The Association of Bureaux Des Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) and the Federal Government to embrace practical solutions to salvage the naira.
Alhaji Aminu Gwadabe gave the advice in an interview with the News Agency of Nigeria (NAN) on Tuesday in Lagos.
Gwadabe said there should be a convergence of monetary and fiscal policies to rescue the naira in view of the wide gap between the official and the parallel market rates.
“It is pertinent for both the apex bank and the incoming administration to prioritise and embrace practical solutions.
“That will help turn the fortune of the local currency from one of the worst performing currencies in the world to an effective, stronger performing currency.
“Our members have the capacity that the apex bank and the incoming government can leverage in establishing a market clearing rates realignment, thereby demystifying the existing wastage of our scarce foreign exchange revenues,” Gwadabe said.
The ABCON boss said it was reported that over N8 trillion had been lost to fiscal and monetary policy mismatch of the economy that bred currency substitution and rent seeking.
According to him, BDCs continue to provide tools for the authorities to stop the wastage and ensure exchange rate stability for future planning.
He said it was important to diversify the nation’s foreign exchange inflows through the securitisation of Diaspora remittances.
He noted that remittances remained the only hanging fruits and fastest way to boost liquidity in the market.
The ABCON chief said remittances should be channeled through the BDC sub sector: “It is convenient, competitive and breaks the existing monopolistic structures of the current market regime.
“We can borrow a leaf from other climes like India, China, Kenya, and South Africa.”
He said it was important for the government to overhaul the nation’s trade policies to reflect its import dependent economy through incentivised and concrete import substitution programmes that would empower local productive capacity.
He said the building of critical infrastructure would encourage foreign capital investments thus shoring up the value of the naira
“Our moribund infrastructure in electricity, roads and energy supply is a monster in our desires for a rapid development and growth.
“In the same vein there is the need for stronger joint venture capital institutions to complement the conventional banking systems in accessing cheaper credits, loans and capital by the small scale industries.
“The incoming government should also have a paradigm shift from import of capital to import of knowledge and galvanise the growing youth of our nation,” Gwadabe said.
The ABCON chief said a robust stakeholder’s engagement and collaboration on reforms and corporate governance were key to boosting the effectiveness of the BDC sub sector.
“We, therefore, urge the incoming government to first make their number one agenda a National Discourse on Foreign Exchange Challenges,” Gwadabe said.
He said the discourse should provide practical solutions with all stakeholders in the retail FX market, which would involve the BDCs, International Money Transfer Service Operators, Fintechs and commercial banks.