Director General of SEC, Mounir Gwarzo disclosed this while delivering a Keynote address at a training seminar organized by Africa Exchange Holdings (AFEX) on Commodity Trading and Risk Management in Abuja.
He told the audience that Nigeria is currently pursuing policies that would hopefully diversify its economy, create jobs and hasten socioeconomic development, and that at the heart of this commitment is the need to build commodities exchanges that can play crucial role in actualizing set objectives. He said a detailed empirical study by the United Nation’s Conference on Trade and Development (UNCTAD) analyzed the impact of commodities exchanges on development in emerging markets.
Countries that participated in that study include emerging countries with the most vibrant commodities markets such as India, Brazil, China, Malaysia and South Africa.
The SEC boss maintained that among the many insights in the report is the fact that commodities exchanges play a central role in facilitating economic development especially by helping farmers to enhance their marketing and risk management capacity (such as reducing their exposure to price and other production risks).
Nigeria is a key producer of key exportable agricultural products, commodity ranks number one in global export rankings for commodities such as kolanut, shea nuts and shea butter, cassava, and yams and also feature in top exporters for other commodities such as cocoa, rubber, oil palm, cashew and sesame seed.
Yet its Commodity Exchange is today almost comatose and is waiting outcome of discussions among authorities for the Nigerian Sovereign Investment Authority to begin moves to revitalize it for onward privatisation.
“Our ginger is reputed to possess the best aroma in the international markets. Export opportunities also exist for a wide variety of other agricultural commodities. This simply magnifies the potential of our agricultural sector to contribute significantly to economic growth and development” he said.
The DG said that considering the important role commodities exchanges will play in advancing Nigeria’s economic diversification goals, the capital market community has taken steps to prepare the stage for vibrant commodities exchanges to emerge in the country.
Gwarzo commended Afex for organizing the seminar and assured that the SEC will support any laudable initiative aimed at enhancing the capacity of the Capital Market to develop a robust ecosystem for commodities to thrive.
He said the 10-year capital market master plan which the Market is currently implementing is the blueprint for the growth and development of the market over the next decade and acknowledges commodities exchanges as critical for enabling investment diversification, risk management, price discovery and transactional efficiency and expressed strong belief that to boost Nigeria’s competitiveness, a thriving commodities trading ecosystem must be developed.
“We believe this can be achieved by implementing the following strategic initiatives: Build a supporting and functional ecosystem for commodities trading,” he stated.
“Others are: Build Centre of Excellence in areas of comparative advantage such as for oil & gas, cocoa, etc Develop efficient commodities exchanges and trading platforms, Sponsor legislation to ensure Nigeria’s crude oil sales are traded on local exchanges and build capacity in commodities trading at the SEC and among market operators”.
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