Lagos Commodities and Future Exchange (LCFE), Heritage Bank Plc, Capital Market players and other stakeholders have unlocked the $1trillion (N445trn) commodities ecosystem as an avenue to diversify the economy from a crude oil-dependent economy to other critical economic sectors.
This was revealed at the historic commissioning ceremony and official launch of Lagos commodities & futures exchange, with the theme, “New Order, Driving Nigeria’s Economy Through the Commodities Ecosystem,” on Thursday, in Lagos.
This feat, according to key stakeholders will catalyse and transform the Nigerian economy to create value, wealth restore growth and build a globally competitive economy.
ALSO READ FROM NIGERIAN TRIBUNE
Giving his goodwill message, the MD/CEO of Heritage Bank, Ifie Sekibo, specifically stated that as the lead settlement bank in partnership with key stakeholders that are critical to the success of this project, it considered the launch of LCFE as huge potential to unlock the opportunities and wealth of the four asset classes- agriculture, solid minerals, oil and gas and currencies.
“I believe that this is the beginning of how we are going to possibly create values in areas that hitherto we have taken for granted. The first thing it will bring about is a sustainable commodity trading ecosystem, being a catalyst for capital formation, unlocking the long-time financing for the solid mineral and mining space. A frontline push to diversify the economy of this country from oil,” he emphasised.
Hinting at the partnership, Sekibo explained, “the collaboration between Heritage Bank and LCFE is designed to align the market to transparent price discovery, standardised platform for trading of commodities across defined asset classes and straight through processing to settlement.”
He affirmed that the promotion of investment in the commodities ecosystem by Heritage Bank in partnership with LCFE in its various assets traded in agriculture, solid minerals, oil and gas and currencies would increase liquidity support from local commodity exportation to boost the race for the $200billion in FX repatriation and reduce the pressure on exchange rate.
In his address, the governor of Lagos State, Babajide Sanwo-Olu who appreciated the efforts of all the stakeholders, stated that the successful commissioning of LCFE will better fulfil the catalysts of growth which is to attract cutting-edge ideas and innovation and improve the inflow of financial transactions and great ideas that will enable businesses to flourish.
Akin Akeredolu-Ale, MD/CEO, LCFE said, “As we are all aware, the capital size of the Nigerian commodities ecosystem is so large and like I have said in the past, it can be considered as a $1trillion economy cutting across agriculture, oil and gas, solid minerals and currency. With a capitalisation this large, it was important to lay the right foundation as the means determined the end for us and we could not afford, not to get it right.”
He said the Exchange identified that Nigeria’s crude oil has been traded extensively outside the country in Switzerland and other areas by large-scale trading companies.
“Nigeria produces only high value, low sulphur content, light crude oils – Antan Blend, Bonny Light, Bonny Medium, Brass Blend, Escravos Light, Forcados Blend, IMA, Odudu Blend, Pennington Light, Qua-Iboe Light and Ukpokiti. This makes Nigeria’s crude very desirable.
“By way of sovereignty, our oil and gas products should be traded and priced within Nigeria. 400,000bbls on arbitrage can be traded on the LCFE. Whenever prices drop, we can plan for our trades in the future. This will boost the balance sheet, enhance liquidity, and shore up the value of the Naira; External reserves will become both external and internal reserves. The Exchange is currently setting up frameworks and structures to achieve this and more details will unfold in due time,” Akeredolu-Ale explained.