Naira remains strong despite election odds- ABCON

Factual Pursuit of Truth for Progress

The nation’s currency, the naira has in the  last 18 months remained stable at both the official and parallel segment of foreign exchange markets, despite several odds facing it ahead of the 2019 general elections.
Bureaux De Change Operators attributed the forex stability in the system to the Central Bank of Nigeria intervention in the forex market.
They stated that the CBN constant supply of forex in the market reduce speculation in the system.
President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji (Dr.) Aminu Gwadabe while addressing financial journalists in Lagos  commended the CBN financial sector reforms, and the contributions of the Bureau de Change (BDC) operators to the current exchange rate stability, as against the common practice of currency devaluations and depreciations across the world at election times.   
The domestic currency  exchanges at N306 to a dollar in the official market and N358 to a dollar in the parallel market despite the election fears. Gwadabe said that the absence of foreign exchange spikes and volatility before and during the 2019 elections year is a major achievement by the CBN and Federal Government. 
Speaking further he said “The dexterity of the government policies in ensuring that naria remained stable in an election year is commendable. Election years, as witnessed during the 2015 general elections, are marred by exchange rate volatility and spikes in the market”. 
He disclosed that financial pundits had had in early 2016, speculated that the naira will depreciate to as low as N1000 to a dollar. .
He said that the election period of 2015 witnessed over $100 billion capital flight outside the country. The activities of currency hoarders, speculators and rent seekers reached its peak in 2015.
He however said  that ironically, the trend in the foreign exchange market during this year’s election showed hope for the economy, sustained exchange rate stability, adequate dollar liquidity, increasing foreign capital inflows and most importantly, a unified and convergent exchange rate of the BDCs and the parallel market. These feats, he said, are commendable by all standards.
On deepening capacity/skills of industry operators, Gwadabe    appealed  to the CBN to issue Letter of Consent to ABCON proposed training institute.  This, he added, is going to boost the current ABCON Management commitment to capacity building for its members to stimulate competency in the sector and make room for better foreign exchange management. 
Continuing, Gwadabe also listed factors that led to the current successes in the foreign exchange market. He said: “First, I want to congratulate the leadership of the CBN for a well coordinated, proactive exchange rate management strategies which include creation of several foreign exchange windows to deepen liquidity and price discovery, restriction of foreign exchange on 42 items that can be produced locally, self sufficiency in rice production and continuous partnerships between the apex bank and BDCs, all led to the current exchange rate stability enjoyed in the country”.
According to Gwadabe, the contribution of the security agents in the effective surveillance of Nigeria’s boarders/ airports to checkmate illegal foreign currency evacuation have in no small measure strengthened  exchange rate and promoted economic growth.
He also praised the BDC operators under the ABCON leadership for staying in the business despite  lower margins and risk of operations they face on daily basis.
The ABCON boss said the BDCs have remained resolute in ensuring sustainable and stable exchange rate, price discovery and uniformity in the market pricing for the dollar against the naira.He said the current one per cent transaction margin that operators take is not sufficient for BDCs’ sustained operation, and totally falls below global standard of 10 per cent. 
He said the BDCs under the ABCON leadership have demonstrated patriotism in the business by staying and sustaining it despite several challenges facing  the sector.
He said the CBN-licenced BDCs under the aegis of ABCON is not in business solely to make profit, but to protect the local currency and ensure that the economy thrives through its contribution to job creation and improved dollar liquidity in the economy.
Gwadabe said the BDCs will continue to operate within the law and set regulation, and is bound to even perform better given the ongoing automation of BDCs’ operations though the ABCON Live Run Automation Portal that has continued to integrate each of the over 4,500 CBN-licenced BDCs across the country.
He also commended the role played by the media is sustaining ongoing stability in the foreign exchange market, adding that the media has not only remained as the watchdog of the society, but key stakeholder in economic growth and development.


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