The Minister of Industry, Trade & Investment, Dr. Okechukwu Enelamah has said that the proposed strategic investment in the Nigeria Commodity Exchange (NCX) by the Nigeria Sovereign Investment Authority (NSIA) is aimed at revitalizing 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.
Speaking in Abuja on Thursday, the Minister according to a statement issued by Head, Public Communications of Bureau of Public Enterprise (BPE), Alex Okoh, explained that the Exchange 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)”.
Inaugurating the National Council on Privatisation (NCP) Steering Committee on the revitalization of the NCX and the Project Delivery Team on the strategic equity investment by the NSIA in the NCX in his office in Abuja, the Minister who is also the Chairman of the Steering Committee, stated that it was to further serve as a catalyst for promoting non-oil exports through grades and standards that conform to international best practices.
The Minister said the strategic investment in the NCX by the NSIA which was recently approved by the Vice-President, Mr. Yemi Osinbajo who is also the Chairman of the NCP 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 privatization as approved by the NCP in 2013.
According to the statement, the Minister regretted 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 sensitization mechanism, absence of trading platform/infrastructure and absence of Warehouse receipts Trading System.
Enelamah who expressed optimism that 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, said it was “inspiring to note that the FGN has charged the Steering Committee under my Chairmanship with the mandate to midwife the laudable initiative to be implemented within a record time”.
He said the wisdom in Steering Committee comprising various agencies working together would forestall the tendency for stakeholders to work at cross purposes in the bid to resuscitate, revitalize and recapitalise the NCX; noting that this is one of the projects the government would want to deliver on.
Acting Director General of the Bureau of Public Enterprises (BPE), Dr. Vincent Onome Akpotaire in his remarks said given the volume of work already done by the Bureau which is the secretariat on the transaction, the Steering Committee should be able to complete its task by the end of May 2017.
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.
“It would be recalled that the Nigeria Commodity Exchange (NCX), formerly known at different times as Abuja Stock & Commodity Exchange (ASCE) and Abuja Stock Exchange (ASC) was incorporated as a public Limited Liability Company in 1998 and commissioned in 1999. It established facilities that were to serve as a model for the securities market in Nigeria.
“However in 2011, it was converted into a commodity exchange in the recognition that the securities market in Nigeria was at that time too small to support two viable stock exchanges as there was one already operating in Lagos”.
