Financial analysts have identified effective financing and regulation as key ingredients to boost commodities trading market and improve diversification plans of the federal government.
They made the call on in on Tuesday at the just concluded International Conference on the Nigerian Commodities market organized by the Securities and Exchange Commission in Abuja.
The conference which had the theme, “Commodities Trading Ecosystem: Key to diversifying the Nigerian Economy,” drew financial experts from the capital and money markets and other key sectors of the economy to discuss ways of diversifying Nigeria’s economy.
In his contributions, a professor of capital markets, Uche Uwaleke says adequate financing is key if any meaningful progress will be achieved in the commodities market.
Uwaleke singled out the agricultural sector as very crucial in the diversification plans of the federal government.
“If you look at the technical report of the committee on macro-economic outlook, it emphasizes the need to improve macro-economic policies, reduce the interest rate and contain inflation, which is why I am happy to hear that the central bank has reduced interest rate on their interventions from 9 per cent to 5 per cent, it is also good that the CBN is saying they won’t adjust the naira because of it will have huge implications on the economy, and practically affect monetary policies.
“Also, organizing small stakeholder farmers is also key in the diversification process. But this can be achieved through increased access to finance. For instance, the anchor borrowers need to be sustained and monitored well by the CBN.
“This is because some of them when they get into states, they enter into wrong hands so there must be concerted efforts for evaluation by the regulatory agencies especially CBN which must look at the repayment rate and ensure that the loans are used for the purposes they are made for, which is the only way we can have a large number of suppliers among others,” he said.
Speaking further, he lamented the low allocation to agriculture which according to him is less than 10 per cent and it is low particularly at the state level.
He added that there must be scholarships available for students who want to study agriculture as the discipline still has fewer students and have not gotten the necessary attraction it requires to boom.
Also speaking, the Chief Executive Officer of Nigerian Economic Summit group Laoye Jaiyeola underscored the need for regulation to ensure that commodities are efficiently utilized.
He also said identified awareness creation and capacity building as key components of the process.
“We must ensure that there is a good pre-training from the production of commodities to its processing as a finished good. Also, there must be in place a clear cut regulation which is also essential.
“There must also be significant education and capacity building to ensure that we get it right. Collaboration and coordination is also relevant and this is where Securities and Exchange Commission comes in to coordinate policies most especially ACfTA if we are advancing discussions on cross border trade,” he said