The Lagos Commodities and Future Exchange (LCFE) has, in conjunction with Heritage Bank Plc, capital market players and other stakeholders , launched a $1 trillion commodities trading platform aimed at diversifying Nigeria’s economy from a crude oil dependent ecosystem to other critical economic sectors.
This was revealed at the commissioning ceremony and official launch of Lagos Commodities & Futures Exchange tagged “New Order, Driving Nigeria’s Economy Through the Commodities Ecosystem” held recently at the LCFE premises in Lagos.
The innovative commodities exchange, according to key stakeholders, is expected to transform and accelerate the Nigerian economy to create value, generate wealth, restore growth and build a competitive economy in the global market.
In his clarification of the project , Akin Akeredolu-Ale, managing director/CEO, LCFE said the capital size of the Nigerian Commodities Ecosystem is so large and can be considered as a $1 trillion economy cutting across agriculture, oil & 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,” he said.
Akeredolu-Ale also explained that the Exchange identified that Nigeria’s crude oil, which is considered highly valuable, has been traded extensively in Switzerland and other areas outside the country by large-scale trading companies.
“Nigeria produces only high value, low sulphur content, light crude oils – Antan Blend, Bonny Light, Bonny Medium, Brass Blend, Escravos Light, Forcados Blend, IMA, Odudu Blend, Pennington Light, Qua-Iboe Light and Ukpokiti This makes Nigeria’s crude very desirable,” the LCFE chief emphasised.
Ifie Sekibo, managing director/CEO, Heritage Bank, in his goodwill message, considered the launch of LCFE as a huge potential to unlock the opportunities and wealth of the four asset classes of agriculture, solid minerals, oil & gas, and currencies.
“I believe that this is the beginning of how we are going to possibly create values in areas that hitherto we have taken for granted. First thing it will bring about is a sustainable commodity trading ecosystem, being a catalyst for capital formation, unlocking the long-time financing for the solid mineral and mining space. A frontline push to diversify the economy of this country from oil,” he stated.
Sekibo explained that the collaboration between Heritage Bank and LCFE is designed to align the market to transparent price discovery, standardised platform for trading of commodities across defined asset classes and straight through processing to settlement.
The Heritage Bank managing director also affirmed that the promotion of investment in commodities ecosystem by the bank in partnership with LCFE in its major assets traded would increase liquidity support from local commodity exportation to boost the race for the $200 billion in FX repatriation and reduce the pressure on exchange rate.
Sekibo added that the partnership was one of the many initiatives of the bank’s foundational objectives of wealth creation, preservation, and transfer across generations.
Also speaking at the event,Babajide Sanwo-Olu, Lagos State governor, expressed confidence that the successful commissioning of LCFE would better fulfil the catalysts of growth expected to attract cutting-edge ideas and innovation and improve the inflow of financial transactions and great ideas that will enable businesses to flourish.
This, Sanwo-Olu explained, would improve the living environment for businesses and for the investments in Lagos and Nigeria at large.