Stakeholders Call For Repositioning Of Nigerian Commodity Exchange

market view

In order for the country to fully diversify into the agriculture sector and boost revenue in the non-oil sector, stakeholders have called for the repositioning of the Nigerian Commodity Exchange (NCX).


The NCX was established to provide practical solution to a number of challenges that have adversely affected the growth and development of the Nigerian agriculture sector, especially the heavy post-harvest losses associated with poor warehousing and the absence of a ready market for the disposal of farm produce at realistic prices.

The NCX is an end-to-end integrated system of decentralised trading, warehousing, quality certification of commodities, clearing, settlement, delivery and market information.

It enables agro-commodity merchants, exporters and industrial end users to have access to reduced transaction costs in terms of cost of logistics and aggregation of commodities. The exchange is very vital as it stimulates the production of surplus commodities to enable farmers and farmers’ cooperatives to bulk their agricultural commodities for trading on the exchange.

Since its establishment in 1998 as part of efforts at developing the Nigerian capital market and with an initial primary objective of dealing in securities trading, the Abuja Securities and Commodity Exchange (ASCE), now NCX, has been bogged down by operational challenges. Some of the challenges hampering the ability of the exchange to deliver on its mandate, include poor funding and stakeholders’ buy-in, lack of enabling legal and regulatory framework, erosion of shareholders’ funds, poor sensitisation mechanism, absence of a trading platform/infrastructure, absence of a warehouse receipt system (WRS), and an electronic WRS (e-WRS), among others.

Recently,  the managing director and chief executive officer of the NCX, Mrs Zaheera Baba-Ari, lamented, “Currently, the NCX is operating sub-optimally as the conversion from stock to commodity exchange was done without the required structural and institutional infrastructure.”

Giving reasons the present administration should re-position the exchange, she pointed out that the NCX is a key vehicle through which government can realise its objectives of employment generation through agriculture.She stated that the NCX platform, if re-positioned, would encourage increased production of agro-commodities as farmers would have ready access to an efficient market.

A stockbroker with Calyxt Securities Limited, Mr Tunde Oyediran, said that the commodity exchange market is critical to the economic growth and development of any nation as it serves as the ultimate platform for trading and marketing various agricultural produce and commodities. He noted that revitalising the NCX would enhance employment creation which will engage the country’s teeming youths.