BDC Operators Advocate Economic Partnerships with India, China Amid U.S. Tariff Hike on Nigerian Exports

The Association of Bureau de Change Operators of Nigeria (ABCON) has urged the Nigerian government to explore strategic economic partnerships with countries like India, China, and other African markets. This call follows the imposition of a 14% tariff on Nigerian exports by former U.S. President Donald Trump, which has worsened liquidity challenges and foreign exchange instability in Nigeria. Dr. Aminu Gwadabe, President of ABCON, emphasized the importance of diversifying Nigeria’s foreign exchange sources beyond its heavy reliance on petro-dollar revenues.

Dr. Gwadabe noted that Nigeria’s mono-cultural economy, heavily dependent on oil exports, needs to pivot toward partnerships that could bolster other sectors. He particularly advocated for increased trade with countries such as India, China, and African nations to enhance Nigeria’s export base and reduce the economic vulnerabilities that come with a reliance on a single commodity. He believes that such partnerships could contribute significantly to the nation’s economic resilience.

To mitigate the impact of the tariff hike and stabilize the foreign exchange market, ABCON called for a more targeted approach from the Central Bank of Nigeria (CBN). Dr. Gwadabe recommended that the CBN ensure commercial banks channel their interbank proceeds to Bureau de Change operators, which would help address foreign exchange volatility. He also acknowledged the CBN’s proactive measures, such as the $197.71 million intervention in the market, but expressed concerns about the long-term effects of the tariff, particularly on Nigeria’s competitiveness in the U.S. market.

The U.S. tariff hike has led to further depreciation of the Naira. On Monday, the official exchange rate reached N1,629 per dollar, a notable drop from previous rates. In the parallel market, the Naira showed some resilience, trading at N1,555 per dollar, a slight improvement over the prior days. Dr. Gwadabe also urged the CBN to extend liquidity injections to the retail segment to support small businesses and reduce pressure on the Naira, which continues to face challenges despite efforts to stabilize the economy.

Source: Naira metrics