Mr. Godwin Emefiele, the Governor of CBN made the disclosure on Thursday the Inaugural Meeting of the Steering Committee, set up to reposition the exchange.
Mr. Emefiele announced that President Muhammdu Buhari has approved halting the on-going privatization of the Commodity Exchange, as the process was found to have become an obstacle to its repositioning.
Speaking further on the investment, the CBN Governor said that it would be made through the Infrastructure Corporation (Infraco), and its in a push to make the exchange functional and halt the arbitrage of middlemen, under whom Nigerian farmers have suffered for decades.
The Nigeria Sovereign Investment Authority (“NSIA” or “The Authority”) is an agency of the Federation set up to manage funds in excess of budgeted hydrocarbon revenues. Its mission is to play a leading role in driving sustained economic development for the benefit of all Nigerians through building a savings base for the Nigerian people, enhancing the development of Nigeria’s infrastructure, providing stabilisation support in times of economic stress.
The NSIA derives its mandate from the NSIA Act which was signed into law in May 2011. It empowers the Authority to receive, manage and invest funds in a diversified portfolio of medium and long term assets on behalf of the Federal Government, State Governments, Federal Capital Territory, and Local Governments Area Councils in preparation for the eventual depletion of Nigeria’s hydrocarbon resources. To give effect to the mandates, the NSIA established three main funds: the Stabilisation Fund, the Future Generations Fund and the Nigeria Infrastructure Fund.
The Authority’s current share ownership structure is as follows;
- Federal Government: 45.83%
- State Governments: 36.25%
- Local Governments: 17.76%
- Federal Capital Territory: 0.16%
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 and brought under the supervision of the Federal Ministry of Commerce.
The conversion was premised on the need for an alternative institutional arrangement that would manage the effect of price fluctuations in the marketing of agricultural produce which has adversely affected the earnings of farmers since the abolishment of commodity Boards in 1986.
The ownership and management of the Exchange are completely separated from the right of a trading member to trade on the Exchange. The Exchange has a Board of Directors, which determines policy matters of the Exchange as a company. Market decisions relating to operations are delegated by the Board to the Council, which includes representatives of the promoting institutions, members of the Exchange, commodity associations warehouse operators/collateral managers, clearing banks and other financial institutions.
The Council of the Exchange shall operate through four standing Committees; Membership and Finance Committee, Trading Committee, Clearing House Committee and Arbitration and Vigilance Committee. All the committees shall have established rules and regulations governing their operations and shall meet from time to time on cases relating to each of them and make recommendations to Council for consideration and approval. The membership of the Exchange is comprised of ordinary trading members, intuitional trading members, and ordinary members. The day-to-day management of the Exchange is delegated to the Managing Director/CEO.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur