Lagos Commodities and Futures Exchange (LCFE) has urged the Federal Government to utilise the commodities exchange ecosystem as a strategy to boost food security, create job opportunities and enhance Nigeria’s capacity to earn foreign exchange (FX).
Speaking at a media interactive session in Lagos on Wednesday, Akin Akeredolu-Ale, Managing Director and Chief Executive Officer, LCFE commended the efforts of the Federal Government in addressing the issue of food security but explained that government could achieve better if commodities exchanges were involved in the processes.
He said: “Commodities Exchanges connect smallholder farmers in rural areas to large markets. This increases earning income capacity, a key aspect of household food security. They facilitate food storage through their warehouses. Through warehouse receipts smallholder farmers can access imput loans to purchase fertilisers and other materials. Commodities exchanges reduce default risks in trading and encourage investment in food systems and they manage price risks in food system by offering future trading. They disseminate market information that enhances They have capacity to promote competition, reduce transaction cost and make food available amongst others”.
“The Nigerian economy is experiencing a food crisis with the fast-rising food costs, cost of transportation, insecurity, poor infrastructure, and foreign exchange instability. All these have affected the ability of commodity stakeholders to successfully produce food and transport it to where it’s needed. Therefore, its commendable to note that Mr President, his administration and the executive governors of Niger State, Mohammed Umar Bago and the Executive Governor of Lagos, Governor Babajide Sanwo-Olu have taken strong decisive steps to securing our Nation’s food supply chain. In Lagos State, the launch of the Lagos Rice Mill, the largest rice mill in Africa and the third largest rice mill in the world commenced operations in 2023 and has produced over 100,000 bags of rice in 2023. The mill’s products rival any global rice brand being imported into the country with their quality, taste and colour.”.
“Lagos Commodities and Futures Exchange since receiving its license in 2019. has propagated the need for the investing community to focus on the Commodities Ecosystem as not only the next Gold mine but a route to driving the GDP of the economy from single digit to double digits. LCFE has called for attention to the Commodities Ecosystem as a $1 trillion economy, rich in Agricultural, Oil and gas and Solid mineral commodities,’ Akin Akeredolu-Ale said.
Recently. a four-part Memorandum of Understanding (MoU) on sale and purchase of Paddy Rice was signed by LCFE, with Niger Food Security Systems & Logistics Company Limited (NIGER FOODS), Lagos State Rice Company Limited (LASRICO) and Commodity Tradenet Limited, a Special
Purpose Vehicle of LCFE.
Akeredolu-Ale, commended the Securities and Exchange Commission (SEC) for its supportive roles in approving trading on various asset classes on LCFE.
“LCFE is the first Exchange in Nigeria to list and trade physical Gold coins called “Eko Gold Coins ” in 2022. Since that time, the Exchange has traded over N66 million worth of Gold through registered Commodity brokers on its Exchange. This novelle digital asset allows investors invest in as little as 1g of Gold coin which listed at 42,500 at initial listing and closed at 65,000 per gram at the end of February 2024.
“The Exchange has made notable strides in the past few months with the signing of the MOU with the Lagos State Government for the development of the rice mill and the operationalisation of the Rice Mill. Through this partnership, the mill has received over 10,000 Metric Tonnes of Paddy in 2023. The Exchange’s goal is to improve supply to the mill Tenfold in 2024.
” LCFE kicked off the year 2024 with a series of agreements geared towards the development of the Commodities Ecosystem.Some of these agreements include the National Coconut Development and Propagative Initiative (NATCODEV) for the growth of the Coconut Value Chain. The Exchange is also working on a proposal for a new rice mill will be coming on stream in the coming months to drive further development in the rice value chain.
Commodities Exchanges are known to contribute to the stability and price discovery of the Commodities ecosystem of their economy and LCFE has shown significant contributions with plans to dramatically contribute to the introduction of structured financing with the help of the capital market.”, said Akeredolu-Ale
