Business

SEC Sets 7-Year Timeline To Revive, Develop Commodities Market

Published

5 years ago

January 31, 2019

THE Securities and Exchange Commission, SEC, and other stakeholders in the commodities ecosystem have set a seven year timeline to revive the commodities market in Nigeria through the Nigerian Commodity Exchange, NCX, and set it at par with other commodity exchanges in other parts of the world. The restructuring will be concluded in 2025. SAN The Commission is said to be focusing on the importance of commodity exchange to the economic diversification agenda of the federal government and the need to grow the agriculture value chain. Part of the restructuring plan includes injection of fund by the Nigeria Sovereign Investment Authority (NSIA) into the NCX which has been comatose for some years. This comes as the only functional commodity exchange in Nigeria -AFEX Commodities Exchange – a privately owned commodities exchange, moved 46,160 metric tonnes (MT) of commodities (ginger, paddy rice, soya beans and maize among others) worth N6.3 billion between second quarter 2016 and fourth quarter, 2017, according to available data. To also facilitate the plan, the Commission has set up a special division – Commodities Division – as part of measures to strengthen regulatory capacity for the market. The NCX has been battling with a host of challenges, including lack of funding occasioned by government’s inaction, lack of enabling laws and proper understanding of the operations of commodities exchange. investment in Nigeria.

Phases of the restructuring Recommendations by the Technical Committee, TC, on Enhancing the Commodities Trading Eco-system, set up by SEC to recommend solutions to the many problems of the NCX showed that the planned restructuring would be in four phases with the first phase lasting for two years from 2018 to 2019. The first phase, according to the report of the committee, will focus on achieving food/input sufficiency, price discovery and market development with special attention on agriculture produce like maize, sorghum, soya beans, cassava and rice. This phase will also involve engagement in public enlightenment and development of education roadmap by the SEC as well as encouragement of investment in warehouses and storage facilities by both the Commission and private sector operators. This phase will also involve organisation of farmers into cooperatives by the Central Bank of Nigeria, CBN, Federal Ministry of Agriculture and Rural Development, FMARD, and SEC to aggregate produce and encourage them to become members of the exchange among other relevant actions. The second phase, which will last for another two years from 2020 to 2021, will focus on the development of export-focused commodities in agriculture like cocoa, sesame, cotton and palm oil, and continuous de-risking of agriculture value chain by the National Insurance Commission, NAICOM. In the third phase (2022-2023), exchanges would be expected to key into Customs Single Window System to ease process of export. During the fourth phase of the project (2024-2025), SEC and other stakeholders will ensure that there is strong international presence in the commodities market, while tradeable commodities will be expanded to include solid minerals and energy. Challenges However, the NCX has been faced with beehive of challenges, which the committee identified to include lack of proper funding to carry out its functions, which has hampered the ability of the NCX to enter into technical collaboration for capacity building and knowledge transfer that is badly needed with established commodity exchanges. In addition to these challenges, the exchange is faced with weak supply, lack of interest by operators in the securities market to open commodities trading subsidiaries, low understanding of the workings of the exchange and the absence of supportive infrastructure and institutional arrangements that could strengthen the supply side of the market. There is also the non – existence of vibrant farmers’ co-operatives that could bulk the produce of their members for wholesale marketing on the floor of the Exchange. Equally lacking were commodity grades and standards as well as farmers’ credit system based on Warehouse Receipts. Recommendations/Solutions One of the key recommendations of the committee is that commodity brokers/dealers should be encouraged to trade and not penalized by excessively high capital requirements. According to the report, in many other commodity markets, spot market brokers trading only physical contracts do not carry any mandatory capital base. The Committee stated that clear and straightforward regulation is required for the effective operation of a commodity exchange and advised that regulation of the spot markets should be devolved from the SEC to the Commodity Exchanges among other recommendations. Mary Uduk, SEC’s Action According to the Acting Director of SEC, Ms. Mary Uduk, in furtherance of the commitment to develop a vibrant commodities eco-system, the Commission has commenced the implementation of measures to strengthen regulatory capacity by establishing a Commodities Division. She said: “One of the cardinal objectives of the current government is diversification. Like you all know, Nigeria is a mono-product economy, which is oil. The capital market is actually, the next center of any economy and we at the SEC are trying to key in to that diversification objective of the government. Nigeria is majorly also an agrarian economy where every street in this country has a product that is exportable. “Hence, the best way for farmers to have value for their products is for there to be price transparency and a level playing field for every participant in the commodities space. For that to happen there will be a virile commodities exchange.” Continuing, she said: “The SEC sees it as major priority to help the farmers, the people and the economy, hence the need to re-establish the Commodity Exchange Division, empower it, provide the resources, training and the necessary where-withal to make sure that we regulate the market. Of course, we have the responsibility to support the creation of exchanges according to perception 13 of the Investment and Securities Act, ISA. That is why we are doing what we are doing in order that the Nigeria becomes better in the process of diversifying the economy.”

