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Agri-Specialist Describes the CBN's Restructuring of NCX As Counter-Productive

Commodities	1220 VIEWS
Commodities
1220 VIEWS

Tuesday, March 02, 2021 / 5:45PM / Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV

The Central Bank's N50bn intervention in the Nigerian Commodities Exchange has been described as counter-productive to market growth. Mr. Bisi Iyaniwura an Agri-Business expert said this in a recent discussion on the "CBN Intervention in the Nigerian Commodities Exchange".

According to him, the intervention would not support a competitive commodities exchange in Nigeria, which is vital for achieving growth from the economy's Non-Oil sector.

He described the approach by the CBN as uncalled for and a wasteful venture that will stifle entrepreneurship, innovation, and creativity in the commodities market.

Iyaniwura advised the Central Bank to sell its shares in the NCX and allow other key stakeholders the Federal Ministry of Industries, Trade and Investments, the Federal Ministry of Agriculture, and Federal Ministry of Finance, to drive the process with the regulatory support of the Securities and Exchange Commission (SEC).

"Apart from the NCX based in Abuja, there is the Lagos Commodities and Futures Exchange, LCFE, and the AFEX Commodities exchange who are all key players in the ecosystem. This is why we need a level-playing field that encourages investments" he said

The market professional who has been involved in developing the framework for Nigeria's Commodities trading stressed that the market thrives on a comprehensive and efficient receipt and warrant system.

He added that the system provides opportunities for trading in futures and derivatives, which requires a vigorous regulatory mechanism to incentivize the private sector.

Speaking on the agric sector GDP performance in 2020, which recorded growth in crop production, livestock, and forestry, he said the COVID 19 pandemic and the herdsmen/farmer clashes adversely affected the agri-business segment.

The effects of the twin issues (COVID 19, Farmer/Herder clashes) he stated on food security in the country will be dire in 2021, as he decried the rising cases of poverty and diminishing purchasing power of Nigerians.