Osinbajo: Vibrant Commodities Exchange will Improve FX Earnings

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Ndubuisi Francis in Abuja

Vice-President Yemi Osinbajo has expressed the need for the development of a vibrant commodities trading ecosystem as a necessary ingredient to diversify the economy away from crude oil in order to guarantee improved government revenue and foreign exchange earnings.

Osinbajo spoke at a roundtable on Nigerian Commodities Trading Ecosystem held by the Securities and Exchange Commission (SEC) in Lagos, Thursday.

Represented by Dr. Adeyemi Dipeolu, the Special Adviser to the President on Economic Matters, Osinbajo said the Commodities Trading Ecosystem was of paramount interest because Nigeria has an abundance of natural resources and accordingly a comparative advantage in agriculture, solid minerals and oil and gas, hence emphasis on the agricultural sector in the immediate term.

A statement from SEC quoted Osinbajo as saying that the federal government attaches great importance to an active and vibrant capital market which will contribute to national growth and development.

He said 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.

The vice-president said: “Agriculture accordingly occupies a pride of place in federal government’s 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 added that 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, the acting Director General of the SEC, 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 as well as the largest in Africa by 2025.

One of the crucial initiatives of the plan, she said, is to develop a thriving commodities trading ecosystem, adding that 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 benefits 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-standardization as well as low foreign exchange contribution affecting our agriculture and other commodities sub-sectors,” she said.

In achieving this, Uduk said the roles of commodity exchanges are very critical as they bring price transparency and value addition to farmers; they ensure quality products for buyers, provide investment opportunities across the value chain, provide additional class of asset for investors and help diversify the nation’s economy in line with the current administration’s agenda.