THE IMPLICATION OF BANNING BUREAU DE CHANGE (BDG) ON SECURED CREDIT TRANSACTIONS IN NIGERIA

Abstract

The introduction of Bureau De Change as a form of business venture, playing an intermediary role in sourcing foreign exchange in Nigeria for end users, is one that elicits a mixed reaction. While to some they are a necessary evil since they are able to meet their immediate demand notwithstanding what they pass through to get their forex needs achieved, to others, who noted with disappointment and great concern that our Bureau De Change operators have abandoned the original objective for their establishment which was to serve retail end users who need $5,000 or less and have instead become wholesale dealers, illegally in foreign exchange to the tune of millions of dollars per transaction. To these set of persons, the undoing of Bureau De Change operators were so unpardonable as such they should be banned. This view culminated to the pronouncement of the ban of Bureau De Change by the immediate past Governor of the Central Bank, Mr. Godwin Emefiele on 27th July, 2021 which had had a negative impact on secured credit transaction. This paper therefore, looked closely at the ban of Bureau De Change by the Central Bank of Nigeria with a view to unravel its impact on secured credit transactions in Nigeria. The paper from its findings discovered that, as a result of shortage of foreign exchange from the Central Bank, corporate industries and businesses were forced to source foreign exchange from the parallel market thereby encouraging the business of Bureau De Change operatives as arbitrageurs. The implication of this is sufficient incentive in terms of returns to investment to the Bureau De Change Operators who their businesses were also sustained by the recalcitrant round tripping monster, the authority, who allows them feed fat on this business. This paper by further looking at the way Ghana, a neighbouring Country handled the excesses of Bureau De Change in their Country and the benefits that accrued to them by so doing, drew out conclusions and made recommendations on how best Bureau De Change as a business venture could be reorganized to enable secured credit transactions in Nigeria play its pivotal role in revamping our economy.