By NKIRUKA NNOROM
The Nigeria Commodity Exchange (NCX), formerly known as the Abuja Commodities and Securities Exchange is set to boost agriculture development in the country with the introduction of electronic warehouse receipt system (e-WRS).
The formal launch of the e-warehouse system, which is in its pilot stage, will take place on July 10, 2014.
The Managing Director/CEO of NCX, Mr. Yusuf Abdurrahmin, who disclosed this at a press conference in Lagos, said NCX is collaborating with Stanbic IBTC Bank, Central Securities Clearing System, CSCS, Bank of Agriculture, BoA, and the Federation of Agricultural Commodity Association of Nigeria (FACAN), on the project with Stanbic IBTC Bank acting as the settlement bank.
Abdulrahman said that 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.
The depositor, he noted, will have the choice of using the receipt as collateral to obtain bank loans or for trading on the Exchange, adding that such depositor could also chose to keep such commodities in the warehouse until their prices stabilize or appreciate.
He also explained that apart from ensuring liquidity on the Exchange, 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.
“It will also strengthen small scale farmers and agro-allied businesses while creating jobs and sustainable economic growth,” he added.
He emphasized that an active commodity exchange will significantly help in unlocking Nigeria’s agriculture potential, while describing agriculture as a game changer for the country if the sector receives the desired level of commitment by both the private and public sectors.
Also speaking at the event, Sola David-Borha, Group Chief Executive Officer, Stanbic IBTC Bank, said: “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.”