ABCON Will Support Any FG’s Measure to Rid Nigeria of Terrorism
Nigerians were jolted with the revelation by the federal government, last week, that some of the sponsors of the terrorism that has thrown Nigeria into a theatre of killing and kidnapping for almost six years included some members of the Bureaux de Change community. As it stands, the Association of Bureaux de Change Operators of Nigeria (ABCON), being the recognised body of licensed BDCs in the country has been brought to the centre of the issue. The ABCON President, Alhaji Aminu Gwadabe, speaks with the THISDAY team, comprising Kunle Aderinokun, Chris Paul and Oyinlola Sale, to put the matter in its proper perspective. Among other issues, Gwadabe also dwells on diaspora remittances and sheds light on BDC operations, drawing the demarcation between its members and unlicensed forex dealers as well as addresses other pertinent issues in the foreign exchange market and digital space. Excerpts:
Recently, the Central Bank of Nigeria came hard on patrons of cryptocurrency, asking banks to close accounts of their customers linked to cryptocurrency transactions and exchanges. This decision by the banking regulatory authority has attracted diverse reactions from different quarters. What’s your view on this development?
Advanced countries are in the fourth revolution in terms of development, while Nigeria is yet to have a grasp of even the first revolution, which is the agricultural to industrial then digital revolution, which is the apex of all revolutions, today.
Digital currency is a global phenomenon and without a doubt, it is the future of global currency, considering the challenges of paper money.
So, it has its own benefits and its own vulnerability.
Other countries that have perfected the art of tracking transactions on the digital platform still exercise some level of caution, even though the central banks still find ways to monitor its trends.
The main purpose of digital currency is to break the monopoly of central banks because the central banks monitor, control, coordinate and trace transactions.
However, for now, the cryptocurrency world is so anonymous by its operation that it is a challenge to trace parties to a transaction.
This is where the conflict lies; between the advocacy of digital currency and the regulators. But I believe, over time, it is going to be a welcome idea.
On our part as Bureaux de Change (BDCs) with over 6,000 members, we have been advocating our transactions to be digital. While we acknowledge that the country may still be moving within the orbit of the first revolution, transactions in the country, especially with today’s generation have been taken to the digital realm. So, people have to key in and transform their transactions to digital windows of money exchange.
Now, the leadership of our association has succeeded in digitising ABCON’s operations.
Today, our operations are digitised into four automations of transactions: We have one called the SAS Masters, a digital operation by our members, whereby you operate from the comfort of your office. Over 4,000 operators are on that platform. You can render your returns in real time, online, direct to the central bank server. Before this technology, we used IFAS; people had to come to a central place to start downloading transactions. So, we have digitised that part of our operations. We are also on the platform of NIBSS (Nigeria Inter-Bank Settlement System). There is this issue of validation- KYC (Know Your Customer) status; you have to know your customer and one of the key information we are meant to receive is the BVN. You know BVN is an identity now. We confirm your identity and how do we do that? The agency that warehouses the BVN is the NIBSS. They have a portal, where you can go in, see the picture, date of birth, name and signature of the owner of the BVN; for you to know the true identity of the customer you are transacting with.
We are also on the Nigeria Financial Intelligence Unit (NFIU) platform, it used to be Go-AML. But because of the nature of our transaction, mostly we are engaged in smaller volumes… I am not saying there are no bigger volumes; but the scope does not allow us. The scope of our transaction is $5,000 maximum for school fees or $5,000 for business transactions. So, we are on the NFIU platform, where we render Cash Transaction Report (CTR) and Suspicious Transaction Report (STR). As you are aware, there is an Act of the NFIU that pegs the maximum transactions for individuals at N500, 000 and N5,000,000 for corporate bodies per transaction. Any amount above it is expected to be reported to the NFIU. Then, there could be suspicious transaction. I don’t know you and the first time, you are coming to do forex transaction in my office, you come with hard currency stained with human blood. So, I should be suspicious of the source of the money. It could be proceeds of armed robbery. But I will still go ahead and complete the transaction with you. However, I will flag and report it as a suspicious transaction because the things I have seen around it. Or, you come and I tell you the rate is, say, N700 per dollar and you say “am ready, just give me, give me…” all these are some of the traits of suspicious transaction.
