The lack of a clear policy framework that will connect the operations of the Nigerian Commodity Exchange (NCX) to the development of the agriculture sector in the country has been identified by experts as one the factors hampering the efficiency of the Exchange.
As a way of ensuring that the Exchange plays its designed role in the nation’s quest for economic diversification, the experts are suggesting that the Federal Government reset its policy as regards the agriculture sector so as to make it play a complementary role in the development of the sector.
In doing this, the experts want the government to borrow a leaf from the current administration in Ghana which recently added rice contracts to the number of commodities to be traded on that country’s Exchange.
Speaking to BusinessDay on the present inaction of the NCX in Kano at the weekend, Mohammed Aliyu, a specialist in drafting trade contracts, observed that the government needs to focus on using the exchange to deepen economic diversification.
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Aliyu, who is the chairman, board of directors, Kano Economy City, said making NCX active is critical to the attainment of food sufficiency and economic diversification.
It would be recalled that the Ghana Commodity Exchange (GCX) had recently added rice contracts (Ghana rice) to the number of commodities traded on the electronic trading platform following the approval by the Securities and Exchange Commission.
According to a document obtained by BusinessDay, the move is expected to boost local rice production and consumption as the government works to put a moratorium on rice importation by 2022.
GCX has so far listed five commodities, namely, maize, soya bean, sorghum and sesame contracts.
Nana Adjei Ayeh, president, Ghana Rice Interprofessional Body (GRIB), explained that the launch of rice trading through the Exchange would be of immense value to the Ghanaian rice farmers.
For some time now, the Kano trading floor of NCX has been dormant due to what sources attributed to the inability of the Federal Government to put in place a legislative instruction that makes it mandatory for dealers in commodities to source their produce from the floor.
Another challenge hampering the operations of the floor was the refusal by dealers to patronise the trading floor.
Experts say the inability of the Federal Government to create an environment for the functionality of the NCX is costing Nigerian farmers several billions of naira yearly as they are compelled to sell their produce at giveaway prices at the farm gate to middlemen.
