The Lagos Commodities and Futures Exchange (LCFE) has commenced a partnership with Heritage Bank Plc to create a structure for trading in wheat contracts and its allied products, following the ongoing intervention of the Central Bank of Nigeria (CBN) to position the country as a net exporter of wheat.
The banking sector regulator’s intervention has already led to the disbursement of N41 billion to Participating Financial Institutions (PFIs), including Heritage Bank, to produce quality wheat through accredited Anchor borrowers.
Addressing members of the commodity market ecosystem at the weekend, the Managing Director, LCFE, Mr. Akin Akeredolu-Ale, explained that the Exchange’s primary function was to create a structured platform for fungible tradable instruments de-risked by way of forward contracts.
He commended the CBN and the Securities and Exchange Commission (SEC) for the current wheat production initiative and creating an environment for the development of commodities trading.
“LCFE is delighted to have a partner in Heritage Bank for the development of the Commodities Ecosystem.
We are committed to partnering with the bank to develop the wheat value chains by aggregating farmers, their commodities, and data for the overall development of the wheat Value Chain. Our involvement is in the primary input.
The Exchange would continue to provide the necessary support to Heritage Bank through the alignment of various stakeholders and partners.”, said Akeredolu-Ale.
The former Executive Director, Lake Chad Institute of Research, Dr. Oluwasina Olabanji, lamented that Nigeria spent US$2bn annually on wheat imports due to insufficiency in and poor quality input.
According to him, given the diverse uses of wheat, any country that cannot produce the commodity for consumption and sales is bound to face balance in trade challenges.
He, however, expressed optimism that the apex bank’s intervention would address the challenges facing wheat production, boost investment opportunities in Agriculture, enhance foreign exchange earnings and provide jobs for the country’s teeming unemployed youths.
Heritage Bank’s Divisional Head, Agribusiness, Natural Resources and Project Management, Mr. Olugbenga Awe, stated that Heritage Bank was committed to promoting agricultural value chains in Nigeria.
According to him, the bank’s involvement in the sector dates many years ago. It has always been at the forefront of ensuring the overall growth and development of commodities products in Nigeria.
“The CBN’s Governor recently announced the apex bank’s N41billion intervention in wheat production in Nigeria for commodity associations and anchor companies.
Heritage Bank is pleased to work with CBN and other stakeholders such as the wheat farmers association of Nigeria, wheat farmers, processors and marketers association of Nigeria, lake chad research institute and other development partners, flour mills of Nigeria and several seed companies and others to support over 100,000 farmers in wheat production.
We are glad to work with LCFE to ensure its sustainability and deepen investment opportunities in agricultural commodities, solid minerals and energy space”. Awe said
Heritage Bank will expand its footprints to other commodity value chains during planting season. According to Awe, the bank is currently evaluating and reviewing expressions of interest from interested parties.