SEC to Provide Enabling Environment for Commodity Trading to Boost Agriculture

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In a bid to boost agriculture and promote commodity exchange in Nigeria, the Securities and Exchange Commission (SEC) is set to roll out various initiatives to provide an enabling environment for commodities trading in the country.

The Director General of SEC, Mounir Gwarzo while delivering a Keynote address at a Training Seminar organized by Africa Exchange Holdings (AFEX) on Commodity Trading and Risk Management in Abuja said the Commission is reviewing the Warehouse Receipt Bill currently before the National Assembly and has assured that it will actively advocate its passage.

This he said is in support of the policy thrust of the Federal Government to encourage investments in the agricultural and solid minerals sectors in a bid to ensure economic diversification and deepen capacity across the agricultural value chain.

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.

The DG said “We believe this can be achieved by implementing the following strategic initiatives: Build a supporting and functional ecosystem for commodities trading;

“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”.

He said Nigeria pursues policies aimed at diversifying the economy, creating jobs and hastening socioeconomic development, it is becoming increasingly clear that Commodities Exchanges can play a crucial role in actualizing these lofty objectives as 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.

Gwarzo said Countries that were part of the study are also emerging countries with the most vibrant commodities markets such as India, Brazil, China, Malaysia and South Africa. Among the many insights in study’s 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).

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