The Central Bank of Nigeria, CBN, is set to inject N50 billion into the Nigerian Commodity Exchange in a bid to halt the arbitrage by middlemen under whom Nigerian farmers have suffered for decades
The Governor of the CBN, Mr. Godwin Emefiele, who disclosed this at the inaugural meeting of the steering committee set up to reposition the Exchange, said this step meant that the planned privatisation of the Exchange has been cancelled.
Emefiele heads the committee. Other members include representatives from the Nigeria Sovereign Investment Authority (NSIA), the African Development Corporation (AFC), the federal ministries of Finance, Budget and National Planning; Industry, Trade and Investment and Agriculture and Rural Development.
The N50billion investment would be made through the Infrastructure Corporation (Infraco) in collaboration with other investors such as the NSIA, and Africa Finance Corporation, AFC.
Emefiele revealed that President Muhammadu Buhari has approved the plan to halt the on-going privatisation of the exchange as the process was found to have become an obstacle rather than a solution to the problems of farmers.
He said: “It is against this backdrop that the President considered and approved a proposal for the repositioning of NCX in order to consolidate on the government’s efforts aimed at strengthening the agriculture value chain, part of which includes connecting farmers to markets beyond their immediate environments,” he said.
“The highlights of the Presidential Approval were:
“That the CBN, as the majority shareholder of NCX, should collaborate with NSIA and AFC, under the Infraco Structure, to develop and implement a strategic repositioning plan for the NCX to make it an efficient world-class commodity exchange.
“The revalidation of CBN’s 59.7 per cent majority shareholding in NCX to enable it to implement far-reaching measures, which include reconstitution of NCX’s board and board committees, the 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.”
The Nigerian Commodity Exchange was incorporated as a stock exchange on June 17, 1998 but commenced electronic trading in securities three years after in May 2001. Three months after, it was converted to a commodity exchange and brought under the supervision of the Federal Ministry of Commerce, now Ministry of Trade and Investment.