+Africa After AfCFTA: Internal Trade Declines
Bureau Decline Operators
Change and decline.
That’s pretty much all that Bureau de Change operators in Nigeria oversee.
Operating as a black market, the BDCs get their spread from lower values of the naira against the dollar.
In a bid to revise the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria, the Central Bank of Nigeria has revoked the licences of 4,173 Bureaux De Change Operators(BDC).
A Bureau De Change is any company licensed to carry out small-scale foreign exchange services in Nigeria, whose sole objective is carrying on such business on a stand-alone basis.
As of March 2024, when the licences of BDC operators were revoked, the number of BDCs in Nigeria was 1,517, a decline from 5,690 in 2023. This is the smallest number of operators since 2011.
According to the apex bank, the affected BDC operators failed to observe at least one of the extant regulatory provisions for Bureaux De Change operation in the country, such as payment of all necessary fees, including licence renewal, within the stipulated period, the remit of returns and violation of Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) regulations.
This development is part of a broader strategy to rebuild trust and credibility in the country’s foreign exchange market.
We hope the spared 1,517 Bureau de Change will work to bring the Naira up and no longer down.
Africa After AfCFTA: Internal Trade Declines
African countries still trade more with countries outside the continent than with each other, a report by the Economic Commission for Africa has revealed.
This undermines the essence of the African Continental Free Trade Area (AfCFTA), which aims to enhance intra-African trade across all sectors of Africa’s economy.
Before the African Continental Free Trade Area arrangement was launched officially in January 2021, the level of trade and economic interactions among African nations was low, but it was predicted to grow after implementing the AfCFTA.
In 2021, total intra-African trade as a share of global trade still stood at 14.5%. However, it declined to 13.7% in 2022.
Over the same period, intra-African exports decreased from 18.2% to 17.9%.
Conversely, intra-African imports decreased from 12.8% to 12.1%.
The pattern of low intra-African trade between African countries is observable in Nigeria’s foreign trade statistics.
Nigeria’s trade relations with countries from Europe, Asia and America outweigh countries within the continent of Africa.
In the last five years, Nigeria’s total imports from countries in Asia, Europe, and America exceeded those from African countries.
Over the same period, Nigeria’s total exports to African regions remain low compared to its exports to Europe and Asia.
This trend in Nigeria and other African countries may jeopardise the objectives of AfCFTA.
The AfCFTA agreement requires participating countries to eliminate tariffs on 90% of goods to tackle various trade barriers and gradually promote trade in services within the continent.
When effectively implemented, the AfCFTA will increase the production of goods and services for export and investments in regional infrastructure.