Forex sales to Bureaux de change

The plan by the Central Bank of Nigeria (CBN) to stop the sale of cash to Bureaux de change in the country is a step in the right direction. It will save our national currency, the Naira, from being undervalued against major foreign currencies in business transactions. But the job cannot be said to be holistic if the apex bank overlooks other realities that are also eroding the value of our currency.  CBN Governor, Sanusi Lamido Sanusi, dropped the hint to freeze the selling of cash to the Bureaux de change operators during his recent visit to Japan.

We share in the concern expressed by the CBN boss. Currently, Bureaux de change serve as money service outlets through which their customers exchange one form of foreign currency for another. But the CBN Governor argues that many of the operators have deviated from the original, noble objectives, and are now reportedly manipulating the system at the detriment of the economy.

According to Sanusi, the American dollar is gradually becoming Nigeria’s “second national currency”, a situation, he said, has become a source of great worry to both the CBN and even President Goodluck Jonathan. In the words of the CBN Governor, “70 percent of the dollars that people buy from Bureaux de change are not for transactions outside Nigeria”. He stated that evidence available to the apex bank shows that the operators of Bureaux de change are moving dollars from one part of the country to the other. In fact, one of the complaints of CBN against the operators of Bureaux de change was underscored by Sanusi when he noted that “in a briefcase, any bureau de change can carry 100,000 dollars, which is an equivalent of N50 million”.

Under the new plan envisaged by CBN, every transaction made by the Bureaux de change will be dutifully scrutinized and their accounts closely and accordingly credited. It is indeed regrettable that some Bureaux de change have taken undue advantage of the lapses in the system to cause some harm to the economy. It has therefore become necessary that the apex regulator should checkmate such excesses and infractions capable of undermining the stability of the economy and make our national currency look inferior to other currencies, especially the American dollar.

The planned policy measure will also check money laundering. Some Bureaux de change operators have been implicated as conduit pipes for money laundering abroad. Some have allegedly manipulated the variables to defraud their customers. A glaring case in point took place in Kano where a High Court presided over by Justice Dije Abdul Aboki convicted a bureaux de change operator for defrauding a customer of N76 milllion.

There are many other under-hand cases reported against some bureaux de change owners.To restore sanity to the system,it is proper that  CBN does  not gloss over these offences that amount to economic and financial crimes. Initiating tougher  policy measures that will rein in the saboteurs will aid the current reform aimed at stimulating economic growth. Coming on the heels of the apex bank’s recent decision to categorize the bureaux de change into two broad categories for easy monitoring, the policy will bring sanity and streamline the operation of the foreign exchange regime in the country.

We urge the apex bank not to keep its eyes off the ball of other seemingly obscure matters that are  undermining the value of our currency. Beyond that, it has been observed that in some privately- owned educational institutions and gift shops, particularly in Lagos and Abuja, payments are made in dollars. In that regard, CBN should put in place a policy that will halt this practice and punish offenders accordingly. It has become expedient to initiate this measure immediately because no economy can grow when such a practice is tolerated.

More importantly, in an economy such as ours which is vulnerable to international market transactions, constant vigilance is required. Failure to protect the value of the national currency will ultimately put the economy in danger. CBN should ensure that the operators of Bureaux de change  do not find a way around this policy and derail it.

The bottomline is: if the bureaux de change should continue to trade on forex, they must be run ethically and responsibly. CBN should update the rules and regulations governing their operations and perhaps set stiffer penalties for misdeeds. The penalties must be enforced.