SEC, ministry partner to accelerate growth in solid minerals sector

The Securities and Exchange Commission (SEC) is working in collaboration with the Ministry of Mines and Steel Development to tackle myriads of problems faced by the solid minerals sector through the commodities exchanges.

The Director-General of the SEC, Lamido Yuguda during a meeting with the Minister of State for Solid Minerals, Dr. Uchechukwu Ogah, in Abuja, at the weekend, stated that the core function of a commodity exchange is to create markets by providing a setting, where multiple buyers and sellers can trade commodity-linked contracts, thereby reducing costs associated with finding a buyer or seller with whom to transact.

He listed other benefits of a commodity exchange to include improved quality, standardisation, traceability (tracking the source of every solid mineral), price discovery, price risk management, accepted dispute resolution procedures and facilitating provision of commodity financing.

However, he pointed out that Nigeria has been confronted by significant threats in the last couple of years, which include, structural fiscal challenges underlined by heavy reliance on crude oil for revenue, youth unemployment and increasing insecurity.

He lamented that the worrisome situation has been exacerbated by the pandemic.

He assured that the Federal Government is growing its agricultural and solid minerals sectors as a catalyst for economic growth and diversification to address these challenges.

In the same vein, the commission also set up a market-wide technical committee to undertake a holistic assessment of the existing framework of the Nigeria commodity ecosystem to complement government efforts and deepen the capital market,

He said the committee grouped its recommendations in phases, stating that in the first phase, the objective is to ensure food sufficiency and security, price discovery and market development while in the second phase, focus would include developing strong trades in export commodities.

Yuguda said the third phase should see the introduction of solid minerals, energy and derivatives while the last phase should be geared towards ensuring strong international presence in the local exchanges.

Additionally, he assured that the commission is actively promoting development of the commodities market, especially in areas of Nigeria’s comparative advantage such as solid minerals and agriculture.

In his remarks, Dr. Ogah described solid minerals as commodities of the future, while expressing optimism that it could assist greatly in the development of the nation’s economy in the near future.

He said, “We are moving away from oil because we believe that minerals are a thing of the future and the President has done a lot in initiating projects that are helping us to explore some of the few minerals that are of high value in the country.

“Apart from that, the President has equally initiated what we call Presidential Artisanal Gold Mining initiative which led to the presentation of the first locally mined artisanal miner’s gold bar to Mr. President.

“The proposal is that we are looking at a good policy where gold would be explored, produced and if possible refined in Nigeria so that we can use it to shore-up our reserve and to ensure that the depreciation on our Naira is controlled when we have a good number of raw resources to shore-up our reserve.

“So we believe that there is a lot we can do together that will be mutually beneficial to both parties and our country. I believe that both of us can work purposefully to grow the sector collectively for the interest of the nation”.