Lagos Commodities and Futures Exchange (LCFE) has stressed the need for the Federal Government to utilise the commodities exchange ecosystem as a strategy to boost food security, create job opportunities and enhance Nigeria’s capacity to earn foreign exchange.
At a media interactive session with journalists in Lagos yesterday, LCFE’s Managing Director and Chief Executive Officer, Akin Akeredolu-Ale, commended the efforts of the Federal Government in addressing the issue of food security but explained that government could achieve better if commodities exchanges were involved in the processes.
According to him, the commodities exchanges connect smallholder farmers in rural areas to large markets, which ultimately increases earning income capacity, a key aspect of household food security.
In addition, he said commodities exchanges reduce default risks in trading, boost investment in food systems and manage price risks by offering future trading.
“The Nigerian economy is experiencing a food crisis with the fast-rising food costs, cost of transportation, insecurity, poor infrastructure, and foreign exchange instability. All these have affected the ability of commodity stakeholders to successfully produce food and transport it to where it is needed.
“They facilitate food storage through their warehouses. Through warehouse receipts smallholder farmers can access imput loans to purchase fertilisers and other materials. They disseminate market have capacity to promote competition, reduce transaction cost and make food available amongst others,” he stated.
He said Lagos Commodities and Futures Exchange obtained its license in 2019 and has canvassed the need for the investing community to focus on the commodities ecosystem as not only the next gold mine but a route to driving the GDP of the economy from single digit to double digits.
“LCFE has called for attention to the commodities ecosystem as a one $1 trillion economy, rich in agriculture, oil and gas and solid mineral commodities. LCFE is the first Exchange in Nigeria to list and trade physical Gold coins called Eko Gold Coins in 2022,” he stressed.
Akeredolu-Ale disclosed that the exchange has traded over N66 million worth of Gold through registered commodity brokers on its Exchange, noting that the novelle digital asset allows investors invest in as little as 1g of gold coin, which listed at 42,500 at initial listing and closed at 65,000 per gram at the end of February 2024.
He pointed out that the exchange has made notable strides in the past few months with the signing of the MOU with the Lagos State Government for the development of the rice mill and the operationalisation of the Rice Mill.
He said the mill has received over 10,000 metric tonnes of Paddy in 2023, even as its goal remained to improve supply to the mill Tenfold in 2024 through this partnership
“LCFE kicked off the year 2024 with a series of agreements geared towards the development of the Commodities Ecosystem. Some of these agreements include the National Coconut Development and Propagative Initiative (NATCODEV) for the growth of the Coconut Value Chain.
The LCFE boss said the exchange is also working on a proposal for a new rice mill will be coming on stream in the coming months to drive further development in the rice value chain.
“Commodities Exchanges are known to contribute to the stability and price discovery of the Commodities ecosystem of their economy and LCFE has shown significant contributions with plans to dramatically contribute to the introduction of structured financing with the help of the capital market,” said Akeredolu-Ale.
