BDC operators urges FG to deepen ties with China, others against US tariff
The Association of Bureau de Change Operators of Nigeria has asked the Federal Government to strengthen commercial links with India, China, and African countries as a strategic reaction to the negative impact of a 14% tariff imposed by US President Donald Trump on Nigerian goods.Dr. Aminu Gwadabe, President of ABCON, expressed concern over the economic strain created by the tariff increase, particularly the consequences for foreign exchange stability and liquidity in the Nigerian economy.
Dr. Gwadabe spoke on Monday and advocated for an urgent diversification of Nigeria's foreign exchange sources, emphasising the country's overreliance on oil income.
"Nigeria, being a mono-cultural economy that relies heavily on petro-dollar receipts, should embrace more trade partnerships with countries like India, China, and African markets to broaden its export base," according to him.
To alleviate foreign exchange volatility, Dr. Gwadabe proposed that the Central Bank of Nigeria require commercial banks to divert interbank proceeds to Bureau de Change operators. This, he claimed, would assist to relieve pressure on the forex market and stabilise the naira.
He also pushed for policies that encourage local manufacture of exportable commodities, so reducing Nigeria's dependency on oil and strengthening its economic resiliency.
The CBN has already infused $197.71 million into the forex market through sales to authorised dealers, which Dr. Gwadabe welcomed. However, he cautioned that the long-term effects of the US tax could undermine these efforts by making Nigerian products less competitive, resulting in lower exports and revenue.
Despite recent efforts, the naira remained under pressure to depreciate. On Monday, it closed at N1,629.00 per dollar on the official market, down from N1,600.00 on Friday and N1,569.00 on Thursday.
In contrast, the parallel market performed marginally better, with the naira trading at N1,555.00/$1, compared to N1,560.00/$1 at the end of last week.
Dr. Gwadabe emphasised the importance of the CBN ensuring liquidity not only in the interbank segment but also in the retail forex market, particularly to support small and medium-sized firms as well as invisible transactions like education and medical bills.
He described the US trade tariffs as part of a larger "global tension raging like wildfire across jurisdictions," warning that their ripple effects are being felt in emerging markets such as Nigeria, and while praising the CBN's consistency in intervening to curb inflation and market volatility, he emphasised the need for long-term economic strategy and diplomacy to protect Nigeria's economy from future shocks.
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