Policy Advisory Council of President Bola Tinubu has asked the federal government of Nigeria to increase the capital requirements of Bureaux De Change (BDCs) operators that seek to participate in Nigeria’s foreign exchange (FX) market.
Gatekeepers News reports that this was contained in a document, titled, ‘Policy Advisory Council Report: National Economy Sub-committee’.
The council highlighted key reforms that the government can implement to improve the monetary policy of the country.
It advised the government to allow the banks to operate as the primary dealers to supply the FX market through a willing buyer/seller model.
According to the council, only BDCs with a strong capitalisation should be allowed to participate in the country’s FX market.
The advisory body suggested, “Raise the capital requirements of Bureaux De Change operators (BDCs) to ensure only strong, well-capitalised and automated BDCs are allowed to operate. e.g. Travelex. Introduce an effective exchange rate management system, viz the crawling peg.”
If this recommendation is implemented, many BDC operators may be forced to shutdown.
Nevertheless, the council believes that this would help in price stability to foster economic growth.
Before Tinubu’s administration, the number of BDC operators surged from 74 in 2005 to 5,689 in 2021, according to data from the Central Bank of Nigeria (CBN).
Before Godwin Emefiele’s suspension, the operators grew by over 100 percent under his administration.
Although Emefiele had consistently warned Nigerians to be cautious of trading at the parallel market, the BDC operators have bridged the gap to FX access for citizens and businesses.
If President Tinubu heeds the recommendations of the advisory council, the bad blood between the BDCs and the CBN may either end or worsen in his administration.
