In December 2015, the Central Bank of Nigeria issued a circular that prohibits trading of dollars and other foreign currencies on the streets.
Although CBN did not explain much on how it will work with the aggressive mallams, such orders strongly state that beginning on the first day of 2016, trading dollar on the streets is strictly prohibited and punishable by the bank.
“In the same manner, such act can also be a basis for the cancellation of BDC License once found to have transaction with any street trader of foreign currencies”, the CBN said.
But in spite of the orders of the Central Bank of Nigeria to put an end to this illegitimate foreign exchange trading, “mallams” are really persistent as they continue doing it up to now.
In visiting Lagos, Nigeria’s commercial capital, forex-trading centres can be observed for not putting into action the orders of CBN.
In Alade Market in Allen Avenue, which is known for having attractive rate for dollars, the mallams are really very visible on the streets. They are holding their calculators, while whispering prices and making deals with potential buyers.
During an interview, one of the mallams told TheCable that they make dealings such as selling dollars at 258, while buying at the rate as low as 250, even against the orders of CBN on the matter of bank verification number (BVN).
This scheme is also common in Yaba market. Mallams usually stand on the bus-stop and usually approach people whom they think want to sell or buy dollars.
In accordance with the rule of forex trading, the Central Bank of Nigeria increased the financial requirements for BDCs. Effecting January 1, 2016; the financial requirements will be raised to N71.45 million.
As prescribed in the circular known as “Revised operational guidelines for bureaux de change in Nigeria”, BDC needs to comply a financial requirement of N71.45 million deposits with the Central Bank of Nigeria, to make their operation valid in 2016.
“Minimum paid-up share capital of N35 million, non-refundable application fee of N100,000, non-refundable licensing fee of N1 million, mandatory caution deposit of N35 million, non-refundable annual licensing renewal fee (payable not later than30 days after the end of each calendar year) of N250,000 and non-refundable change of name fee of N100,000.”
But in spite of these guidelines, the action of CBN to control the influx of currency traffickers popularly known as “Mallams”, still remains to be undecided.