The Securities and Exchange Commission (SEC) is promoting the trading of agricultural produce and solid minerals on the capital market as part of efforts to bolster the Federal Government’s actions in diversifying the economy.
Its Acting Director-General, Mary Etuk, at a briefing in Abuja, on the forthcoming International conference on Nigeria’s commodities market, said 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.
“Despite this potential of the sector to deliver on these important metrics, credit to the sector has remained less than five per cent of bank lending for the past 10 years severely hampering its development. The capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products.
“This is also true for Nigeria’s abundant minerals, especially the solid ones. Many of these minerals are 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 economy.
“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. It will also provide price discovery to market participants – producers and consumers alike – leading to efficiency and better decision making,” she said.
According to her, the three commodities exchanges in Nigeria backed by robust public participation from key stakeholders, notably financiers, donors, public stakeholders and government officials, and international commodity exchanges as well as the larger retail investment community could unlock more capital in the short-to-medium term.
“These important points and benefits have dictated the Commission’s decision to host the International Conference on the Nigerian Commodities Market (ICNCM 2020), with the theme ‘Commodities trading ecosystem: Key to diversifying the Nigerian economy’”.
Chairperson, Marketwide Technical Committee on Community Trading Ecosystem, Daisy Ekine, said the commodities to be introduced by the committee spread across agriculture, metal, crude oil, and solid mineral.
“The committee is an off-shoot of the capital market master plan on community ecosystem review and we will begin with agriculture produce as the lowest hanging fruit.
“ICNCM 2020 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,” he said
Source: The Nation