Also, we are in the process of integrating our members into the edict of the Data Protection Law of 2019 by NITDA. This is because we receive information that belongs to members of the public. We receive BVN, phone number, international passport, visa of the individual. These are the information and the edict demands that whoever is doing 2,000-10,000 information must be audited, must be certified by that agency; because if, tomorrow you are audited and certified by the agency and one of your client’s information is exposed and suspects the leak of his personal information is from your source, you can be liable to prosecution. So, we are telling our members to get on the platform. Then, there is sanction and Politically Exposed Persons’ (PEP) list. You know, Terrorist List; whereby we use one of our partner platforms, DataPro, to also go in. If you are PEP, for instance… not that politically exposed persons are criminals; you know it is because they are vulnerable. So, I would look at it and see… ‘This man is PEP o!, let me be cautious in doing the transaction with him. Like what we have been hearing now that people use financial institutions in terrorism financing, money laundering.
So, these are some of the things we put in place as an association to move our members to the digital mode of operations.
The latest revelation by the federal government on its war against insecurity in the country is that it has discovered that some of the sponsors of terrorism in Nigeria include BDC operators. What is your reaction?
Well, I don’t want to be subjudiced, because the matter is before the security agencies for investigation. Also, the government has spoken, through its SA Media that this is the report they have from the United Arab Emirate (UAE); reporting that this kind of activities is going on. Like I said, financial institutions are the most vulnerable; when it comes to terrorism and money Laundering financing. It is an evolving phenomenon. Every day, criminals develop processes to beat the system in order to perpetrate their nefarious acts. They even beat banks. This is why you have FIUs (Financial Intelligence Units) all over the world; and you know Nigeria’s position is a bit weak, generally, in terms of even the membership status. Yes, there was a time Nigeria was suspended because of so many lapses …
Like I said, the matter is under investigation and so, there isn’t much I can say on the issue…
When you heard the news that some of your members were involved, were you shocked? Deriving from this development, what measures is ABCON putting in place to prevent such from happening again?
First, my reaction: being an operator that also knows about the AML CFT structure I cannot be surprised because it is a global phenomenon. It happens everywhere in the world even in countries such as UAE. Which means, I shouldn’t be surprised if, it is happening in Nigeria; because it is a crime; and crime has no jurisdiction! More so, these are complex transactions that also demand complex structure to tackle.
So, when we heard it, of course as a leader, your members are being alleged to have been found in such a case; and especially, an act, which we have consistently warned members never to indulge in. So, we were shocked that, yes, our members have been found to be allegedly involved in such a crime; and it is a grievous allegation. Terrorism financing is grievous. So, definitely, you had to be shocked about that kind and level of allegation. So, based on that, we had to meet, go to the agency that invited our members and let them know ‘we are here…’ Our members came and some didn’t come back again; and their families are on our neck because their breadwinners, who went with us to honour the invitation did not return with us and so, they cannot see them. The agency has responded and informed them that, yes, their people are with them, but on charges based on financial transactions that are illegitimate and bordering on serious crime. They told us to be patient and allow them conclude their investigations. After that, we issued a press statement where we said, our members were invited and detained for AML CFT breach and the KYC status. We also supported any measures to be taken especially in view of the security situation in the country currently. We will support any measure the government will take to get rid of terrorism once and for all in the country. If that is what it will take to achieve that, why not; every right thinking Nigerian should support such strategy. Also, in that press statement, we appealed to the security agencies to expedite action so that while the guilty is duly punished for their crime, the innocent among them should be released to reunite with their families. Societies are built on the rule of law.
