SEC mulls financing platform for commodities sector

The Securities and Exchange Commission (SEC) has disclosed its commitment to provide a platform for selected players in the commodities trading ecosystem, the capital market and other relevant industry members to engage with mining companies on opportunities for accessing long-term funding in the Nigerian capital market.

This, according to the commission, is part of the implementation of the capital market master plan and part of the strategies to boost commodity trading and enhance a thriving commodity-trading ecosystem, over the next few years.

SEC also noted that the master plan designates commodities exchanges as critical for enabling investment diversification, risk management, price discovery and transactional efficiency.

The regulator, in a statement, disclosed that it will be holding a workshop themed ‘’Financing the solid minerals sector through the capital market and the critical role of the commodities exchanges’’ this July in Lagos on the proposed platform.

The workshop, which is organised in collaboration with the Federal Ministry of Mines and Steel Development, is to enlighten capital market operators on the roles of the mining industry and how it could admit players in the solid minerals extractive industry into the commodities trading ecosystem.

Lamido Yuguda,the SEC director general, had recently said that commodities exchanges will create jobs and facilitate economic development, among other benefits, adding that such exchanges are critical to enabling investment diversification, risk management, price discovery and transactional efficiency.

Yuguda stated that commodities exchanges have the potential to efficiently link commodities to industries, thereby creating jobs, improving living standards, unlocking the economic potentials of farming communities, promoting rural development, enhancing the financial inclusion of smallholder farmers, and ultimately facilitating economic development, amongst other benefits.

According to the SEC DG, the technical committee on commodities trading ecosystem had, in 2017, developed a roadmap for the actualisation of a vibrant commodities ecosystem. He said the committee specifically identified the development of a grading and standardisation system that will align with international best practices as an important precursor to achieving vibrancy in the ecosystem.