By Peter Egwuatu
The Association of Securities Dealing Houses of Nigeria ( ASHON) has urged the Federal Government to initiate policies that will enable commodities exchanges to contribute towards Nigeria’s economic growth and development.
Making this call in a statement a statement signed by its Chairman, Chief Onyenwechukwu Ezeagu, the Association said:” To enable the operators in the Commodities Ecosystem operate optimally, the government should enact relevant policies that prevent illegal mining by foreigners, ensure autonomy of the Capital Market apex regulator, the Securities and Exchange Commission (SEC), protect export proceeds, legislate laws to enable Agricultural Commodities to be linked to financial markets and fungibility and support for Pension funds for increased participation in the commodities ecosystem.
“The announcement to inject N50 billion into the Nigeria Commodities Exchange by CBN, is a welcome development. Any act by the Federal Government to stimulate the growth and development of the commodities ecosystem through the Commodities Exchanges is highly beneficial to the entire ecosystem. Commodities Exchanges play an important role in the commodities ecosystem because they introduce structure, transparency, and price discovery into the system. It is important to note that commodity exchanges are not commodity traders, they are simply a structured platform that deals in both commodities spots and commodities securities in multi-asset classes as approved by SEC.
“Although this announcement is a welcome development it is also important to note that any intervention into one commodities exchange creates an uneven playing field that defeats the benefits of healthy competition among the participants in the Ecosystem. It is also important to note that this injection of funds is better served within the ecosystem to support the farmers, aggregators, miners, refiners, processors and all the other participants in the commodities ecosystem.”