ISB game changer for commodities ecosystem — Akeredolu-Ale
The Investments and Securities Bill has been described as a game changer that is capable of enabling the commodities trading ecosystem to thrive thereby diversifying the nation’s economy and provide the nation with foreign exchange.
This was stated by the Managing Director of LFCE, Mr. Akin Akeredolu-Ale while commenting on the ISB which was recently passed by the House of Representatives.
He stated that Nigeria is a commodities country as a better part of the GDP by way of production comes from the commodities ecosystem and urged that Senate to ensure swift concurrence on the Bill.
“We need that concurrence by the Senate as quickly as possible. I am very happy that the NASS has taken it upon themselves as well as the SEC to push this bill. That bill is a game changer for the Commodities Ecosystem, and also a game changer for Nigeria as a commodities country. For now, a lot of commodities being traded is still in the informal sector, the bill would create structure and all the leakages from taxation and revenue will be taken care of by this bill.
“The major things about the commodities ecosystem is the fact that we are looking inwards in Nigeria now. A lot of the impact of the policies that the CBN had done last year by way of supporting the agriculture space are paying off now in the maize, wheat and rice space among others. And for us at the LFCE, we have also looked at the part of commodities that has to do with solid mineral which is the gold space.
“In Nigeria we have over 58 different solid minerals that are sought for all over the world, we have not touched platinum or lithium which is the major component for batteries and electric cars.
“These are the kinds of commodities that by the time the bill is passed, we would be able to have proper structure and attract foreign investors. What do these foreign investors look out for? The foreign investors look at regulatory framework, legal framework and a proper enabling environment to want to participate in the market.”
He disclosed that in a bid to further deepen the Commodities Trading Ecosystem in Nigeria, the Securities and Exchange Commission (SEC) has approved 13 products for trading on the Lagos Futures and Commodities Exchange.
Akeredolu-Ale stated that the Exchange has capacity to trade electronic receipts of oil and gas, agriculture, solid minerals, derivatives and currencies adding that the Exchange has also put in place necessary infrastructure to trade in derivatives as hedging instruments for investors.
According to him, “On the 28th of July 2022, we launched the Gold Coin. The good thing about the Gold coin is that the gold that was used in its preparation was sourced from Nigeria and a lot of it came from Ilesha. It is being traded and people have realised that this is a very good hedging instrument, this just goes to show the capacity of what we can do in Nigeria if this Bill is passed.
“The goal of LCFE is to play a pivotal role in growing the nation’s gross domestic products (GDP) into double digits. In Africa, the commodities ecosystem is the largest employer of labour. It provides a platform to deploy resources into the fungible assets that have been de-risked. We bring transparency through the operations of commodities exchange through our structures and two-way quote.”
He therefore restated the compelling need for the federal government to unlock the potentials of the Nigerian commodity ecosystem through the concurrence of the Investments and Securities Bill by the Senate stating that at the minimum, it will enhance the competitiveness of commodities exchanges in Nigeria.
