ABCON plans unified retail FX market to hedge volatility

Business a.m.

The Association of Bureaux De Change Operators of Nigeria (ABCON) is spearheading efforts to establish a unified retail foreign exchange market aimed at addressing volatility and enhancing regulatory compliance within the Bureaux De Change (BDC) sub-sector.

Aminu Gwadabe, the ABCON president, disclosed that the association is actively pursuing a strategic plan to unify all operators from diverse sections of the market, including the launch of state-level chapters that will be responsible for coordinating, integrating, and maintaining a cohesive market structure.

According to Gwadabe, ABCON’s efforts to modernise and harmonise the retail forex market will extend to all BDC operators across Nigeria, through the implementation of automation policies and platforms, including an upgrade of the association’s Business Process Platform (formerly known as SAAZ Master). The new blueprint for a unified retail forex market structure, he explained, will leverage a centralised, online, real-time trading platform that is both democratised and liberalised, creating a more inclusive, transparent, and efficient retail forex market in Nigeria.

Gwadabe stated further that ABCON’s commitment to maintaining a constructive dialogue with regulatory agencies, security personnel, and other governmental bodies in order to foster a forex market that is not only secure and thriving but also supportive of regulation and government initiatives.

The ABCON president said: “Part of our vision for a united retail-end forex market include activating geo mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps.This will enable forex buyers to easily locate where BDCs offices are for effective and seamless transactions.”

According to Gwadabe, a robust, dynamic retail forex market can offer significant benefits, including supporting the CBN’s objective of achieving accurate price discovery for the naira, balancing international obligations with national objectives, and simplifying regulatory oversight, security monitoring, and supervision for BDC players.

Gwadabe highlighted several additional advantages that could be realised through the implementation of a unified retail forex market, including:

– The creation of market intelligence reports that provide insights into market trends and opportunities.

– A positive impact on the local and global reputation of BDCs, other market players, and stakeholders, leading to increased credibility and trust.

– The potential to generate employment opportunities, further supporting the growth and development of the Nigerian forex market.

Gwadabe noted that, if executed effectively, this plan would enable the government to seamlessly capture revenues through a digitised retail forex market while also establishing a transparent, competitive platform that will curb the proliferation of unlicensed platforms such as Binance, Aboki FX, and ByBit.

Moreover, Gwadabe stated that ABCON, as a self-regulatory body and umbrella organisation for CBN-licensed BDCs, is nationally recognised and committed to upholding the highest standards of compliance and transparency.

Gwadabe underscored the extensive reach and influence of ABCON, highlighting the organisation’s national and regional presence, as well as its diverse and representative leadership. He further highlighted the association’s unwavering commitment to protecting the interests of legitimate forex dealers and promoting a robust naira, stressing ABCON’s impact in the BDC sector, its leveraging of technology, capacity-building initiatives for operators, and its support for exchange rate stability.

The ABCON president also discussed the association’s primary objective of ensuring the availability of foreign exchange at the retail level and reducing the disparity between the official and parallel market exchange rates. He also underscored the need for BDC operators to embrace technology and innovation to deliver superior services to their clients.

Furthermore, Gwadabe condemned the resurgence of illegal forex conversion and peer-to-peer trading activities, warning that these could destabilise the naira’s value. He highlighted the importance of adaptability and resilience in navigating the changing economic landscape, noting the need for BDC operators to remain agile and informed.

He added: “I can confidently say that the apex bank and relevant security agencies are committed to ensuring that  naira continues to appreciate and will deal with any saboteurs. It is therefore in our own interest to desist from hoarding and speculation as it is a burble and will burst in no distant time.”