(4 minutes read)
· Nigerian Commodity Exchange (NCX) will be restructured to give farmers direct access to the buyers at the exchange to eliminate middlemen, who gain immensely as an interlocutor
· The move of the Governor of the CBN, Mr. Godwin Emefiele, has nixed the privatization effort of the commodity exchange, which has been on the card for quite some time
· The repositioning of the commodity exchange has received the approval of President Muhammadu Buhari to halt the on-going privatization of the exchange
Shortly, the Nigerian Commodity Exchange (NCX) will be restructured to give farmers direct access to the buyers at the exchange to eliminate middlemen, who gain immensely as an interlocutor. Under the plan, the Central Bank of Nigeria (CBN), which is the majority shareholder, would inject N50 billion to reposition the exchange to play an active role in agriculture development. The move of the Governor of the CBN, Mr. Godwin Emefiele, has nixed the privatization effort of the commodity exchange, which has been on the card for quite some time. The Governor is heading the committee of the exchange and the decisions to expand the operations of the exchange will be taken in consultation with him.
The other members of the committee include representatives from the Nigeria Sovereign Investment Authority (NSIA), the African Development Corporation (AFC), the federal ministries of Finance, Budget and National Planning; Industry, Trade and Investment and Agriculture and Rural Development. The infusion of capital in the exchange will be made through the Infrastructure Corporation (Infraco) in collaboration with other investors such as the Nigeria NSIA and AFC.
Arbitrage by the middleman in the sale of commodities has been an issue that engaged the government’s attention for quite some time. With this arrangement, it is expected that such practices, which worked to the disadvantage of the farmers would end. Significantly, Nigeria is laying a lot of importance to pep up its agricultural sector, which was the mainstay of the country, before the discovery of oil. The neglect of the sector had led to import of most of the agricultural products. The repositioning of the commodity exchange has received the approval of President Muhammadu Buhari to halt the on-going privatization of the exchange. It is reported that the process was found to have become an obstacle rather than a solution to the problems of farmers.
Incorporated as a stock exchange on June 17, 1998, NCX commenced electronic trading in securities. In May 2001 it was converted as a commodity exchange. On August 8, 2001, it was brought under the supervision of the Federal Ministry of Commerce (now Ministry of Trade and Investment).
