By Babajide Komolafe, Economy Editor & Elizabeth Adegbesan
Association of Bureaux De Change Operators of Nigeria (ABCON) and Chief Executive Officers of investment firms have commended the uniform exchange rate policy pronounced by President Bola Tinubu describing it as a right step that will eliminate sharp practices, enhance transparency, competition, foreign investment inflow hence stimulate the economy.
The CEOs include Co-Managing Partner/Founder, Comercio Partners Limited, an investment banking company, Nnamdi Nwizu and the Managing Director/Chief Executive, PFI Capital Limited, Peter Elege.
Speaking to Vanguard, ABCON President, Aminu Gwadabe, said: “Multiple exchange rate is the ground for naira volatility because it comes with a lot of illegal economic behaviours like hoarding, currency substitution, round tripping and what have you.
“So unifying the exchange rate will bring a competitive rate devoid of all these shenanigans surrounding the misfortune of the naira. And two, it will enable a true market discovery. Once we have a true market discovery, that means the market is devoid of monopoly.
“You will have competition and in a competitive market, goods and services are always available.
So and it will encourage the inflow of foreign portfolio investment, because the investors are now comfortable as the market will become liquid for free entry, free exit.
“Even the diaspora remittance will also be competitive and there will be incentive for people, because now the multiplicity of exchange rate is diverting all transactions to an inefficient informal market. Most of the inflows that are supposed to come is not that they are not coming but they are being traded in an inefficient informal market. So nobody is seeing it.
“As a group we endorse, we support, we align with the decision to unify the exchange rate and then the use of the BDCs as a transmission mechanism to achieve that intention of uniform exchange rate. The BDCs have been able to play a role of providing liquidity into the retail end of the forex market which now helps in reducing the gap between the buying and the selling rate which will now entails the true value of the naira.”
Source: Vanguard
