The Association of Bureaux De Change Operators of Nigeria (ABCON) has called for elimination of fuel and foreign exchange subsidies in order to address structural defects in the economy.
The association made this call in its quarterly economic review report for the second quarter of the year (Q2’19), stressing that these subsidies represent structural defects in the nation’s economy.
Speaking at the presentation of the report, ABCON President, Alhaji Aminu Gwadabe, said: “The subsidies are misapplications which have resulted into creation of economic rents in various dimensions, as well as maladjustments in sectoral business structures creating hyper unemployment rates which have triggered unmanageable social unrest like kidnappings, terrorism, banditry, arm robberies and large scale cultism etc.
“We recommend that government should consider the following: Policy of single exchange rate to completely remove foreign exchange economic rent and subsidy for a medium and long term adjustment of the economy from distortions occasioned by decades of subsidy. We must observe that we have an inefficient structural system to track surreptitious flow of foreign exchange within the platforms notwithstanding, that the morals to control are lacking.
“This head of a hydra of fuel subsidy issue should be addressed headlong by critically reorganizing the sub sector including deregulation and decentralization of fuel importation to ensure competition which is necessary to guarantee fair price”.
Stressing the need to tackle the challenge youth and graduate employment, ABCON called for an extension of the National Youth Service Corp (NYSC) period from one year to two years, with provision to allow discharge after one year if employment is secured.
The association commended the Federal Government for signing the Africa Continental Free Trade Agreement (ACFTA) but called for measures to enhance the competitiveness of local industries to maximise the benefits of the Agreement for the economy.
The body also welcomed the proposed consolidation of the banking sector with new minimum capital requirements, describing it as, “a necessity that will help in reducing the impact of Non Performing loans on Capital Adequacy Ratio of banks and thus enhance their capacity to lend to the economy.”
Speaking on ABCON’s efforts to enhance stability in the foreign exchange market Gwadabe said that the Association will leverage on its partnership with the Nigerian Diaspora Commission to harness the potential of the Diaspora remittance to enhance foreign exchange inflow and economic development.
He added that the association will explore partnership with the Lagos Commodities and Futures Exchange (LCFE) recently granted approval-in-principle by the Securities and Exchange Commission (SEC), to articulate plans for floor membership and currencies trading on the exchange.
“As LCFE will be trading on four broad ranges of assets which are agricultural commodities, currencies, solid minerals and oil and gas, BDC’s are well positioned to jumpstart the currency floor of the exchange. The economy will benefit from the development if given necessary support and approvals by the regulatory bodies,” he said.