Gold trading kicked off on Nigerian exchange ahead of its official launch. This will be the first time the metal will be offered on a bourigse in the West African nation.
The Lagos Commodities and Futures Exchange is newly licensed by the Securities and Exchange Commission to trade gold with the specification of the London Bullion Market Association’s 99.99% purity, targeting globally acceptable pricing and quality, according to Akinsola Akeredolu-Ale, managing director of the Lagos bourse.
“The exchange is scheduled for a formal launch and will in addition to gold trade other commodities including cashew, shea butter, paddy rice, maize, soy beans and sorghum. The aim is to diversify the asset base of the capital market and improve government revenue sources,” Akeredolu-Ale said.
Public and private-sector collaboration
Nigeria, Africa’s largest crude producer, is encouraging public and private-sector collaboration to develop other mineral resources such as gems, zinc, iron ore and lead to help curb dependence on oil, which accounts for about 90% of export earnings.
The commodities exchange will broaden opportunities for Nigerian stockbrokers and reduce their dependence on the volatile equities market. It was established by the Association of Securities Dealing Houses of Nigeria to provide a platform for its members to diversify trading revenue.
The exchange got approval three years ago and has been building systems to support commodities trading by providing access to insurance, warehousing, custodians, a credit bureau and banks. The platform will allow remote and physical trading. It plans to start trading 14 other products by the end of 2023, including cashew and shea butter by the next harvest season starting in September. It has registered 40 dealing member firms to offer the products.