Agricultural commodities to significantly boost Nigeria’s US$30bn non-oil export market

NIGERIA – Agricultural exports have been listed among the major revenue generating commodities that have the potential of boosting Nigeria’s revenues from export of non-oil commodities to US$30bn annually.

This is according to a recent update by the Nigeria Export Promotion Council (NEPC) Executive Director/Chief Executive Officer, Mr Segun Awolowo, who was addressing a non-oil export conference in Lagos, Nigeria.

Awolowo said that council has been at the forefront of zero-oil campaign as well as pushing the products for export.

Some of the products that could reap huge returns to Nigeria include: rice, sugar, soya, cocoa, tomatoes, palm oil, banana, oranges, cashew, cassava, sesame, spices, ginger, cowpea and fertilizer.

Awololo also noted that shea butter, cotton, leather, gold, petrochemicals, rubber and cement also had the potential to earn significant amounts of foreign exchange to Nigeria.

The NEPC CEO noted that Nigeria had run a mono-product economy for too long. This according to him had made the country’s economy to oil price shocks.

Prices of oil have increasingly become volatile in the recent years with dwindling fortunes of the commodity significantly reducing government revenues. This has forced Nigeria to seriously consider diversifying its economy.

Awololo explained that, “In response to the 2016 economic recession, triggered by a crash in oil prices, NEPC developed the zero-oil plan.”

“The plan is a strategy for boosting foreign exchange through the non-oil sector, preparing Nigeria for a world in which crude oil is less relevant, mainly through rolling out export policies for 22 major products that could generate up to $30bn in foreign exchange a year.”

As part of the policy interventions, the country has been working on a bill seeking to establish a Commodities Future Trading Commission, according to a report by Leadership.

Currently, the Securities and Exchange Commission (SEC) regulates and supervises Nigeria’s three commodities exchange markets which are the Abuja Securities and Commodities Exchange (ASCE), also called the Nigerian Commodities Exchange (NCX), Lagos Commodities and Future Exchange (LCFE) and AFEX Commodities Exchange Limited.

That legislation, if passed, will regulate the conduct of commodities business, register commodities exchanges and derivative trading facilities.

Other functions of the proposed Commission will include the registration, regulation of corporate and individual commodity future market operators, central depository companies, clearing and settlement companies and the establishment of a nation-wide system for commodities future trading in Nigeria.

Unfortunately, the Nigerian Commodities Exchange (NCX) is not yet positioned to unlock the potential inherent in this segment of the market and still struggling to find its feet due to several challenges whereas the privately-owned AFEX Commodity Exchange, registered in 2014, is just managing to get by.

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Recently, The Financial Market Dealers Exchange and the AFEX Commodities Exchange Limited of Nigeria signed a Memorandum of Understanding to unlock about N2.5tn (US$6.8bn) funding targeted to support about one million smallholder farmers within the next five years.

This came after AFEX secured an investment for an undisclosed amount from Consonance Investment Managers to deepen retail commodity transactions and strengthen operations and technology systems.

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