Bar non-oil export domiciliary account holders from accessing FX from official window, ABCON urges CBN

The Association of Bureau De Change Operators of Nigeria (ABCON) has requested that the Central Bank of Nigeria (CBN) prevent non-oil export domiciliary account holders from obtaining foreign exchange through the official market.

ABCON’s president, Dr. Aminu Gwadabe, said this in Lagos on Thursday that this measure would increase the availability of dollars in the market and contribute to the growth of the country’s financial reserves.

Gwadabe also noted with concern that certain companies and manufacturers, despite having substantial dollar reserves from non-oil exports in their accounts, are acquiring foreign exchange from the official market to finance Naira loans.

He stated, “We therefore advise for the review of the guidelines on holding currencies on non-oil export accounts to a maximum of 48 hours, to borrow from the South African policy on the operations of non-oil exports domiciliary account proceeds.”

“The CBN should also not make applicants of huge billions of dollars holding on their non-export oil proceeds Dom accounts eligible for fx request at both the NAFEM and NAFEX window.”

“In the same vein, we urge the CBN to upgrade its policies and circulars to legislation regarding the impending BDCs new reforms.”

“This is to give comfort and guarantees to would-be investors in the transformation of the BDC industry’s sub sector and allowing only the existing stakeholders the grandfather’s right for merger and acquisition to meet the expected reviewed financial requirements as suggested by ABCON.”

The association also requested a separation of ownership and operations of the FMDQ and pledged the continuous engagement of its members with the different stakeholders in the industry.

Earlier in the week, the CBN had banned the use of foreign currency– denominated collateral for naira loans in banks and also began selling USD to BDCs at N1,101/$.

Furthermore, Nigerians reportedly have around $30 billion in domiciliary accounts and the federal government is looking to tap into that sector to boost liquidity in the foreign exchange markets.

The Minister of Finance, Wale Edun, has stated that the federal government hopes to offer local foreign currency denominated bonds in the second quarter of 2024 in a bid to entice holders of USD in domiciliary accounts to invest.