BDCs Call for Public Display of Black Market Forex Rates as Naira Crisis Deepens

More than two years after the ban on AbokiFX for publishing parallel market exchange rates online, efforts are underway to authorize the Association of Bureau De Change Operators of Nigeria (ABCON) to publicly display the black-market rates of the naira against the dollar on online platforms.

The ABCON President, Aminu Gwadabe speaking to Nairametrics noted that the association was proposing to regulators to allow BDCs to restart the public display of exchange rates.

He also noted that as part of the proposal, ABCON is upgrading the functionality of their existing website to compete with other platforms in the economy.

This move is expected to be another in a long line of departures from the measures implemented by the former central bank leadership, which sought to stringently regulate BDC operations and reduce the prominence of the unofficial market.

In September 2021, the Central Bank of Nigeria went after AbokiFX, a platform that publishes black market exchange rates for the Naira online.

The apex bank levied allegations against the platform, noting that they were involved in “illegal activities that undermine the economy.“

At the time, then-CBN Governor, Godwin Emefiele noted that the owner of AbokiFX, Oniwinde Adedotun,

“Mr Oniwinde is an illegal FX dealer that has inflow and sold tens of millions of FX to several Nigerian companies in contravention of the FX law, he directly benefits from the rates he quotes daily on his website.”

As AbokiFX stopped aggregating the black-market rates, Naijabdcs.com the online platform owned by ABCON also stopped publishing the rates online.

Speaking to Bloomberg at the time, ABCON’s President Aminu Gwadabe noted “The central bank has outlawed the publication of any parallel market rates,”

Emefiele confirmed Gwadabe’s statement, noting to journalists in 2021, “I am sorry to say that I do not, and I do not intend to recognise any FX in the market.”

As of January 22, 2024, the Naira was trading at an all-time low of N1360/$ in the parallel market, and about N1371/$ in the P2P market, representing a 47% discrepancy from the N925.34/$ trading in the official market.

Despite efforts from this administration and the CBN leadership to revolutionize the exchange rate regime, their efforts have been met with difficulty as the Naira remains under pressure due to inadequate liquidity.

In September 2023, the Minister of Finance, Wale Edun noted that there was a $6.8 Billion overdue forward payment that caused the Naira to weaken severely.

However, since then, the CBN has made different tranche payments in a bid to clear the backlogs.