To save over $2 billion spent on the importation of wheat in Nigeria yearly, the Lagos Commodities and Futures Exchange (LCFE) has entered into a partnership with Heritage Bank to create a structure for trading on wheat contracts and its allied products, following the ongoing intervention of the Central Bank of Nigeria (CBN) to position the country as a net exporter of wheat.
Already, the apex bank’s intervention to address the perennial imbalances in wheat production in Nigeria has led to the disbursement of N41 billion to participating financial institutions (PFIs), including Heritage Bank for the production of quality wheat.
Addressing members of the commodity ecosystem operators at the weekend, the Managing Director, LCFE, Akin Akeredolu-Ale, explained that the exchange’s primary function was to create a structured platform for fungible tradable instruments that are de-risked by way of forward contracts through commodities products in agriculture, mineral resources, oil and gas where issuers can also write an array of contracts.
He commended the Central Bank and the Securities and Exchange Commission (SEC) for the current initiative on wheat production and the creation of an enabling environment for the development of the commodities ecosystem.
“LCFE is delighted to have a partner in Heritage Bank for the development of the commodities ecosystem. We are committed to partnering with the bank to develop the wheat value chains.
“We will aggregate farmers, their commodities, and data for the overall development of the wheat value chain. Our involvement is in the primary input. The exchange would continue to provide the necessary support to Heritage Bank through the alignment of various stakeholders and partners,” Akeredolu-Ale said.
Former Executive Director, Lake Chad Institute of Research, Dr. Oluwasina Olabanji said the $2 billion Nigeria spent annually on wheat importation is due to insufficiency in commercial quantities and poor quality of primary input.
Millers have had to resort to importing wheat to meet the huge demand for wheat by-products, causing wheat importation to constitute a key contributor to the nation’s huge import bill.
According to him, given the diverse uses of wheat, any country that cannot produce the commodity for consumption and sales is bound to face balance in trade challenges.
However, he expressed optimism that the apex bank’s intervention would address the challenges facing wheat production, boost investment opportunities in Agriculture, enhance foreign exchange earnings and provide jobs for the country’s teeming unemployed youths.
Heritage Bank’s Divisional Head, Agribusiness, Natural Resources and Project Management, Olugbenga Awe stated that Heritage bank was committed to promoting the development of agricultural value chains in Nigeria.