The Securities and Exchange Commission (SEC), has stated the need to reduce the substandard commodities in the market and encourage global acceptance of commodities produced in Nigeria.
Executive Commissioner Operations SEC, Mr. Dayo Obisan stated this during a Commodities Standards Sensitisation Workshop held in Lagos Monday.
Obisan said that it is globally recognized that the unique feature of the commodities exchange is the standardization of the commodities traded on the platform as each commodity traded on the exchange is graded by quality, size, weight and other criteria.
He said however that the determination of these grades and standards is dependent upon improved local standards which will take into cognizance internationally accepted standards.
“On that note and in recognition of the fact that the statutory responsibility for standard setting in Nigeria lies in the Standards Organization of Nigeria. The Executive Management of the Commission on behalf of all stakeholders engaged with the management team of the Standards Organization of Nigeria, to ensure the expedited approval and publication of standards commodities.
“As the establishment of relevant standards will significantly transform the Nigerian commodities trading ecosystem. Sequel to that engagement, the ecosystem roadmap implementation committee comprising key stakeholders has been working on the development of grading and standardization system.
“The initial stage of the development process will concentrate on delivery of standards for agricultural commodities. In this regard, we are working with the SON to create awareness for existing agricultural commodities standard but more essentially to obtain feedback from you the stakeholders on the standards to be considered in this workshop and initiate a view of inadequate standards applicable.
Obisan said the SEC remains a strong advocate for a thriving commodities trading ecosystem. We strongly believe this is a project of national importance, given that that commodities exchanges value chain has significant value and can transform our economy.
According to him, “As Nigerians thrive to achieve a sustainably diversified economy, given the current drive to guarantee food security, there is an urgent need for more complementary efforts from the government, regulators and critical stakeholders to ensure the approval and effective adoption of appropriate local standard benchmark against international practice to establish quality and reverse the unwarranted situation of perennial rejection of the Nigerian produced commodities.
“It is therefore my expectation for this workshop and other stakeholders’ engagement to serve as a rallying point for inclusive standards development process. As the ecosystem is driven towards standardization, the broader society will be impacted for greater prosperity.”
The SEC as part of the implementation of the 10-year capital market master plan, constituted a technical committee in commodities trading ecosystem. The mandate of the committee was to identify challenges with the existing framework and develop a roadmap for a vibrant ecosystem.
In his remarks, Director General of SON, Mallam Farouk Salim said that
the organisation is willing to collaborate with relevant stakeholders
in ensuring that the development of standards follows the best international principles of standard development as this would lead to improved lives of Nigerians.
Represented by Dr. Omolara Okunlola, Head Food Group, Salim said the organization is ensuring it promotes confidence of Nigerians in Nigerian produce and ensuring that SON in line with the various Federal Government policies, develops standards in such areas.
“For the first time in history, we have the strategy already outlined under the Nigerian national standardization strategy. If you go through the strategy, you can see we have listed out standards to be developed, under agriculture, energy, transport, industry, a focus on SMEs, we also have for the health sector. The strategy is a living strategy, as policies from the government come up, we try to update the strategy “she stated.
Also speaking, Chairperson of the Commodities Trading Ecosystem Implementation Committee, Ms. Daisy Ekineh said with the strong global push for green economies and a net zero carbon emission, the era of fossil fuel in powering development is fast coming to an end hence, for an oil dependent economy like Nigeria, it is a race against time to effectively diversify the economy.
Ekineh said there is no doubt that efforts are on-going in this direction as evidenced by the various policies and programmes of government and the increasing contribution of the non-oil sectors to GDP which now exceeds 90% of GDP. Over 92% in Q2 2021.
She said, “The progress is commendable. Nonetheless, efforts need to be invigorated to speedily diversify the economy in all respect, for while the oil sector has shrunk in its contribution to GDP, it remains quite dominant in foreign exchange receipts and export trade. The economy is in other words, still mono product in some respect and significantly lacking in export diversification.
“The nation’s import requirements, its foreign reserve build – up and budget funding are still largely dependent on crude oil receipts. This is clearly not sustainable and a major risk factor of the economy; being vulnerable to the vagaries of the global oil market.
“The solution lies in the development of non- oil commodities like Agriculture and Solid Minerals which can have significant multiplier effect on the economy. If well developed, these sectors can provide steady industrial raw materials, create jobs, bolster export earnings and reduce demand for foreign exchange and generally facilitate industrial development, particularly the manufacturing sector.
Ekineh said the value chain for the commodities sector is quite huge and each aspect of the chain, creates its own sub value chain which in itself can significantly impact the economy.
She however said that the nation cannot optimally develop the commodities sector and its export trade without setting acceptance standards and grading for tradable commodities, be they for industrial use, export or otherwise. Such standards should be reviewed periodically and aligned with global best practice for international acceptability and export promotion.
“Standards and grading create trust, provide safety assurance and promote the integrity of the commodities market/sector as participants know exactly what the quality of a commodity is and can without doubt, purchase particular grade of commodities which suit their purpose. In other word, they know and have the assurance of what they are buying” she added.