Rabiu Aliyu Kiru, a BDC Consultant from Kano State, has weighed in on the revised guidelines for BDC operations in Nigeria, offering independent insights into the matter.
Aliyu Kiru highlights several key points regarding the revised guidelines saying that the history of Class ‘A’ BDCs, initially requiring a N500m deposit which was later reduced to N250m, reflects a persistent issue of insufficient USD supply to meet demand, leading to a reclassification to Class ‘B’
The reliance on foreigners for foreign currency transactions is deemed inadequate due to Nigeria’s status as a developing country.
The proposed tiered centers designated by the CBN may become redundant as foreign currency supply is primarily directed towards exporters and other foreigners, deterring their patronage due to lower buying rates compared to the parallel market
Foreigners and exporters are unlikely to sell their foreign currency to the designated centers, as they would prefer commercial banks for better rates and flexibility.
Aliyu Kiru suggests that the designated centers may become obsolete despite substantial investments
He strongly advises the CBN to reconsider reopening Class ‘B’ licenses, with weekly funding and specific conditions for selling primarily for BTA and PTA purposes. He believes this approach would effectively impact commodity prices.
Aliyu Kiru’s insights emphasize the need for a pragmatic approach to BDC operations in Nigeria, urging regulatory bodies to consider the practical implications for both market participants and economic stability
