Bureau de change operators hail Nigeria decision on JP Morgan

Bureau de change operators hail Nigeria decision on JP Morgan

By Tunde Osho

The Federal Government’s move to open talks with JPMorgan Chase & Co. for their reinstatement in the local-currency emerging-market bond index has been described by the Association of Bureaux De Change Operators of Nigeria (ABCON) as a plan that will bring great benefits to the economy.

Reacting to the development, ABCON President, Alhaji Aminu Gwadabe in a statement at the weekend that JP Morgan’s return to the Nigerian market would strengthen the inflow of foreign exchange (forex) in the country and also boost the Central Bank of Nigeria’s (CBN’s) chances of achieving its $60 billion foreign reserves target in 2018 in spite of any shock that may arise in the economy.

The ABCON boss said such return would also enable Nigeria benefit from the $20 billion overseas investment planned by the US bank which will see it raise wages, hire more, and open new branches in emerging market countries.

Gwadabe added: “I want to use this opportunity to congratulate the CBN and the Federal Government on the good news of JP Morgan renewed interest on Nigerian bond market which will enhance investors’ confidence on our economy.

“The CBN has brought stability in the forex market by making dollar available to genuine forex users especially at the retail-end of the market. That has ended volatility in the market and boosted the confidence of foreign investors in the local economy.”

He also praised the CBN for introducing the Investor’ and Exporters’ (I&E) Forex Window which has since April 2017 attracted over $27.8 billion in turnover into the economy and brought about transparency as well as stability in the forex market.

The ABCON boss said the US Bank’s return to Nigeria would enable the government access needed funds for infrastructural developments in the economy and urged the CBN to explore the opportunity in reducing the multiple exchange rates and create more confidence for foreign investors.

“It will create more opportunity for a genuine and transparent competition among forex operators and boost employment opportunities in the country as well as deepen the forex, naira and the equities markets,” Gwadabe said.

The federal government is presently selling more foreign debt to help reduce the financing burden from paying double-digit yields on local-currency bonds. That would help free up funds to increase investment in infrastructure and spur economic growth.

“We would like to get back into the JP Morgan Index,” the Director-General of Debt Management Office (DMO) Ms. Patience Oniha, had said.

Daily trading volumes for the naira have risen to about $200 million from as little as $20 million three years ago, according to Standard Chartered Plc. That bodes well for discussions on returning to the index, according to Oniha. “The securities trading were never the problem, it was always the foreign-currency liquidity which has now improved,” she said.