Ndubuisi Francis in Abuja
The Acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, has lamented the poor bank lending to the agricultural sector in spite of its vast potential of delivering on the nation’s food security needs, job creation and increasing foreign exchange earnings.
Uduk regretted that despite the sector’s enormous potential to deliver on these important metrics, credit to it has remained below five per cent of bank lending for the past 10 years, thereby severely hampering its development.
Uduk, who spoke in Abuja, yesterday at a press briefing on the forthcoming international conference on Nigeria’s commodities market, stressed that the capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products.
Uduk said: “It is necessary, first, to recognise and applaud the federal government’s actions in diversifying the Nigerian economy and moving us away from an overreliance on one commodity.
“Agriculture remains an important part of that plan holding the potential of delivering on the country’s food security needs, providing jobs and increasing our foreign exchange earnings. Despite this potential of the sector to deliver on these important metrics, credit to the sector has remained less than five per cent of bank lending for the past 10 years severely hampering its development.”
Noting that the capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products, she observed that this is also true for Nigeria’s abundant minerals, especially the solid ones.
Many of these minerals, she noted, are presently dug up on a subsistence basis and sold in markets around the world in disorderly fashion.
Uduka stated: “It is high time we created a market where they would be traded in an orderly manner, to the benefit of the Nigerian economy. A structured market for commodities will provide a fairer playing field for local market participants, while providing the required infrastructure for the international market to be exposed to Nigerian commodities.
“It will also provide price discovery to market participants – producers and consumers alike – leading to efficiency and better decision making.”
According to her, the three existing commodities exchanges in Nigeria backed by robust public participation from key stakeholders notably financiers, donors, public stakeholders’/ government officials, and international commodity exchanges as well as the larger Nigerian retail investment community can unlock a vast amount of capital in the short to medium term.
These important points and benefits, she stressed, have dictated the Commissions’ decision to host the International Conference on the Nigerian Commodities Market 2020 with the theme “Commodities Trading Ecosystem: Key to diversifying the Nigerian Economy.”