Why IMTOs monopoly on forex remittance should be broken ~ABCON President
Operators of foreign exchange retail outlets are seeking government intervention to break the monopoly currently enjoyed by the International Money Transfer Organisations (IMTOs) in the domestic forex market.
In a note to Nigerians in the diaspora at a Webinar organized to mark the Nigerian Diaspora day on Saturday, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe sought the inclusion of the BDCs in the process of funds remittance and transfer by Nigerians in diaspora.
According to him, “Bureaux de Change (BDCs) remain at the centre of economic development and have the capacity to attract needed capital for the development of the Nigerian economy.”
He noted that the monopoly of IMTOs in the business of foreign exchange remittances have to be broken while canvassing for the inclusion of BDCs operators as international fund transfer agents by the Central Bank of Nigeria (CBN).
“The monopoly in the Diaspora remittances businesses has to be broken by making Bureaux De Change Operators agents for receiving funds from Nigerians abroad.
“Allowing multiple and digitized channels to receive funds and adopting virtual Know Your Customer rules will help save the economy from consistent dollar crunch and revenue leakages,” Gwadabe said.
The president of the ABCON, who said about $25 billion worth of foreign currencies was remitted to the country last year by Nigerians working abroad, said allowing ABCON members to play a role in the process will boost local economies of operators and help the country block all leakages.
He also suggested to the government and the CBN to address the issue of the high cost of money transfer by those abroad to Nigeria, which he said is higher than what is obtained in other parts of the world.
“There is no gainsaying that transfer of funds has made it easier for Nigerians in the Diaspora to meet the financial needs of their kinsmen at home. However, the region is still the most expensive in the world to send money.
“For instance, although the average cost of sending $200 globally was 7.1 percent, (but) Sub-Saharan Africa, including Nigeria has the costliest fee in the world at an average cost of 9.4 percent.
“For me, the average transaction cost of remittances should be reduced to less than five percent of the remittance amount, and three percent by 2030,” the ABCON president said.
He said there are over 1.24 million Nigerian Migrants abroad and 50 percent of them live within the African neighbouring countries, and the figure is expected to rise in the coming years.
He said what the capital flows from Nigerians living abroad is higher than government earnings from crude oil exports and “are also higher than both Foreign Direct Investment and foreign aids flow to the economy and still, are cheaper sources of funds.”