For us, therefore, it is still an allegation and one of the problems we have is the issue of clarification. In Nigeria, when they say you are a bureau de change, nobody wants to know whether you are licensed or not.
There is a big difference between licensed and unlicensed bureau de change. Licensed bureau de change is licensed by the Central Bank and registered with CAC. They carry out their obligation such as digitisation of their operations and also registered with the Federal Inland Revenue Service as required by the Law. We pay our Taxes. And we have offices. So, basically, there are varying degree of people on the FX transaction turf.
A group of forex dealers were recently identified by the Central Bank of Nigeria and described as forex fraud perpetrators. These particular forex dealers, who had their names published in the newspapers, have had their bank accounts placed on PND and investigation was reported to be ongoing on them. What do you have to say about the group? Do you have any relationship with them?
Let me explain to you what is really happening. All this drama is a bid to dominate the diaspora remittances. The inflow has stopped coming. So, people come together as corporate bodies, as you describe them. There are many of them that the CBN has shut them down. There was a time, the CBN also closed down the account of the lottery operators, because many of them were involved in money laundering activities. Lots of them like that… they form companies with corporate offices.
For the average Nigerian, any mallam selling dollar on the street, whether licensed or not, belongs to an ABCON, whose representative they know in the media to be one Aminu Gwadabe. So, how does the average Nigerian differentiates between a licensed BDC and an unlicensed one?
Like I said earlier, we have a problem of over generalisation, which has placed every bureau de change operator under the cover of ABCON. But there are clear differences. First, a BDC must have an office. So, this is our call to the public; please, do not patronise any bureau de change you see on the street. You want to buy or sell forex, ask the fellow to show you his office. If he has an office, when you get to his place, check for his certificates: CBN, CAC and every certificate approving his right to operate as a BDC. He must paste them all on the wall, for you to be guided.
Secondly, there are benefits in buying from licensed BDCs. We have these privileges of buying from the CBN window and this we do at a regulated price. With your complete documentation, the Licensed BDC will sell to you at a decent price and you will have a peace of mind. But you know in Nigeria, we have this culture that say, if you don’t do it the other way around, it is not sweet. Don’t also forget that there is the angle of the proceeds of corruption, which is much in the country and that is always chasing the dollar.
People, who loot money now convert their naira proceeds into dollar; so, they can be more portable to carry around or hide successfully. Every Nigerian has turned into a speculator. Why do you need to have a domiciliary account, when you don’t earn income in dollars?
Cuts in: But some receive dollars from relatives abroad
If you have anything to do with dollars, fine. So, the dollar that would have served the Nigerian travelling outside the country or a manufacturer, who would need it for his business, you hide in your house or keep in your Dom account.
So, back to what differentiate us from the unlicensed BDC, what I have just explained to you are some of the things that distinguish us from the forex fellow you meet on the street. This lack of clarity is actually our albatross and it is a big issue to us.
For some time now, you have been advocating to have a share of the payout window for the diaspora remittance dollars, to make it easier for Nigerians to send money home to their people. Recently, the CBN introduced the naira incentive to people sending money back home. Does that policy address your prayers?
No, it does not. The naira incentive for the dollar is still a bid to keep the money in the banking industry, because you are giving incentive to the receiver; an incentive of five naira, so that if the currency is not available you would not need to worry too much to disturb the bank. And what is the challenge in that policy… it is the liquidity challenge. One, the people opted for unregulated channels because of the fixed exchange rate regime versus the parallel exchange rate structure. No business person wants to go for less, everybody wants to go for the higher one. While the same product is selling at N395, in one place, it is selling at N495 in another market. That is a difference of N100. So, tell me, would you want to opt for the official window and leave this one because of N5?
