Economy
The Federal Government on Thursday emphasised the need for a vibrant commodities trading ecosystem to boost foreign exchange and government revenue, and reduce emphasis on crude oil.
The Vice President, Prof. Yemi Osinbajo, made the declaration at a Roundtable on Nigerian Commodities Trading Ecosystem held by the Securities and Exchange Commission (SEC) in Lagos.
Osinbajo, represented by Dr Yemi Dipeolu, Special Adviser to the President on Economic Matters, said that a vibrant commodities trading ecosystem remained paramount due to the country’s abundance in natural resources.
He said that the emphasis should be in the agricultural sector, where the country had a comparative advantage, as well as in solid minerals and oil and gas.
Osinbajo said the federal government attached great importance to an active and vibrant capital market which would contribute to national growth and development.
He said that in order to achieve this objective, “the capital market has to operate at an optimum level, which is why the implementation of the 10 year Capital Market Master Plan remains a key priority.”
“Agriculture accordingly occupies a pride of place in Federal Government policy, as stated on numerous occasions by the President and as articulated in the Economic Recovery and Growth Plan.
“The importance of agriculture was underscored during the last recession, as its growth then of about three to four per cent prevented a steeper decline.
“Agriculture is also important for food security and as a means of generating a quick production response.
“The agricultural sector is also important for job creation and employment, and for producing the raw materials that go into agro-processing.
“Indeed, the subsisting Agriculture Promotion Policy specifically aims to integrate agricultural commodity value chains into the broader supply chain of Nigerian and global industry”, Osinbajo said.
According to him, a vibrant commodities trading ecosystem is therefore essential to underpin agricultural transformation in Nigeria, as organising production in the agricultural sector would ensure that every part of the value chain contributes to its growth.
In her welcome address, SEC Acting Director-General, Ms Mary Uduk, said the commission was collaborating with all relevant stakeholders to implement the 10-year Capital Market Master Plan with the aim of making Nigeria’s capital market one of the world’s deepest and most liquid in Africa by 2025.
Uduk said that one of the crucial initiatives of the plan was to develop a thriving commodities trading ecosystem.
“Nigeria is well-endowed in agricultural, metals and energy commodities.
“Currently, our potential as a nation is grossly underutilised in the area of commodities. There is therefore the need for these commodities to be efficiently harnessed to the benefit of our consumers, industries and governments.
“We believe that if we can develop and institutionalise a vibrant commodities trading ecosystem in Nigeria, we can substantially address problems such as lack of storage, poor pricing, non-standardisation, low foreign exchange contribution affecting our agriculture and other commodities sub-sectors”, Uduk said.
She said that the roles of commodity exchanges were very critical, as they brought price transparency and value addition to farmers.
Uduk explained that commodity exchanges ensure quality products for buyers, provide investment opportunities across the value chain and provide additional class of asset for investors, among others.
The director-general said the nation still had the challenging task of transitioning from a grossly informal commodity trading system to one consummated on the platforms of commodity exchanges.
”Currently, the transactions through commodity exchanges are insignificant compared to what take places in the informal markets, even among industrial commodities users.
“In laying down the foundations of our formal commodities market therefore, we have to ensure that the spot commodity market is efficient as we move into the future’s market,” Uduk said.
According to her, this will entail a robust education and enlightenment process, continuous engagement and cooperation among key stakeholders, favourable government policies and strengthening of legal and regulatory frameworks.
Gov. Babajide Sanwo-Olu of Lagos State said that commodity trading was crucial for economic growth and development, noting that the nation’s economy over the years had been over-dependent on oil.
Sanwo-Olu, represented by Dr Rabiu Olowo, Commissioner for Finance, said the commodities trading ecosystem would provide economy stimulation, diversification and growth.
“If you want to build a great momentum, government and other players, stakeholders including regulators and private sector must all commit to working together in a more coordinated and integrated way,” he said
Sanwo-Olu said that a good commodity trading ecosystem would drive inclusive implementation of Nigeria’s economic agenda.
“The commodities trading ecosystem have a strong potential to unlock progress across multiple sectors of our economy,” he said.
The governor said that the trading ecosystem had been neglected for many years, but its benefits could not be ignored.
Sanwo-Olu said that a lucrative trading ecosystem would boost economic diversification and growth, employment, financial inclusion and make investment in commodities more attractive to foreign investors. (NAN)
-Oct 3, 2019 @17:50 GMT |
Tags: govt revenue — Osinbajo Vibrant commodities trading ecosystem will boost foreign exchange
