FG Demands CBN To Reduce Currency Exchange Operators In Nigeria

Special Adviser to the Nigeria President on Economic Affairs, Tope Kolade Fasua, urged the Central Bank of Nigeria to make changes in the number of currency exchange operators in the country.

Currency Exchange operators, also known as Bureau De Change (BDC), are more than 5,000 in Nigeria and Fasua noted that the country is unable to handle these many operators.

Speaking at an economic policy event organized by the Abuja Chamber of Commerce and Industry under the theme of "Unification of foreign exchange and the effect of fuel subsidy removal on the business community" on Monday, the special adviser urged to have a maximum of 200 operators in the country.

"We need to do some structural reforms. For example, I believe we should reform the BDCs' sector, and make them stronger. You can't manage over 5,000 BDCs selling money on the streets, it is not normal," he pointed out, Punch reported.

He further explained that if Nigeria does "the structural reforms in the BDCs sector and the banks and supervise them well, the CBN with the reserves that we have can incentivize that sector, allowing people to get the money much quicker."

"And you have to define the illegal market and by then, we will be able to find stability," he continued. We cannot manage 5,000 BDCs, maybe we should be looking at 100 or 200."

The special adviser gave the example of countries like the United Kingdom and the United Arab Emirates which have only 145 and 130 BDCs, respectively.

The official shared that the government will never be able to supervise the current number of BDCs, adding that there is not enough staff to look at the returns and check regularly.

He added, "Therefore, you need large and well-established BDCs, as well as banks, to be able to fulfill the needs of the people. And then the government can be able to incentivize that market."

During the event, he also spoke about the term "scarcity of forex" and questioned, "What is scarcity of forex, as if the world owes us any forex? The world does not owe us any forex. The forex you get depends on the trade that you do."

He explained that looking at Nigeria's import and export profile, there are over 20 items imported in Nigeria that are in the billions of dollar range.

"Our biggest import, of course, till today, except maybe Dangote kicks in, is fuel including petrol, diesel, etc., which takes about $25bn to $30bn every year," he said. "Then we have things like cars, which is about $4bn every year; sugar, about $1bn; fish, $1bn; milk, $1bn; wheat, $4bn; chemicals, $3bn; pharmaceuticals, $2bn; and I could continue to reel it down for you."