Cross River Gov. Otu set to ramp up state’s commodity market

• Okuku market, with 100 MT storage capacity one of Nigeria’s 30 commodity warehouses

Ben Eguzozie

Governor Bassey Otu of Cross River State, is set to ramp up activities at the state’s commodity market in Okuku, Yala local government area of the state.  The essence is to return the once renowned Okuku Commodity Market to a thriving local commodity hub of international standard, the governor assured in Calabar while receiving a delegation of Yala speaking people.

Okuku Commodity Market, with storage capacity of 100 metric tonnes of commodity, is one of 30 leased general-purpose warehouses established in 22 states for the take-off of Nigeria’s Commodity Exchange (NCX) in 2021. Additionally, two laboratories were set up in Abuja and Kano.

To revitalise the Okuku commodity market would involve opening up the roads leading into and out of Yala, for ease of transportation of goods from the interior communities to the urban areas and markets. This, Governor Otu has assured the people he would do.

Otu said the state administration under his watch was carrying out proper reforms to ensure that agriculture is well positioned as the mainstay of the state’s economy.

Okuku commodity market is notable for agriculture commodities like gari, rice, yam, cassava and assorted fruits like banana, mango, and other seasonal fruits.

Governor Otu said he is optimistic that in the near future when the envisioned Okuku Commodity Market becomes a reality, the state government would make areas like Okpoma and Okuku urban towns as the agricultural potential of the area have all the trappings to make Yala an urban and commercial nerve center in the northern part of the state.

He also said security and other structures that would entrench sanity in the area were being put in place. He wants the traditional rulers to galvanise the people to provide safe environment in the communities, which would boost the commodity market.

The Nigerian Commodity Exchange (NCX), with no clearly articulated business structure, has had limited operations over the years. It maintains 30 leased general-purpose warehouses in 22 states of the federation in addition to two laboratories located in Abuja and Kano.

The called-up share capital of the NCX was N500 million divided into 500 million ordinary shares of NGN1.00 each. Following the institution’s request for additional called up capital, the CBN holds 59.74 percent of the shares while the federal ministry of finance, budget and national planning (FMFB&NP) indirectly holds 40.26 percent.

In May 2012, the Nigerian federal government engaged the World Bank and the Ethiopian Commodity Exchange (ECX) to review the operations of the Abuja Security and Commodity Exchange (ASCE) in order to revitalise the commodity trading ecosystem in Nigeria. The World Bank and ECX recommended a change of name from ASCE to Nigeria Commodity Exchange (NCX), and was approved by the former President Mohammadu Buhari as unveiled by the CBN Governor in January 2021. The aim is to develop a strategic execution plan for transforming the NCX to a world-class commodity exchange that will galvanise the agriculture value chain, economically empower farmers and unlock the export potentials of the agriculture sector in Nigeria.

The NCX, Nigeria’s premier commodity exchange and a significant player in the country’s commodity trading ecosystem, has not been able to fully realise its potential in catalyzing agricultural production due to several characteristic challenges such as poor financial performance, deficiency in physical (warehouses and laboratories) and information technology infrastructure, lack of grading and contract standardization and inadequate warehouse receipts and logistics system.

Additionally, structural challenges, such as inadequacies in legal framework, poor funding, overlapping supervisory mandates and lack of stakeholders’ buy-in, limit the performance of the NCX, and the evolution of commodity exchange ecosystem.

Nigeria, with land area of about 98.30 million hectares, out of 74.00 million hectares is arable. This provides the country with great potential to leverage agriculture to feed its teeming population, create employment and generate revenue through export.

The country’s nascent commodity trading ecosystem has been faced with several challenges that must be urgently resolved to position it to off-take agricultural production from the farm gate and stem the massive revenue losses being suffered by the farmers

Data from the National Bureau of Statistics (NBS) show that agricultural GDP averaged NGN28.17 trillion between 2016 and 2020, reaching a high of NGN36.09 trillion (23.74 percent) in 2020.