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NCE, BoA, Stanbic IBTC collaborate on electronic trading system


News » Business
Nigeria

25th June 2014

The Nigeria Commodity Exchange (NCX), formerly known as the Abuja Commodities and Securities Exchange, will be launching a pilot electronic warehouse receipt system (e-WRS) next month (July 10, 2014).

This was made known at a press conference in Lagos by Yusuf Abdulrahman, CEO of NCX, Mohammed K. Santuraki, CEO, Bank of Agriculture (BoA), and Sola David-Borha, CEO, Stanbic IBTC Holdings plc.

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

The new platform, Abdulrahman explained, 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 will have the choice of using the receipt as collateral to obtain bank loans or for trading on the Exchange.

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

Apart from ensuring liquidity on the Exchange, 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. It will also strengthen small scale farmers and agro-allied businesses while creating jobs and sustainable economic growth, he added.

He emphasised 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.

According to Sola David-Borha, “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.”

David-Borha stated that the bank “aims to become one of the top agriculture financing banks in Nigeria, to be achieved through a number of bespoke schemes and initiatives currently being implemented by the financial solutions provider.” It 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.

Article Credit: Business Day News

Updated 5 Years ago
 

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Tags:     (NCX)     (e-WRS)     Yusuf Abdulrahman     Stanbic IBTC Holdings plc     BoA     (FACAN)     David-Borha     Mohammed K. Santuraki    

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