By Cynthia Alo
The Association of Bureaux De Change Operators of Nigeria (ABCON) is pushing for mergers in the Bureaux De Change (BDC) sector, rather than recapitalization.
The group said the recommendation is to effectively help its corporate governance and rules of engagements with the Central Bank of Nigeria, CBN.
The merger option was adopted for class ‘A’ BDCs in 2007/2008, which entitled them to $1 million weekly allocation with N500 million capital base.
The group called for similar business model through mergers and consolidation rather than outright review of capital base of each operator.
ABCON President, Alhaji Aminu Gwadabe, who disclosed this in Lagos yesterday, said the group never asked for upward review of N35 million mandatory regulatory approved capital base for each BDC, but a merger of at least 10 BDCs to form new capital of N350 million.
The move, he said, would enhance the scope of operation and diversification of sources through various window and reduce regulatory pressures.
He said merger of multiple BDCs into a stronger entity will prepare them for higher role in the financial system, including handling of diaspora remittances or other offshore funds attracted to the economy to deepen forex access at the retail end of the market.
He stated: “ABCON rejects reports calling for BDCs recapitalisation by a section of the media. The media quoted us out of context and we are working to put a proper narratives”.
Continuing, he said the BDCs is seeking multiple mergers within the industry to present a reduced number of operators for more effective regulation.
Related News
- Naira appreciates at I & E window
- CBN, banks working to clear backlogs of forex within 2 weeks – Acting gov, Shonubi
- FG targets domiciliary accounts, Diaspora Nigerians’ funds
“Instead of allowing each BDC to be recapitalised to the amount proposed by the Economic Advisory Committee which will likely lead to the extinction of many of our members as it happened in 2014 when an outright review of capital base was the only option”.
He added, “We also advised that the CBN should not issue any license during the period to avoid venture capitalist taking over the business from the already skillful operators.
He said with over 40,000 Nigerians employed by the sub-sector, there was need to support the BDC business for sustained economic growth and employment generation.
Gwadabe 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, personal home remittances and subscription.
According to Gwadabe, BDCs are complying with the rendition of suspicious transactions reports as directed by NFIU, CBN, and EFCC.(VANGUARD)
