News Column

Brokers Kick Against Proposed Privatisation of Commodities Exchange

May 27, 2014

Mohammed Aminu

The Commodity Brokers Association of Nigeria (CBAN) yesterday cautioned the federal government against privatising the Abuja Commodities and Securities Exchange (ACSE), saying it will not augur well for the economy.

The association however said it was in support of the Electronic Warehouse Receipt System introduced by the Federal Ministry of Agriculture to reduce post harvest losses in the country.

Speaking with THISDAY in Sokoto, the National President, CBAN, Alhaji Altine Shehu Kajiji, said the call became necessary following plans by the federal government to privatise the Abuja commodities exchange this year.

He noted that the exchange had not been operational since its establishment over a decade ago and wondered the rationale for privatising it.

Kajiji alleged that the recent move by the federal government was meant to favour few individuals at the expense of Nigerians.

"The federal government is duty bound to protect Nigerians by not allowing an individual to own an important institution like the commodities exchange. It should devise a strategy whereby it should be owned by stakeholders like various farmers associations, commodity brokers association and other entrepreneurs rather than selling it to an individual at the expense of Nigerians.

"So, what we are saying is that the commodity exchange should not be sold to an individual because doing so will not augur well for the country.

"How can you sell a place that has not been operational since its establishment? How can the federal government sell an important institution like the commodity exchange in a country of over 150 million people, where 70 per cent of the population are farmers?" Kajiji queried.

According to him, there was the need for the federal government to channel funds to the commodities exchange to make it operational and sensitise Nigerians on the benefits they stand to derive from the institution.

He observed that some African countries like Ghana, Ethiopia and Kenya had developed their commodities exchange for the benefit of their farmers and the economy.

Kajiji explained that the essence of establishing the commodities exchange programme was to provide a platform where commodities could be bought and sold on the floor of the commodies exchange just like in Ghana, Ethiopia and Kenya.

He said this would enable farmers at the grassroots to be aware of the prices of commodities in the country thereby avoiding exploitation by middlemen and some companies.

"For instance, if I am a farmer in a village in Sokoto and I know that a tonne of maize is sold in India or Lagos at the cost of N10,000, then I will not listen to a middleman who comes to my village to probably buy it at the cost of N2,000 because I am already aware of the actual price of the commodity.

"So, the farmers who are working to earn a living will not be farming at a huge loss because they are now aware of the price of commodities elsewhere," he stated.

Furthermore, Kajiji predicted that the commodity market would be more profitable than oil and gas in the future, especially with the discovery of shale oil in the United States of America.

He described the e-Warehouse Receipt System as a process where a group of farmers or a farmer who owns a commodity, would be able to keep it in a designated warehouse established by government without selling them at a very low price until price stabilises.

Kajiji said the aim was to minimise losses and ensure that farmers receive full benefits for what they laboured to produce.

He said through the initiative, Nigerian farmers may now use receipts for their produce as collateral for loans, adding that it would control price volatility due to the availability of buffer stock and reduce post harvest losses.

"There will be designated warehouses across the country where a farmer can go and keep his produce and will be given a receipt for the quantity of the commodity. And even if he needs some money, there will be a bank that will give him some amount of money to solve his immediate problem," he added.

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Source: AllAfrica

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