Lagos Commodities and Futures Exchange (LCFE) Thursday officially went live and began trading on commodities targeting to leverage the potential of the commodity ecosystem worth about $1 trillion.
The Commodities and Futures Exchange will trade on four asset classes such as crude oil, solid minerals, currency and agriculture.
Prior to its incorporation in 2015 and receipt of license to trade the four asset classes of Commodities from the Securities and Exchange Commission in 2019, the Nigerian Commodities Ecosystem was a greenfield. Stakeholders have been buying and selling commodities for many decades without structure, without price discovery and without transparency.
What the LCFE is saying
Speaking at the commissioning of the Exchange by the Executive Governor of Lagos State, Babajide Sanwo-Olu, Akin Akeredolu-Ale, Managing Director/CEO, Lagos Commodities and Futures Exchange said: “As we are all aware, the Capital size of the Nigerian Commodities Ecosystem is so large and like I have said in the past, it can be considered as a $1trillion economy cutting across Agriculture, Oil and Gas, Solid Minerals and Currency. With a capitalisation this large, it was important to lay the right foundation as the means determined the end for us and we could not afford not to get it right.”
- The CEO said the Exchange and its competent team spent the past three (3) years identifying and aligning relevant building blocks for an effective, structured, and transparent commodities ecosystem. He noted that one of the asset classes in which LCFE has made tremendous giant strides in, is the Solid Minerals asset class.
- “We noticed there was an urgent need for structure, regulation, funding and data collation in this sector and this is where Commodities Exchanges play strategic roles in introducing structure to this ecosystem.
- “A quick glance at the Solid Mineral Mapping of Nigeria, shows a very robust distribution of solid minerals. Nigeria is heavily blessed with over 40 different mineral types spread across more than 450 deposits across the country, of which seven, including Gold, have been identified by the Ministry of Mines and Steel Development, as the most strategic towards rehabilitation of the Solid Minerals sector. We are proud to be the first Exchange in Nigeria licensed by the Securities and Exchange Commission to commence trading of gold contracts backed by physical Gold,” he said.
- Also speaking, Onyenwechukwu Ezeagu, Chairman, Board of Directors Lagos Commodities & Futures Exchange said, “In 2015, LCFE was incorporated under the initiative of Association of Securities Dealing Houses of Nigeria (ASHON). Our vision was to transform the Nigerian commodities market and redefine practice standards which would catalyse economic growth in Nigeria.
- “In 2019, we were granted full operating license by the Securities & Exchange Commission (SEC) to trade 4 asset classes: Agriculture, Solid Minerals, Oil and Gas and Currencies. We sincerely appreciate the Securities & Exchange Commission for your encouragement and support to accomplish this feat.”
- He noted that “The journey to accomplish this has been long but fulfilling. Since 2015, there has been a lot of emphasis by the present Federal Administration on diversifying the economy from a crude oil-dependent economy to other critical economic sectors such as Agriculture and Solid Minerals. We keyed into the vision and identified the need for a platform to facilitate transparent and orderly trade of these commodities. It was out of this that the Lagos Commodities and Futures Exchange was founded with the intention to create a platform that encourages transparent price discovery, mitigate price risks and bridge the gap between the Financial and Commodities sectors of the economy.”