Arrangements have been concluded for the commencement of real and active trading on Nigerian commodities as from tomorrow as the Nigeria Commodity Exchange (NCX), Stanbic IBTC Holdings Plc, Bank of Agriculture (BoA), Central Securities Clearing System (CSCS) and other stakeholders formally launch the, electronic commodity exchange, otherwise known as electronic warehouse receipt system (e-WRS) in Abuja tomorrow.
Managing Director, Nigeria Commodity Exchange (NCX), Mr. Yusuf Abdurrahim, told The Nation that the launching tomorrow of the e-WRS by Minister of Investment, Trade and Industry, Mr. Olusegun Aganga, would kick-start real active trading.
According to him, all arrangements have been concluded for immediate take-off of trading in the commodities.
“We are hoping there would be real trades on that day. The warehouses that we are going to use are ready and we will build up capacity as we progress,” Abdurrahim said.
Under the e-WRS, farmers will be able to place their commodities at an NCX-accredited warehouse in different parts of the country and will be issued an electronic receipt stating details such as commodity type, quality and quantity, owner and other relevant information. The depositor will have the choice of using the receipt as collateral to obtain bank loans or for trading on the Exchange. Another option is to keep such commodities in the warehouse until their prices stabilize or appreciate.
On the prospects of the e-WRS, Abdurrahim had explained that the new initiative would encourage the provision of standard storage facilities for operators in the agricultural value chain and make the warehouse receipts a prime tool of trade while facilitating access to finance.
According to him, the E-WRS would also strengthen small scale farmers and agro-allied businesses while creating jobs and sustainable economic growth.
He outlined that an active commodity exchange would significantly help in unlocking Nigeria’s agriculture potential pointing out that agriculture is a game changer for the country if the sector receives the desired level of commitment by both the private and public sectors.
Stanbic IBTC Bank will act as the settlement bank for the electronic commodity exchange while CSCS will serve as clearing and depository agent. The e-WRS is also being undertaken in collaboration with other banks and relevant stakeholders including the Federation of Agricultural Commodity Association of Nigeria (FACAN).