‘Thriving commodities trading will eliminate substandard products’
The Securities and Exchange Commission (SEC) has stated that a vibrant commodities trading ecosystem, with grading and standardisation features, would ensure compliance with established grades and standards, eliminate the proliferation of sub-standard commodities in the markets and encourage global acceptance of commodities produced in Nigeria.
Director-General of the Securities and Exchange Commission, Lamido Yuguda, stated this at a stakeholders’ sensitisation workshop on commodities standards organised by the SEC in collaboration with the Standards Organisation of Nigeria in Kano.
He described the commodities exchange as critical to diversification, risk management, price discovery and transactional efficiency, which will in turn create jobs and facilitate economic development.
Yuguda stated that commodities exchanges have the potential to efficiently link commodities to industries, thereby creating jobs, improving living standards and unlocking the economic potentials while promoting rural development.
Speaking at the workshop, he said the event was timely considering the government’s policy shift towards economic diversification and the need to deepen capacity across the agricultural value chain.
According to him, the technical committee on the commodities trading ecosystem had in 2017 developed a roadmap for the actualisation of a vibrant commodities ecosystem.
The committee identified the development of a grading and standardisation system that would align with international best practices as an important factor in achieving vibrancy in the ecosystem.
“I am happy to report that the Ecosystem Roadmap Implementation Committee has been working tirelessly on the development of a grading and standardisation system.
The initial stage of the development process would concentrate on the delivery of standards for agricultural commodities.
“In this regard, we are working closely with the SON to create awareness for existing agricultural commodities standards, but more essentially to obtain feedback from stakeholders on the standards to be presented for consideration of stakeholders at this Workshop to trigger a review of inadequate standards if and where applicable,” he said.
Yuguda said the 10- year capital market master plan, which is the blueprint for the growth and development of the capital market over the next decade, designates commodities exchanges as critical for enabling investment diversification, risk management, price discovery and transactional efficiency.
Director-General, Standards Organisation of Nigeria (SON), Farouk Salim, said the role and importance of commodity markets could not be overemphasised in connecting both producers and consumers in a centralised liquid marketplace and for the economic growth of the nation.
Salim stated that countries with older and better commodity exchanges have historically gained an economic advantage over others.