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Published

4 days ago

May 8, 2024

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AJAGBE ADEYEMI TESLIM

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Owen Omogiafo, Transcorp Group President Makes MIPAD’s Global Top 100 List, As Company Posts Impressive Q1 Results

Published

5 days ago

May 7, 2024

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Union Bank Achieves Another Milestone; Attains MSECB ISO 27001:2022, 20000-1:2018 and 22301 Certifications

Published

6 days ago

May 6, 2024

august24admin

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Union Bank, one of Nigeria’s foremost and most trusted financial institutions, has announced another significant achievement with its attainment of the MSECB management system certifications in ISO/IEC 27001:2022, ISO 22301:2019, and ISO/IEC 20000-1:2018.

The Bank was awarded these three noteworthy certifications by MSECB, a leading international provider of audit and certification services, after being rigorously assessed and found to be in accordance with the management system requirements covering Information Security, IT Service Delivery, and Business Continuity standards under the combined Information Management Systems (IMS) standards.

The information security management systems ISO/IEC 27001:2022, ISO 22301:2019, and ISO/IEC 20000-1:2018 are internationally recognised standards that outline the requirements for establishing an effective information management system that guides against data breaches, IT system compromises, and disruption to business processes.

These latest certifications will enable the bank to continue to offer its customers improved data security, innovative banking solutions, and seamless service delivery through its state-of-the-art banking network.

Commenting on the Bank’s recent attainment, Chief Information Security Officer at Union Bank, Francis Mojoyinlola, said: “The Bank’s continued adherence to best international practices, as acknowledged by an independent third-party audit from a reputable international certification firm, reaffirms our capacity to erect, implement, and maintain best information and security management practices.

We remain committed to offering our esteemed customers simpler, more innovative services rooted in the highest standards of information security and cutting-edge innovative banking service.”

MSECB Management System Incorporated, or simply MSECB, is a reputable international organisation specialising in the certification of management systems based on a wide range of global standards.

They offer audit and certification services and expertise in multiple fields, including, but not limited to, Information Security, Quality Management, Business Continuity, and Service Management. They help guide, evaluate, and issue various organisations’ certifications against internationally recognised standards.

Their mission is to provide their clients with comprehensive services that inspire trust and demonstrate recognition.

This recent achievement by Union Bank follows the bank’s recertification of Payment Card Industry Data Security Standard (PCI DSS) version 3.2 and the International Organisation for Standardisation ISO/IEC 27001:2013 certification attained in 2018.

This further highlights Union Bank’s commitment to the strictest information management security standards while securing its pride of place as one of Nigeria’s most trusted financial institutions.

Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank of Nigeria Plc. is a household name and one of Nigeria’s long-standing and most respected financial institutions.

The Bank is a trusted and recognisable brand, with an extensive network of over 300 branches across Nigeria.

The Bank currently offers a variety of banking services to both individual and corporate clients including current, savings and deposit account services, funds transfer, foreign currency domiciliation, loans, overdrafts, equipment leasing and trade finance.

The Bank also offers its customers convenient electronic banking channels and products, including Online Banking, Mobile Banking, Debit Cards, ATMs and POS Systems.