which had the backing of CBN Governor, Godwin Emefiele was also attended by the apex bank directors, Representatives of Nigerian Financial Intelligence Unit (NFIU), Economic and Financial Crimes Commission (EFCC), Financial Action Task Force (FATF), DataPro CEO and over 550 top BDC directors, traders and other attendees nationwide.
ABCON boss Gwadabe further highlighted the urgent need to foster better and positive image for the BDC sub-sector. He said the BDCs needed a positive and rewarding image different from what the nay sayers have fed the public with.
“We need to tell everyone that ABCON members are different. Majority of BDCs are not criminals. We need respect from members of the public,” he stated.
He said with over 20,000 Nigerians employed by the sub-sector, there was need to support the BDC business for sustained economic growth and employment generation.
Gwadabe who spoke on the theme: “BDCS Operations: A Trillion Naira Sub Sector, Issues of Formalisation, Regulation & Way Forward” said foreign currencies dealt in by a BDCs are derived from private sources and such other sources which may include the CBN window as determined by the CBN from time to time for the purpose of funding Business Travel Allowance (BTA), Personal Travel Allowance (PTA), School Fees Payment abroad, Medicals, mortgage and subscription. There are also other autonomous sources such as Diaspora Remittances, walk in customers and bank sources.
He said ABCON is now training Compliance Officers to ensure they are acquainted with what is required of them, especially on monthly rendition of results and tracking illicit capital flows through compliance.
According to Gwadabe, BDCs are complying with the rendition of suspicious transactions reports as directed by NFIU, CBN, and EFCC.
“Directors of BDCs are being trained, and after training, whoever is found wanting will be recommended for sanctions,” he said.
He said BDCs are required to comply with all extant rules & regulations prescribed by the CBN, while the CBN closely supervises and monitors their operations.
“In compliance with the provisions of Bank and Other Financial Institutions (BOFIA) as amended, every BDC renders returns to the CBN in prescribed format and within the deadline stipulated by the CBN. The records of the BDCs are made readily available to the CBN examiners as and when requested including carrying out customer due diligence, corporate governance and tax returns,” he said.
He said that ABCON has over the years established itself as a key player in the BDC industry, and has also made several commitments and sacrifices to ensure that the sector continue to thrive despite all odds.
“The recognition of the role of BDCs in Nigeria financial sector remains the first step to building a sustainable and viable forex market that is comparable to what is obtainable in other developed economies. But getting the Nigerian BDC sector to where it is desired to be demands hard-work, quality leadership, regulatory foresight and sound government policies,” he said.
Digitization/ Transaction Margin Reviewing
Gwadabe said that BDCs have achieved major success with the digitization of their operations as operators can now file their reports from convenient point without clustering at CBN’s offices
He said ABCON digitized BDCs operations with the official launch and take off of the ABCON Live Run Automation Portal in Lagos. The project, which has the backing of the CBN ended decades of manual filling of regulatory reports by BDCs and enhanced global competitiveness of operators.
The portal, which is a game changer in the Nigerian BDC Industry, is the final phase of automating all BDCs’ operations and integrating them with the operations of CBN, NFIU and Nigeria Inter-Bank Settlement System (NIBSS) for improved compliance with regulation and seamless operations.
Making BDCs Payments Agents of Diaspora Remittances
ABCON President, Gwadabe also suggested to the CBN to make BDCs Diaspora Remittances Pay Agents.
He disclosed that the CBN introduced the Investors and Exporters (I &E) Window which allows foreign investors to freely bring their funds into the economy at a rate of their choice.
Regulatory Compliance A Must for BDCs
Despite these challenges, Gwadabe advised BDCs to continually comply with all extant rules & regulations prescribed by the CBN, as the regulator closely supervises and monitors their operations.
He said ABCON would continue to sensitize its member to comply with (CFT) guidelines which include registering on NFIU Portals and rendering returns. Compliance will be in the best interest for the Operators, the Association and the Country’s Financial System .
CBN, NFIU, NIBSS Speak
In his presentation, CBN Director, Williams Kanya, said said the apex bank acknowledges the support of BDCs under ABCON adding that the apex bank has key interest in ABCON operations.
He said: “I am happy that BDCs and ABCON have become more professional. The ABCON team has understanding beyond what they do and this makes CBN’s work easy. We are happy with what they are doing to keep the exchange rate stable and promote sustained economic growth. The CBN remains the biggest supplier of dollars to BDCs and has pumped enough liquidity to the sector”.
Continuing, Kanya said speculation remains big problem, adding that CBN stands with ABCON on balancing of rates. “Speculation will be bad business going forward as people will keep losing money. Also, we need rendition of returns from BDCs not to witch-hunt anyone, but to take decisions that will favor the economy with the data”.
Acting Associate Director, Nigerian Financial Intelligence Unit (NFIU), Mohammed Jiya, urged BDCs to always file their returns on time, and even where there are no transactions to report, they can file Nil report.
He said the agency needs the data from BDCs returns to know what is happening in the sector and take decision that would favor the economy.
“The guideline clearly states that every BDC shall have an AML/CFT policy in compliance with AML/CFT Act 2011 for, amongst others, identification of customers using relevant means before carrying out a transaction or establishing a business relationship,” he said.
He said Compliance Officers are to ensure that there is a compliance programme, prepare suspicious transaction report and render returns on same to the NFIU and where there are no such transactions, a “Nil Return” shall be rendered monthly.
“All Licensed/Registered BDCs operating in the country are expected to register on goAML and NIL Reporting Portal to enable them respectively render Statutory Returns (STRs, SARs, CTRs and AIF) or NIL Return when there is no report for a given period,” Jiya advised.