By Mahmud Aminu Hanga
Introduction
The WAPA Forex Market, located in the Fagge quarters of Kano State, stands as a critical pillar of Nigeria’s financial landscape. Recognized as one of the largest informal currency exchange markets in West Africa, WAPA is not just a center of currency trading but also a testament to the region’s rich economic heritage.
This article explores the origins of WAPA, its influential figures, operational dynamics, and its potential role in resolving Nigeria’s forex challenges and competing with Lagos’s forex market.
Historical Background: The Genesis and Evolution of WAPA
The story of WAPA Forex Market begins with Alhaji Mahmud Alhassan Dantata popularly known as Mamuda Dantata or Mamuda WAPA, a visionary entrepreneur and politician. In the early 1950s, Dantata reclaimed a swampy area in Fagge quarters, transforming it into a thriving commercial center. His achievements extended beyond land reclamation; he revolutionized pilgrimage transportation by founding the West African Pilgrimage Agency (WAPA) and introduced chartered flights from Kano to Saudi Arabia.
Dantata’s innovative spirit not only shaped the pilgrimage industry but also laid the groundwork for WAPA to evolve into a bustling forex trading hub. His dedication to economic advancement and financial innovation established WAPA as a symbol of opportunity and growth in Kano.
WAPA’s history mirrors that of other forex markets, starting with small-scale currency exchanges. The introduction of Alhaji Cherno Baila Wan into the forex trade in Kano in the late 1940s, initially in Yalleman, was pivotal. His move to Kano, where he supplied foreign exchange for WAPA and traders like Mamuda Dantata, solidified his influence. His work laid the groundwork for subsequent generations, with notable figures such as the Habibu Fari family furthering the market’s growth.
➢Mamuda WAPA’s Legacy and the Birth of Currency Trading
Mamuda Dantata’s influence is deeply embedded in WAPA’s legacy. His expansion into currency trading transformed WAPA from a modest trading post into a major financial center. Today, WAPA Forex Market handles billions of naira daily, serving as a vital engine for local and international trade.
The market’s success is a tribute to Dantata’s pioneering vision and his contributions to the economic infrastructure of Kano. His legacy endures through the market’s continued success and its role in regional economic development.
➢The Role of Prominent Traders: Alhaji Cherno Baila Wan, Alhaji Habibu Fari and the Fari Family amongst others
The impact of WAPA Forex Market is also attributed to influential traders like Alhaji Cherno Baila Wan and Alhaji Habibu Fari from Yalleman (Located 24 kilometers from Hadejia Local Government Area in Jigawa State and 154 kilometers from Kano State) amongst others.
Pioneers like Alhaji Cherno Baila Wan and the Habibu Fari family have played a pivotal role in establishing WAPA as a key hub for forex trading activities. Both Families were Fulani migrants from Futa Toro in Senegal became Nigerian citizens after fighting against the British colonial invasion at the Battle of Bormi in July 1903. As a result of the battle’s aftermath, many of these migrants settled in Hadejia, as well as other regions such as Niger, Chad, Sudan, and Medina in the Hejaz.
Cherno’s early initiatives brought recognition and trust to the market, drawing influential businessmen to rely on him for currency exchange needs.
The Habibu Fari family, following Cherno’s footsteps, expanded the business, integrating it into the broader economy and helping WAPA become a key player in Nigeria’s forex trade.
Fari’s expertise and ethical approach have been instrumental in shaping WAPA’s reputation. His family’s dedication to professionalism and community welfare has fostered a culture of trust and integrity in the forex trading community.
The Fari family’s role extends beyond financial contributions; they have significantly impacted social welfare and religious harmony in Northern Nigeria. Their legacy underscores the market’s role in promoting ethical business practices and contributing to regional development.
➢Current Operations and Market Capacity
WAPA Forex Market is a major player in Nigeria’s currency trading sector, characterized by its diverse vendor base and substantial transaction volume.
Vendor Dynamics
- Registered Vendors: Approximately 500 to 800 vendors are officially registered, adhering to regulatory standards and engaging in significant transactions.
- Unregistered Vendors: The market includes 1,000 to 1,500 unregistered vendors, contributing to the informal economy with smaller-scale transactions.
BDC License Holders
The Bureau De Change (BDC) was officially licensed in 1989 to cater to smaller foreign exchange users and to broaden the officially recognized forex market. Exchange rates within the BDC are determined by market forces. The parallel forex market has been operational since the era of exchange control. - Registered BDCs: Around 50 to 70 Bureau De Change (BDC) license holders operate within WAPA, facilitating regulated currency exchange and maintaining market stability.
➢Economic Impact - Transaction Volume: Daily transactions range from ₦10 billion to ₦20 billion, highlighting WAPA’s significance in the forex market.
- Employment: The market supports 10,000 to 15,000 individuals, including vendors and ancillary service providers.
- Economic Contribution: WAPA’s activities stabilize the naira and influence exchange rates, supporting various sectors and contributing to regional economic health.
- Government Revenue: Registered vendors contribute ₦1 billion to ₦2 billion annually to government revenue through fees and taxes.
➢Challenges Facing WAPA Forex Market
Despite its success, WAPA Forex Market faces several challenges:
- Regulatory Compliance: The informal sector presents difficulties in enforcing regulatory standards and maintaining market integrity.
- Currency Volatility: Fluctuations in exchange rates create instability and impact businesses, especially in the informal sector.
- Liquidity Issues: Periods of low liquidity and limited access to foreign currencies affect transaction smoothness.
- Security Concerns: The risk of theft and fraud, combined with inadequate security infrastructure, poses significant challenges.
- Operational Challenges: Limited technology adoption and outdated market infrastructure impact efficiency.
- Economic Impact and Inflation: Inflation and economic uncertainties can destabilize the forex market.
- Regulatory and Policy Changes: Frequent policy shifts and compliance costs create uncertainty and disrupt operations.
➢Recommendations for Modernizing WAPA Forex Market
To enhance WAPA Forex Market’s efficiency and impact, the following steps are recommended: - Strengthen Regulatory Framework
- Formalize informal vendors with simplified registration and incentives.
- Increase oversight and compliance checks for all vendors.
- Improve Market Infrastructure
- Integrate advanced trading technologies and modernize physical infrastructure.
- Enhance security systems and market facilities.
- Enhance Liquidity Management
- Establish liquidity support programs and diversify currency offerings.
- Strengthen Security Measures
- Implement anti-fraud measures and upgrade security infrastructure.
- Facilitate Technology Adoption
- Provide training and support for technology adoption and digital platforms.
- Enhance Market Transparency
- Improve access to market data and publish regular market reports.
- Promote Financial Inclusion
- Expand financial services to underserved vendors and support SMEs.
- Regulatory and Policy Alignment
- Advocate for consistent regulatory policies and engage stakeholders.
- Environmental and Social Responsibility
- Encourage sustainable practices and community engagement initiatives.
Conclusion
WAPA Forex Market epitomizes Kano’s economic vitality and entrepreneurial spirit. By addressing its challenges and embracing modernization, WAPA has the potential to become a pivotal player in Nigeria’s forex market. Its strategic development could significantly contribute to solving Nigeria’s forex issues and provide robust competition to the Lagos forex market. Through investment in infrastructure, technology, and regulatory improvements, WAPA can solidify its position as a leading financial hub, ensuring its legacy for future generations.