The recent clampdown on the Bureau De Change (BDC) operators by the officials of the Economic and Financial Crimes Commission (EFCC) in Abuja will not help in stabilising the naira, which has continued to be on a free fall, according to analysts.
According to reports, the EFCC raided some Bureau De Change outlets in the Federal Capital Territory, Abuja, arresting over 100 operators as Nigeria grapples with the continued fall of the naira against the US dollar.
On Friday naira fell to a record low of 1,665.50 per one dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ Securities Exchange.
“The action is the wrong approach and it is not sustainable to stabilise the naira,” a BDC operator said under anonymity.
The BDC operator said the government was not disciplined in its lavish spending. They take loans from the International Money Transfer (IMF) and World Bank and share it with the government ministry, parastatals, and the same agency and they bring the same money to buy dollars and keep.
“They will call the BDCs and say do you have dollars if yes bring $1m cash and they will use their vehicle to escort you to your destination so no trace of this transaction with them,” the source said.
“The effect on the foreign exchange is naira is going down unofficially and officially in the world market because of Nigeria’s loan. How can this end soon? May God help us,” an operator said.
Muda Yusuf, director/CEO, Centre for the Promotion of Private Enterprise, said: “I do not think it will have any significant effect because it is like leaving the causes and fighting the symptoms. It cannot solve the problem. You need to address the causes before the problem. There are better ways, particularly using technology.”
Peter Obi, the presidential candidate of the Labour Party in the 2023 election, has criticised the reported crackdown on BDC operators by government agencies, describing it as ill-advised and misdirected.
On X platform, the former governor of Anambra State expressed his belief that the action would exacerbate the country’s exchange rate situation rather than improve it. He emphasized that Bureau De Changes are not the main providers of foreign exchange.
“The recent reported attacks and disruption of the business activities of BDC operators in different urban centres across the country by government agencies, are ill-advised and wrongly directed,” he said.
“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,” Obi said.
According to a financial advisor, “I am not sure the government is ready to solve the foreign exchange problem in Nigeria, the allocation to BDCs and commercial banks comes directly from the CBN, and they should be able to put mechanism that trace legitimate transaction in conjunction with other financial crime unit in country. However, I am still much convinced the government is ready to tackle the country because government agencies and parastatals convert their naira balance to dollars putting more pressure on the naira. The government itself still collects some taxes in dollars. CBN is always too quick to adjust clearance rate to reflect new market rate creating a price discovery.”
An economist said, “This is madness. Emefiele cut trees that year, what is the effect now? This is madness. Emefiele during his time went to cut trees that year, what was the effect? Ban crypto, ban abokifx. You can’t float the currency and pursue people who are selling the floated currency.
