Lagos Commodities Exchange, Heritage Bank to bridge $2b wheat import

Lagos Commodities Exchange, Heritage Bank to bridge $2b wheat import

The Lagos Commodities and Futures Exchange (LCFE) has partnered with Heritage Bank Plc to create a structure for trading on wheat contracts and its allied products, in a major move expected to drastically cut Nigeria’s annual wheat import of $2 billion.

Addressing members of the commodity ecosystem operators at the weekend, Managing Director,  Lagos Commodities and Futures Exchange (LCFE), Mr Akin Akeredolu-Ale  said the Exchange’s primary function was to create a structured platform for fungible tradable instruments that are de-risked by way of forward contracts through commodities products in agriculture, mineral resources, oil, and gas where issuers can also write an array of contracts.

He commended the Central Bank of Nigeria and the Securities and Exchange Commission (SEC) for the current initiative on wheat production and creation of enabling environment for development of the commodities ecosystem respectively.

According to him, 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,” Akeredolu-Ale said.

Former Executive Director, Lake Chad Institute of Research, Dr Oluwasina Olabanji lamented that Nigeria spends $2 billion annually on wheat importation due to insufficiency in commercial quantities and poor quality of primary input.

According to him, given the diverse uses of wheat, any country that lacks capacity to 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.

Divisional Head, Agribusiness, Natural Resources and Project Management, Heritage Bank Plc, Mr Olugbenga Awe said d to promoting development of agricultural value chains in Nigeria.

According to him, the bank’s involvement in the sector dated back to many years ago and it has always been at the forefront of ensuring overall growth and development of commodities products in Nigeria.

“The CBN’s Governor recently announced the apex bank’s N41 billion 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 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.

He said Heritage Bank will expand its  footprints to other commodity value chain during the next planting season and the bank is currently evaluating and reviewing expressions of interest from interested parties according to Awe.