*The Association of Bureaux De Change Operators of Nigeria advocates improved local production, diversification of the economy from oil in order to keep the Nigerian economy going strong in the face of the current challenges

Isola Moses | ConsumerConnect

Foreign Exchange (Forex) experts have said Naira exchange rate volatility despite the Central Bank of Nigeria’s (CBN) interventions is being compounded by the increasing inflationary trend, interest rate hike, and slow economic growth with consequences for middle and low-income earners in the West African country.

Alhaji (Dr.) Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), who stated this at the weekend in Lagos said the unfolding scenarios raised the risk of stagflation with potentially harmful consequences for the poor within the economy.

Alhaji (Dr.) Gwadabe, said that already, global growth is expected to slump from 5.7 percent 2021 to 2.9 percent 2022, significantly lower than 4.1 percent predicted by the International Monetary Fund (IMF) January 2022.

The ABCON President also said: “Although the CBN recently demonstrated greater commitment to combat inflation by raising the Monetary Policy Rate (MPR) by 150 basis points to 13 percent per annum, the strengthening of the economy through local production will reverse negative trends.”

In order to keep the Nigerian economy going strong in the face of these challenges, Gwadabe advocated improved local production and diversification of the economy from oil.

According to him, the Naira exchanges at N614/$1 at the parallel market, dollar bids continues to rise as inflation rose to 11-month high (17.71 percent) May 2022.

These developments, the ABCON Chief said, are eroding the purchasing power of households.

He also noted: “The biggest driver of inflation is the stubborn rise in food inflation.

“The average price level of the food basket rose by 1.13 percent to 19.50 percent in May from 18.37 per cent in April.

“This can be reversed by increased support for agriculture and government policies that support the sector.”

According to him, Nigeria’s huge population and diaspora market, which attracts average of $20billion annually, can be explored to deepen dollar inflows to the economy.

Gwadabe as well stated expanding the Dollar receipt points through over 5,000 Bureaux de Change operators can deepen Dollar inflows and significantly raise Nigeria’s Forex position.

Gwadabe said globally, BDCs remain one of the channels through which the Diaspora remittance funds come into countries.

The BDCs remain at the centre of economic development and have the capacity to attract needed capital for the development of the Nigerian economy and deepening of Forex market.