SEC DG Advocates Structured Commodities Exchange for Local Participants

The Acting Director General of the Securities and Exchange Commission (SEC) Mary Uduk has called for a structured Commodities Exchange that would cater for the needs of local particpants.
The SEC stated this in a media briefing ahead of the forth coming International Conference on Nigeria’s Commodities Market slated for Abuja next week.
“A structured market for commodities will provide a fairer playing field for local market participants, while providing the required infrastructure for the international market to be exposed to Nigerian commodities”, she said.
She also stated that the platform will provide price discovery to market participants, producers and consumers alike leading to efficiency and better decision making.
Uduk noted that Nigeria has abundant minerals, especially the solid ones, but lamented that many of these minerals are presently dug up on a subsistence basis and sold in markets around the world in disorderly fashion.
“It is high time we created a market where they would be traded in an orderly manner, to the benefit of the Nigerian economy”, she said.

While applauding the Federal Government’s actions in diversifying the Nigerian economy and moving the country away from an overreliance on one commodity, she posited that agriculture remains an important part of that plan holding the potential of delivering on the country’s food security needs, providing jobs and increasing our foreign exchange earnings.
According to her, despite the potential of the sector to deliver on these important metrics, credit to the sector has remained less than 5% of bank lending for the past 10 years severely hampering its development, adding that the capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products.

The three existing commodities exchanges in Nigeria backed by robust public participation from key stakeholders notably financiers, donors, public stakeholders’/ government officials, and international commodity exchanges as well as the larger Nigerian retail investment community can unlock a vast amount of capital in the short to medium term. These important points and benefits have dictated the Commissions’ decision to host the International Conference on the Nigerian Commodities Market 2020 with the theme “Commodities Trading Ecosystem: Key to diversifying the Nigerian Economy.” ICNCM2020 will gather relevant stakeholders in the commodities ecosystem to consider the most pertinent issues in growing the ecosystem in Nigeria, with the end goal of creating an enabling environment for the deployment of innovative solutions that improve processes, products, productivity, and the partnerships available in the market as well as enable investors to access various investment opportunities across the value chain.

We therefore invite all stakeholders to join us at the conference; bringing their ideas, thoughts and perspectives to the discourse of how we can build a robust commodities market in our dear country, Nigeria.

In her remarks, Chairperson of the Market Wide Technical Committee on Commodities Trading Ecosystem, Ms. Daisy Ekine, said the technical committee met severally, wrote its report and looked at the challenges of the commodities ecosystem, the benefits of strengthen the ecosystems and made about 30 recommendations.
“The recommendations were actually implemented in four difference phases. One of the recommendations was that, there should be a stakeholders’ engagement and that means that every stakeholder in the commodities ecosystem must be part of it.
“What we plan to do on Monday 16 March,2020 is to hold a conference on the Commodities trading ecosystem which is still part of that stakeholder engagement, but we have done quite a lot on the stakeholder engagement not that is not enough but quite a lot” She said.
Ekine said commodities does not only include agriculture but also solid minerals but added that the Committee decided to start with agriculture and with time gravitate into trading solid minerals and the metals and the oils and ultimately expects the exchanges to trade in crude oil and other natural gas in the near future.