Economy
No BDC Operator Gets Forex at N305/$—ABCON
By Adedapo Adesanya
The Association of Bureau de Change Operators of Nigeria (ABCON) has said that none of its members gets foreign exchange (forex) at rates lower than the standard market price put in place by the Central Bank of Nigeria (CBN).
This was disclosed by president of ABCON, Mr Aminu Gwadabe, in a statement issued by the group to comment on a petition written against the CBN by a lawyer. The legal practitioner, Barrister J.U. Agoyu, had claimed that the apex bank was running a dual exchange rate allocation regime.
But defending Governor of the CBN, Mr Godwin Emefiele, the ABCON boss said the policy on foreign exchange allocation to Bureau de Change (BDC) had helped stabilized the Naira against the dollar.
Mr Gwadabe said Mr Agoyu’s petition to the Senate Committee on Finance was uncalled for, saying the accusation against the CBN governor and its management team of compromise in the allocation of foreign exchange was false.
The petitioner had pleaded with the Senate to compel Mr Emefiele to review the policy of dual exchange rate without delay to keep BDC operators in business.
During one of the sessions at the National Assembly, a member of the committee, Senator Ayo Akinyelure, had said, “There is a case against the CBN governor and his management team written by Bar. J.U Ayogu. A petition before the Senate laid on December 12, 2019 where Bar. J. U Ayogu, Esq, on behalf of the Bureaux De Change Operators of Nigeria wrote against the CBN over its dual exchange rate forex policy that enriches a few Nigerians and its top management staff to the detriment of many lawful Nigerians and frustrating the policy of the present administration of eradicating poverty and unemployment from all the nooks and crannies of Nigeria.”
But Mr Gwadabe, disclaiming the N305/$ rate to BDCs as claimed by the petitioner, clarified that it was not the transactional rate used in the market but used in settling government obligations.
“This is the hand work of unknown faces not ABCON. It is confrontational and lack credible evidence. The N305/$ is not a transactional rate but for settling government obligations.
“ABCON submission to the National Assembly is on Value Added Tax (VAT) exemption and review of licence fee renewal downward submitted to the CBN.
“The petitioner was never at any time appointed to speak on behalf of the BDCs,” Mr Gwadabe said.
He said that no BDC or service provider gets forex at N305 to the dollar and that the petitioner’s claim was completely false, stressing that the CBN forex policy has brought stability to the BDC sector and helped operators to embrace automation which is the standard practice globally.
Mr Gwadabe further explained that beyond the rate differentials, Nigeria needs multiple streams of forex earnings and the enlisting of more channels to attract Diaspora remittances and other foreign capital that will not only deepen the market, keep the Naira stable and boost operations of BDCs.
He said that Diaspora remittances to Nigeria, which stood at $25 billion annually in 2018, remains a reliable source of forex to the domestic economy and should form part of the revenue stream for the over 4,500 CBN-licenced BDCs.
The ABCON boss noted that there was need to make BDCs one of the channels for receiving Diaspora remittances into the economy to create more income for operators, stressing that BDCs remain at the centre of economic development and have the capacity to attract needed capital for the growth of the Nigerian economy.
“Other great areas to focus in diversifying our foreign exchange earnings include promoting Diaspora remittances for economic buffer and foreign reserves accretion as seen in India and United Arab Emirates (UAE) where migration remittances have lifted their economies.
“The ABCON Executive Council under my leadership will continue to promote improved capacity and technological advancement among BDC operators. We are also committed to better skills acquisition for BDC operators to elevate them to viable monetary regulatory partners and lead players in exchange rate stability,” Mr Gwadabe added.
He further commended the CBN management for its progressive policies and for achieving stable exchange rate that aligned with its price stability mandate, noting that with improved availability of foreign exchange, the exchange rate at the Investors’ and Exporters’ Forex window has remained stable for over two years at an average N360/$, and the parallel market exchange rate has appreciated from N530/$ in February 2017 to around N360/$.
Mr Gwadabe said the CBN has been able to create a people-focused central bank promoting macro-economic objectives such as low inflation and a stable exchange rate, along with a focus on promoting inclusive growth and reducing unemployment in the country.
Meanwhile, the leader of BDC operators in Nigeria said ABCON has appointed Mike Akinfolarin & Associates as its consultant/tax Attorneys on VAT, which is a bigger problem confronting the operators as a large part of their income go into paying taxes, adding that in other economies, foreign exchange rate control by government is VAT exempt.
“The law firm of Mike Akinfolarin &Associates (tax attorneys) made a representation on behalf of ABCON before the National Assembly public hearing – the House Committee on Finance Bill – on November 25, 2019 in Abuja. And that remains the position of ABCON,” he said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