This is the challenge! Availability is still an issue. Some of the bank charges are as high as six percent (6 per cent). For you to send money to your brother from abroad, you pay the banks as high as 6 per cent. And the reason is simple: Some of these unregulated channels do not have the kind of bogus structure the banks have. The banks’ overheads are high. These operators are operating in small offices as this; so, they can charge as low as 0.5 percent and still survive. So, you see, these are some of the problems and that is why we are advocating because, we have the reach, the network. Put all the banks together and they still cannot match the extent of our spread across the federation. This is why we need to be given the permission to be a payout agent.
So, if we are used as Payout Agents, the receiver will be more interested in negotiating the rates with the BDCs than the banks where you will be scared to talk, facing one very big oga in the bank wearing a very big tie with a stern look on his face. He will feel intimidated by the banks than with a regular guy like him negotiating the rate in a simple, modest office (laughs). And you can meet him anytime, seven days in a week, from morning to late in the evening unlike the banks.
So, for convenience, he would prefer to go to the BDC. Even the IMTOs (International Money Transfer Organisations) are more interested in having a relationship with the BDCs than with the banks, because they believe they will get real value; and we can even pay them in advance. Unlike what is happening now, where they have to wait until the money comes in before they get paid. The fixed market rate is the reason why the naira for dollar incentive may not really deliver its objective. That is why we continue to appeal to CBN to make us payout agents. We would not want to be involved in the rigour of opening accounts; yes, we would be integrated to banks. After all, there is no BDC who operates without a bank account because it is not possible to do so. You must have a bank account to do your transactions with the Central Bank of Nigeria. So, with this existing system and structure, integration becomes easier.
Can I send money to my child abroad through the BDC?
Definitely, you can do that. We have products that capture that. One of them I mentioned before we have Personal Travel Allowance (PTA), Business Travel Allowance (BTA), school fees payment, medical, mortgage. But the only issue we have is that we have limit. For school fees, our limit is $5,000 per quarter and you know some school fees can be as high as $20,000. Some schools in America, especially for courses such as medicine, their school fees run as high as $100,000. We have written to the CBN to see how they can expand this volume. For the Personal Travel Allowance, we are not allowed to do more than $4,000.
I remember during the Abacha regime, then; you can enter a Bank and buy $100,000 as Personal Travel Allowance. During that period, we had long-term stability of exchange rate; even in the parallel market.
During our pre-interview discussion, you said there are transactions that are legitimate but invalid by forex rules. In other words, according to you, you can bring goods into the country legally, but they are invalid. Could you please shed some light on this?
Yes, there are transactions that are legal but invalid. You can bring them into the country, pay duty. They are legal. But you cannot go to the CBN and buy the dollar to pay for the raw materials you have imported. They call it ‘Not Valid for FX’. The reason is, the Nigerian government wants those items developed here in Nigeria.
But why would the government allow them to be brought into the country when the CBN would not sell the forex the importers need for their business
What they mean by that is that some of the items are on the list of prohibited items that cannot be allowed to access dollars. But if they have their personal dollars, they can fund such import.
Now that CBN will not give dollars to some legitimate importers to bring in their goods, some are left with no option than to approach BDCs, other forex operators to bring in their goods. So, most are left at the mercy of these other operators. So, what is the relationship between forex operators and ABCON?
Number one, you can call them Mallam on the street bureau de change or Bank of the North Bureau de Change, or whatever name you may like to call it. They have been in existence even before the Central Bank of Nigeria.
The parallel market operators have been in operation even before the establishment of bureau de change which came into existence during the time of Babangida. So, it is a system that has been there; and because of the manner in which they operate on the street, that was why IBB, in his own wisdom, thought of licensing them. The idea is to give a more formal status so they can operate the platform well with decorum and decency. Make them have offices and structure. This explains the reason why they compete with the traditional ones with their style of operation. All the guy, who operates on such platform need is to wash his agbada and stay on the street; he doesn’t need an office or staff. They are cheaper and largely stay along the borders. What is worse, they do not need to know who you are; they just want your money.