Story from Kenneth AFOR, Lagos
Some operators of Bureau de Change (BDC) have urged the Central Bank of Nigeria (CBN) to make Forex accessible to all parties involved amid the ban of the sale of the commodity to its members.
The ban of the sale of foreign currencies to BDCs by the country’s apex bank according to operators will create fourther scarcity of the commodity thereby causing prices to skyrocket.
According to Mohammed Adamu Suleiman of Kanamco International Ltd Bureau De Change in Lagos in an exclusive telephone interview with Neptune Prime, the new move by the CBN will cause prices of forex to go up because the bank has limited the accessibility of funds to a set of individuals which will consequently affect prices of goods and services in the country.
“If there is excess supply price will go down.
“Has the CBN been giving out as much as enough to the community? No, so definitely, this is scarcity time which will make the price rise again even if it is not USD or currency exchange, any item or anything on the commodity market will suffer from it. Generally, everybody is suffering from it,” he said.
When asked if the policy affect other businesses as well, he responded: It is “affecting all businesses because most of the international businesses are based on the dollar, even if it is Pound Sterling or Euro you will still buy currency at the price which it is going up, so it is not favouring anybody, not the BDCs, not the importers and exporters, it is affecting everybody.”
Since 2015, the CBN has restricted the provision of forex at the Nigerian foreign exchange window on some 41 items in its drive for backward integration of the economy, the move has to a large extent crippled a lot of businesses that depend largely on unrestricted access to forex.
But Suleiman in his view said access to the fund should not be limited to travellers but should be easily accessible to individuals and business owners which will boost the smooth running of their businesses.
While the prices of forex continue to surge, Suleiman said that prices of the commodity will go down if the CBN would lower its rates.
“If they want to help the masses, or boost businesses, individuals should be able to go to the banks with their BVN, and purchase dollars as much as they can maybe $4,000, $5,000 or $10,000 purchase it at a lower rate and the CBN must reduce their price because nothing will make forex go up against other than their interest.
“The advice is they should reduce their rate. Let’s assume the way prices are going up, for instance, they should say minus N60 or minus N70 like that we all know it’s a gamble some will be at a loss while others will gain, so it’s like that, everybody has to bear it. Even at the international trading, it is the same thing. During the time of Ben Bernanke (a Former Chair of the Federal Reserve of the United States), when volatility is going on currency, people gained.
“What we are seeing now is if the CBN can just make availability everywhere, easy for Nigerians to get, if they should reduce their price, I bet you everybody will have a figurehead but as it is now, prices of items are going up, anybody will tell you now that the prices have risen. A car dealer will tell you that dollar has risen same with traders,” he advised.