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Exchange, BoA, Stanbic IBTC to float trading platform for commodities

By BusinessNews Staff on June 26, 2014

The Nigerian financial service sector will on July 10, 2014 witness the birth of a new trading platform distinct from those of the Nigerian Stock Exchange (NSE), FMDQ Plc and NASD Plc.

The Nigeria Commodity Exchange (NCX), formerly known as the Abuja Commodities and Securities Exchange (ACSE), will be launching a pilot electronic warehouse receipt system (e-WRS) on July 10.

Stanbic IBTC is one of the banks collaborating with the Central Securities Clearing System (CSCS), Bank of Agriculture and the Federation of Agricultural Commodity Association of Nigeria (FACAN) on the project. Stanbic IBTC Bank is the settlement bank.

In a chart with THISDAY in Lagos, the Managing Director /CEO of NCX, Mr. Yusuf Abdurrahmin, said the new platform will enable farmers to place their commodities at an NCX-accredited warehouse in different parts of the country and will be issued an electronic receipt stating details such as commodity type, quality and quantity, owner and other relevant information.

He added that depositors will have the choice of using the receipt as collateral to obtain bank loans or for trading on the Exchange.

Another option, he said, is to keep such commodities in the warehouse until their prices stabilise or appreciate.

Abdulrahman stated that the initiative will encourage the provision of standard storage facilities for operators in the agricultural value chain and make the warehouse receipts a prime tool of trade while facilitating access to finance adding that it will also strengthen small scale farmers and agro-allied businesses while creating jobs and sustainable economic growth.

He emphasized that an active commodity exchange will significantly help in unlocking Nigeria’s agriculture potential. He described agriculture as a game changer for the country if the sector receives the desired level of commitment by both the private and public sectors.

Chief Executive Officer, Stanbic IBTC Holdings Plc, Mrs. Sola David-Borha, told THISDAY that the commodity exchange and the warehouse receipt system will be instrumental in opening up Nigeria’s farm produce to the global commodity market.

“The transparency it will engender is crucial in ensuring participation from across the world. And with transparency comes improvements in efficiency and pricing. It also makes it easier for banks to provide financing for operators in the agricultural value chain.

“Stanbic IBTC considers agriculture to be a very strategic sector for Nigeria. We are deploying our expertise and products towards the development of agriculture business in the country. Agriculture was hitherto seen as a subsistence activity but increasingly, more middle-level businesses and people are getting involved in it and we find that very encouraging,” she added.

Stanbic IBTC, David-Borha stated, aims to become one of the top agriculture financing banks in Nigeria through a number of bespoke schemes and initiatives currently being implemented by the financial solutions provider.

The bank also keys into the Agricultural Transformation Agenda of the federal government, which among others seeks to create improved market integration and significant reduction in post-harvest losses.

“Stanbic IBTC has a well-structured business unit that focuses on agriculture. We have developed a number of schemes and products that will have significant impact on the entire agricultural value chain. Stanbic IBTC Bank is one of the leading financial institutions contributing to the growth of agriculture in Nigeria, with products and services customized for the sector.

“The bank is accessible to all operators in this sector. We are also working with a number of government agencies and multilateral organizations to spearhead a true agricultural revolution in Nigeria leveraging on the Standard Bank Group’s experience and expertise in agricultural financing,” David Borha stated.

Describing Nigeria’s economic potential as massive, David-Borha said the Standard Bank Group will continue to seek opportunities in strategic sectors of the economy to grow its business while helping to create sustainable prosperity for the people.

“As an institution that is in Nigeria for the long run, we are committed to helping the country achieve her developmental aspirations. We will continue to identify partnership opportunities towards the sustained development of pivotal sectors of the economy,” she added.

[This Day]

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