Forex Scarcity: FG Moves To Boost Agric Earnings

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With substantial boost in production of many agricultural produce and traders from central and North African countries flooding Nigeria to import commodities, the Federal Government is moving to maximise its advantage by resuscitating the moribund Nigeria Commodities Exchange (NCX).

Since the abolition of marketing boards by the Babangida administration, there has not been any regulation in the produce export sector and farmers have thus been open to manipulations by local and foreign middlemen.

Already, a steering committee of National Council on Privatisation (NCP) on the revitalisation of the NCX and the Project Delivery Team on the strategic equity investment by the Nigeria Sovereign Investment Authority (NSIA) have been inaugurated to drive the planned privatisation of the exchange.

At a ceremony in Abuja last week, Minister of Industry, Trade & Investment, Dr Okechukwu Enelamah explained that the proposed strategic investment in the Nigeria Commodity Exchange (NCX) by the Nigeria Sovereign Investment Authority (NSIA) is aimed at revitalising the operations of the Exchange to make it more responsive to its mandate of serving as a platform for trading agricultural produce and other commodities.

He said it is also to facilitate trades in financial derivatives, contributing meaningfully towards the development of agricultural production through regulation of robust and standard warehousing facilities; including silos and enhancing liquidity in the sector through the Warehouse Receipt System (WRS).

Enelamah who is also the chairman of the Steering Committee, stated that revitalising NCX was to further serve as a catalyst for promoting non-oil exports through grades and standards that conform to international best practices.

According to him, the strategic investment in the NCX by the NSIA, which was recently approved by the Vice-President, Prof Yemi Osinbajo is preferred by the Federal Government as a pre-privatisation strategy to pave way for the injection of financial and other requisite resources prior to its partial privatisation as approved by the NCP in 2013.

He expressed regret that in its over 18 years of existence, the Exchange had been beset by a myriad of challenges including poor funding, poor stakeholder buy-in particularly Federal Government agencies, lack of enabling legal and regulatory framework, erosion of shareholders’ funds, poor sensitisation mechanism, absence of trading platform/infrastructure and absence of Warehouse Receipts Trading System.

Injecting the approved strategic equity investment by the NSIA in the NCX for a period of up to five years would serve as a strong catalyst for achieving government objectives, he said.

The Steering Committee, which is made up of various agencies has up to May, 2017 to conclude its work and would thus forestall the tendency for stakeholders to work at cross purposes in the bid to resuscitate, revitalise and recapitalise the NCX; noting that this was one of the projects the government would want to deliver on.

The Steering Committee which has 15 members drawn from relevant stakeholders has the mandate to implement the turnaround of the NCX while the Project Delivery Team (PDT) will among others serve as the clearing house for all technical documents that would be exchanged in the course of the transaction and will render regular reports to the Steering Committee.

A perusal of the 2017 Appropriation Bill revealed that the Exchange, which has been injected from its own building was allocated N518,939,580 for capital expenditure and N157,914,125 for recurrent expenses.

Notably, it would spend N46,810,000 to upgrade NCX Assaying Laboratories to meet international ISO standards; purchase new project vehicles with N67,000,000 and expend N224,569,580 on development of agricultural trading infrastructure for effective marketing and storage of agricultural produce.

The NCX is also expected to establish remote access site (RAS) in the six geo-political zones to decentralize and link the trading system to rural farmers for easier accessibility.

It will establishment delivery warehouses in major commodity producing areas across the country at a cost of N125,300,000; purchase industrial equipment for N26,520,000; purchase computers worth N55,260,000 and computer software at a cost of N224,559,580