Why we are Developing Commodities Trading Eco-System- SEC
By Ngozi Onyeakusi — In its avowed determination to further deepen the capital market and have a vibrant commodities exchange, the Securities and Exchange Commission is set to hold a roundtable on the commodities Trading Eco-system.
According to the Acting Director General of the SEC, Ms. Mary Uduk, the Roundtable which is scheduled to hold on October 3, 2019 in Lagos with the theme: ‘Building a strong Commodities Trading Ecosystem for Inclusive Economic Development’ is expected to convene industry experts, policy makers and thought leaders to have discussions to further develop the commodities market in Nigeria.
Uduk said the objective of the roundtable is to obtain the buy-in of policy makers and agencies of government and to get perspectives of stakeholders towards encouraging investments and get more participation in the commodities market.
According to Uduk, “The Capital Market Master Plan did an analysis of where we are and where we want to be as the leading capital market in Africa and one of the areas is the Commodities market which is very important, but one of the least developed. The Nigerian economy is mainly agrarian driven, all states of the federation have exportable quantities of commodities and we have some of the highest grades in the world.
“Government wants to diversify to agriculture and so we need to be able to export some of these commodities. If the farmers do very well, the earnings of the country will be boosted” She said.
She disclosed that these commodities can be exported, while on the other hand industries can be set up that will employ a large number of our teeming population.
“If we can develop this very well, our country will be better for it. What we need now are better pricing, transparency and better quality and these are what we set to achieve with the farmers and that is why the Commodities Exchange is important.
“The crude form they are trading now does not provide the farmers the benefit of price discovery, transparency among others. The only way to achieve these is to have an exchange hence the need arose to set up the Technical Committee to look holistically at all the issues, the nation needs to harness the full potentials in the Commodities market.
According to her, the aim of SEC is to have an efficient commodities exchange because right now that sector of the capital market is dormant and that is why the Commission is leading other capital market stakeholders on capacity building and public enlightenment campaigns.
“We have already commenced capacity building for stakeholders and the public on commodities exchange to bridge the current knowledge gap to ensure we reap the benefits of trading in commodities, all these are part of the implementation of the report of its Technical Committee on Commodities Trading Ecosystem” she said.
Some of the topics to be discussed at the roundtable include, enabling environment for functional commodities trading system, developing a thriving commodities market: success stories from Africa and Emerging economies and Private sector involvement: Key to a strong commodities trading system.
Recall that the Commodities Trading Ecosystem committee’s report, published on SEC’s website, contains no fewer than 40 recommendations on how to have an efficient commodities exchange.