The Central Bank of Nigeria has announced its plans of obtaining all statutory approvals and support necessary to restructure and reposition the Nigerian Commodities Exchange (NCX) within the next 90 days.
This disclosure was made today by the Governor of the CBN, Mr. Godwin Emefiele at the Inaugural Meeting of the Steering Committee, set up to reposition the exchange.
Mr. Emefiele emphasized that the apex bank had gotten a prior approval from the President, Muhammadu Buhari to restructure the NCX, in a bid to stabilize food prices in the country.
Commenting on the plans, Mr. Emefiele said: “In the next 90 days we should be able to really begin the first launch and this will involve approvals on repositioning, restructuring, setting up bureaus, board structures, board committees, governance committees.’’
The need to restructure the NCX became imperative after a worsening spate of insecurity and the COVID-19 pandemic led to a surge in Nigeria’s food inflation rate which rose by almost 20% Year-on-Year as at December 2020. Recall that Nigeria’s inflation rate rose to a three-year high of 15.8% as at December 2020.
Mr. Emefiele also noted that the president had earlier given an order to halt the on-going privatization process of the NCX, as the process was a major impediment to the restructuring of the organization. Plans are also underway to engage the Nigerian Postal Service to convert some of its assets to warehouses for the exchange.
The Nigeria Commodity Exchange (NCX) was originally incorporated as a Stock Exchange on June 17, 1998. It commenced electronic trading in securities in May 2001 and was converted to a commodity Exchange on August 8, 2001, subsequently brought under the supervision of the Federal Ministry of Commerce.
The Central Bank of Nigeria currently owns majority shares in the exchange, and aims to partner with state-owned Nigeria Sovereign Investment Authority and Africa Finance Corp, in a bid to reposition the commodity platform to be more responsive to challenges encountered in the production and marketing of food and agriculture produce in the country.
Mr. Emefiele noted that the central bank and its partners are looking to invest at least N50 billion to build the infrastructure required to reposition and restructure the exchange.