Buhari Halts Nigeria Commodity Exchange Sale

• •Approves CBN’s N50bn investment

BY COBHAM NSA – President Muhammadu Buhari has put on hold the privatization of ailing Nigeria Commodity Exchange (NCX) and in its place approved Central Bank of Nigeria (CBN)’s planned investment of about N50 billion to reposition and restructure the Exchange for effective service delivery.

And given guarantees of support and necessary approvals from government, the apex bank will hopefully launch a new-look NCX within the next 90 days.

CBN Governor, Godwin Emefiele who stated this while addressing industry critical stakeholders in Abuja on Thursday, said efforts are focused on establishing enabling structures and Framework that would reposition and turn the Exchange “into a commercially viable Platform in Nigeria for delivering efficient pricing of Nigeria’s Agric produce; among others”.

He said the meeting’s key objective “is to brief stakeholders on Mr. President’s recent approval of a proposal to reposition the Nigeria Commodity Exchange (NCX), and thereafter discuss the modalities for repositioning the institution”.

The meeting, which also serve to inaugurate a steering committee to oversee the NCX’s repositioning, had Mr Emefiele explaining that the N50 billion approved by the President would come through the InfraCo structure.

According to Emefiele; “The revalidation of CBN’s 59.7% majority shareholding stake in NCX, to enable it implement far reaching measures, which includes reconstitution of NCX’s Board and Board Committees, appointment of Chairman by the CBN, and an investment of at least N50 billion through the InfraCo structure.

“That CBN is expected to engage the Nigeria Postal Service on possible utilisation of its assets to develop model warehouses across the federation”, adding; “the SteerCo may co-opt any other Ministry, Department and Agency of government to see to the effective implementation of the Strategic Turnaround Plan”.

He said among other consents granted by President Buhari are that as majority shareholder of NCX, the CBN should collaborate with Nigeria Sovereign Investment Authority (NSIA) and Africa Finance Corporation (AFC), under the Infraco Structure, to develop and implement a strategic repositioning plan for the NCX to make the NCX an efficient world class commodity exchange.

Also, there will be a steering committee (SteerCo) chaired by the CBN Governor and including representatives from NSIA and AFC as well as the federal ministries responsible for finance, budget and national planning; industry, trade and investment; and agriculture and rural development, to oversee the implementation of this strategic plan.

The apex bank also intends to engage the Nigeria Postal Service (NPS) and utilise some of its assets to develop model warehouses across the federation, adding that the SteerCo has been mandated to co-opt any other MDA of government towards effective implementation of the strategic turnaround plan.

Emefiele said the NCX sale was jettisoned due to unfair arbitrage opportunities that government noticed in the private sector arrangement and which has become an obstacle in moderating food prices in Nigeria.

He said the Exchange has been unable to catalyse agricultural production due to several structural and idiosyncratic challenges which include limited funding and investment; poor financial performance and deficiency in physical infrastructure such as warehouses, laboratories and grading capability; inadequate warehouse receipts and logistics infrastructure.

The CBN boss said the Federal Government, along with the apex bank, has implemented several intervention schemes in the agriculture and manufacturing sectors, meant to boost employment generation and wealth creation as well as reduce the country’s dependence on imported food items; conserve the foreign exchange earnings; and boost economic growth.

For Emefiele; “These interventions in the agricultural sector, particularly the Anchor Borrowers’ Programme (ABP) and Commodity Development Initiative (CDI), sought to strengthen key agricultural commodities’ value chains, enable improved productivity in the agricultural sector, and increase sourcing of inputs locally by stakeholders in the manufacturing sector.

“These programs have also helped to improve our self-sufficiency in the production of key staple items, which is in line with the government food security objectives.”

Mr Emefiele however admitted that the gains already made in the sector notwithstanding, “There are still significant challenges within the Nigerian agricultural commodities value chain that would need to be addressed, in order to accelerate investment and productivity in the sector”.