Food security: LCFE urges FG to utilise commodities exchanges

LAGOS Commodities and Futures Exchange (LCFE) has urged the Federal Government to utilize the commodities exchange ecosystem as a strategy to boost food security, create job opportunities and enhance Nigeria’s capacity to earn foreign exchange.

In an interactive session with journalists in Lagos, LCFE’s Managing Director and Chief Executive Officer, Mr Akin Akeredolu -Ale, while commending the efforts of the Federal Government in addressing the issue of food security, explained that government could achieve better if commodities exchanges were involved in the processes.

“Commodities Exchanges connect smallholder farmers in rural areas to large markets. This increases earning income capacity, a key aspect of household food security. They facilitate food storage through their warehouses. Through warehouse receipts smallholder farmers can access imput loans to purchase fertilisers and other materials. Commodities exchanges reduce default risks in trading and encourage investment in food systems and they manage price risks in food system by offering future trading.  They disseminate market information that enhances  They have capacity to promote competition,  reduce transaction cost and make food available amongst others,” he said.

Akeredolu-Ale explained that the nation’s economy is currently experiencing a food crisis with the fast-rising food costs, cost of transportation, insecurity, poor infrastructure, and foreign exchange instability, noting that all these have affected the ability of commodity stakeholders to successfully produce food and transport it to where it’s needed,”

He however commended the efforts of the President and the executive governors of Niger State, Mohammed Umar Bago and the Executive Governor of Lagos, Governor Babajide Sanwo-Olu for taking strong decisive steps to securing the Nation’s food supply chain.

“In Lagos State, the launch of the Lagos Rice Mill, the largest rice mill in Africa and the third largest rice mill in the world commenced operations in  2023 and has produced over 100,000 bags of rice in 2023. The mill’s products rival any global rice brand being imported into the country with their quality, taste and coluor,” he noted.

He noted that recently, a four-part Memorandum of Understanding (MoU) on sale and purchase of Paddy Rice was signed by LCFE, with Niger Food Security Systems & Logistics Company Limited (NIGER FOODS), Lagos State Rice Company Limited (LASRICO) and Commodity Tradenet Limited, a Special Purpose Vehicle of LCFE.

Speaking on the activities of the Exchange, Akeredolu-Ale noted that Lagos Commodities and Futures Exchange since receiving its license in 2019.  has propagated the need for the investing community to focus on the Commodities Ecosystem as not only the next Gold mine but a route to driving the GDP of the economy from single digit to double digits, adding that LCFE has called for attention to the Commodities Ecosystem as a One Trillion-dollar economy,  rich in Agricultural, Oil and gas and Solid mineral commodities.

“LCFE is the first Exchange in Nigeria to list and trade physical Gold coins called “Eko Gold Coins ” in 2022. Since that time, the Exchange has traded over 66 Million Naira worth of Gold through registered Commodity brokers on its Exchange. This novelle digital asset allows investors to invest in as little as 1g of Gold coin which listed at 42,500 at initial listing and closed at 65,000 per gram at the end of February 2024. The Exchange has made notable strides in the past few months with the signing of the MOU with the Lagos State Government for the development of the rice mill and the operationalization of the Rice Mill. Through this partnership, the mill has received over 10,000 Metric Tonnes of Paddy in 2023. The Exchange’s goal is to improve supply to the mill Tenfold in 2024.

“LCFE kicked off the year 2024 with a series of agreements geared towards the development of the Commodities Ecosystem.Some of these agreements include the National Coconut Development and Propagative Initiative (NATCODEV) for the growth of the Coconut Value Chain. The Exchange is also working on a proposal for a new rice mill will be coming on stream in the coming months to drive further development in the rice value chain.

Commodities Exchanges are known to contribute to the stability and price discovery of the Commodities ecosystem of their economy and LCFE has shown significant contributions with plans to dramatically contribute to the introduction of structured financing with the help of the capital market,” said Akeredolu-Ale.

Akeredolu-Ale commended the Securities and Exchange Commission (SEC) for its supportive roles in approving trading on various asset classes on LCFE.

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