BDC Operators Beg CBN for CoT, VAT-free Transactions

By Dipo Olowookere

President of the Association of Bureau De Change Operators of Nigeria (ABCON), Mr Aminu Gwadabe, has appealed to Central Bank of Nigeria (CBN) to allow bank transactions carried out by his members be free of Value Added Tax (VAT) and Commission on Turnover (COT) charges.

According to him, these charges as well as abnormal bank charges and multiple exchange rates are parts of the challenges facing members of the group.

Also, Mr Gwadabe said the apex bank should harmonise the rate it sells Dollar to the BDC operators and commercial banks.

According to the ABCON boss, the BDCs buy Dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N362/$1 while the CBN sells to commercial banks at N358/$1 and the banks sell to end users at N360/$1.

He said if the rate was harmonised by the central bank, it would boost the ongoing recovery of the Naira against the Dollar.

“We want the CBN to review BDC rate to align with that of the banks since both sectors serve the same customers.

“We also want the CBN to grant ABCON proposed trading platforms approval in principle. This will give ABCON and its technology partners the boost needed to kick-start the project.

“We also appeal to the CBN to issue Letter of Consent to our proposed training institute. This is going to be a boost to the current ABCON management’s commitment to capacity building of its members which boosts competency in the sector.

“Equally, we want the apex bank to make BDC transactions VAT and COT exempt, reduce BDCs’ licence renewal payments and also expand beyond scope of transactions,” Mr Gwadabe at the launching of the association’s website, www.naijabdcs.com, in Lagos.

The online platform is a live rate engine room created by the ABCON to promote transparency and price discovery in the foreign exchange (forex) market.

It is meant to keep users of foreign exchange and other stakeholders up-to-date on current buying and selling rates in the market.

Commenting on the new website, Mr Gwadabe explained that the platform will provide buying and selling rates across different cities and also average national rate for the country.

According to him, “As we all are aware, ABCON has for years been an active group in the financial services sector, concentrating more on the Bureaux de Change (BDC) segment of the market and ensuring that global best practices are followed in the operations of BDCs.”