Peter Obi condemns crackdown on BDC operators, says Tinubu’s government lacks ‘rational economic thinking’

Labour Party presidential candidate in the 2023 elections, Peter Obi, has criticized the recent attacks on Bureau de Change (BDCs) operators in various urban centres across Nigeria by government agencies.

The former Governor of Anambra State said the move is ill-advised and misdirected, warning that such actions will escalate and worsen the country’s exchange rate situation.

Recall that recently the operatives of the Economic and Financial Crimes Commission (EFCC) raided some Bureau De Change outlets especially in Lagos, Abuja, Ibadan and Kano. They also arrested several operators during the raid 

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The raid was a result of the continuous depreciation of Nigeria’s naira against the dollar.

In a post on X, Obi emphasized that BDCs are not the primary suppliers of foreign exchange (forex), nor do they create demand.

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According to Obi, the key to strengthening the currency lies in transitioning Nigeria from a consumption-focused economy to a production-oriented one, especially in export-led production.

Additionally, he underscored the need to combat corruption, saying it allows unproductive money to compete for the available supply of foreign currency.

He said; ”The recent reported attacks and disruption of the business activities of Bureaux de Change (BDCs) operators in different urban centers across the country by Government Agencies, are ill-advised and wrongly directed.

”Rather than solve the problem, the action will further escalate and worsen the exchange rate situation in the country. The BDCs are not the primary suppliers of forex nor do they create demand. They only provide a market to sellers and buyers of foreign currency.

”They are part and parcel of every economy and can be found even in the developed economies of the world. To think that the BDCs are the cause of the declining value of the Naira is a smack on rational economic thinking.

”The only way to shore up the value of our currency is to move the country from consumption to production, especially export-led production, and fight corruption, which allows unproductive money to pursue the available supply of foreign currency.

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”As long as Nigeria remains an unproductive economy and corruption continues unfettered with people in possession of unproductive excess cash, the value of our currency will continue to depreciate.

”It’s important, therefore, that government authorities properly understand the workings of a modern economy and channel their efforts accordingly.”

Meanwhile, the Central Bank of Nigeria (CBN) has said sellers of Foreign Exchange of $10,000 and above to Bureau De Change (BDC) operators must declare the source of the forex.
The apex bank stated this on Friday in a revised regulatory framework to curtail excesses of BDCs and check uncertainty in the forex market.

It also mandated the sellers to comply with all the Anti-Money Laundering/Combating the Financing of Terrorism ( AML/CFT) regulations and foreign exchange laws and regulations.

Also, the CBN said customers can move foreign currencies from their domiciliary accounts with Nigerian banks to BDCs.

It said: “All digital/transfer purchases of foreign currencies shall be credited to the BDC’s Nigerian domiciliary account.

“Payments for all digital/transfer purchases of foreign currency by a BDC shall be by transfer to the customer’s Naira account. If the customer is non-resident (whether Nigerian or not), a BDC may issue the customer a prepaid NGN card.”

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The financial regulator said BDCs can source foreign currencies from tourists, returnees from the diaspora, and expatriates with foreign exchange inflows from work, travel, investment or their domiciliary accounts.

Other allowable sources mentioned by CBN are residents with foreign exchange inflows from work, travel, investment or their domiciliary accounts, and International Money Transfer Operators (IMTOs).

CBN also listed embassies, hotels that are authorised buyers of foreign currencies, the Nigerian foreign exchange market (NFEM), as well as any other source that the apex bank may specify.

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