Putting an end to the sale of foreign exchange (FX) to Bureau De Change (BDC) operators, Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has “disrupted one of the juiciest gravy trains in the Nigerian economic racket,” Financial Derivatives Company Limited (FDC) has stated.
However, the naira depreciated to N525 to a dollar on Wednesday on the parallel market, lower than the N505 to a dollar it traded on Tuesday after the central bank announced its discontinuation of FX sale to BDCs. But on the Investors and Exporters’ (I & E) window, the naira exchange rate against the dollar closed at N411.60 to a dollar at the close of market yesterday, compared with the N411.50 to a dollar it closed the previous day.
FDC, a Lagos-based financial advisory and research firm, stressed, “Even though BDCs are licensed by the CBN, the point had been reached where the programme was no longer tenable and surely not sustainable.”
It stated that Nigeria was spending more on BDCs than debt service.
The firm wondered how a country whose total exports and receipts were approximately $59.8 billion, was spending $5 billion to subsidise “supposed Nigerian tourists during a COVID-19 year.
“In other words, spending more on tourism rather than debt servicing. Therefore, the structure of the forex market needed sanitisation,” the firm headed by Mr. Bismarck Rewane added.