Abubakar Suleiman, CEO of Sterling Bank Plc, has stated that lack of trust is the key issue impeding the growth and development of the Nigerian commodity market.
He made the announcement while giving a welcome address at a webinar held recently to promote SABEX, a decentralized commodity exchange powered by blockchain technology. AgroCommodities as a Viable Asset Class was the topic of the webinar.
SABEX, which was created to promote the exchange of agricultural commodities, works with a network of buyers, financiers, warehouse operators, and other Agro commodity traders throughout Nigeria.
Traders – usually farmers – may use SABEX to secure instant loans to help their businesses expand by pledging their warehoused agricultural products as collateral.
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The webinar’s aim, according to Suleiman, was to build commodity market trust because there is currently no trust among players in the sub-sector, from farmers to micro players and exporters at all levels of the value chain.
He believes that confidence must be built in the agro commodity trading business’s payment, relationship, product, price, and delivery elements. “We need to financialize coommodities to the point that they are comparable to digital assets,” he said.
Dr. Adedoyin Salami, a Senior Fellow/Associate Professor and full-time member of the Lagos Business School, gave the keynote address and pointed out that agriculture is a major sector that accounts for one-quarter of the Nigerian economy.
Despite the devastating impact of the Covid-19 pandemic, which saw Nigeria’s economy contract in two consecutive quarters of 2020, he claims that the agricultural sector still employs a substantial number of people and has remained resilient over time.
Salami, who is also a member of the Nigerian Economic Summit Group (NESG) and the Chairman of the Federal Government’s Economic Advisory Council (EAC), believes Nigerian commodities will outperform all other asset groups, despite the fact that Nigeria is lagging behind other global players. Obscurity, lack of confidence, and accountability.
Obscurity, lack of confidence, and accountability, according to Ade Adefeko, vice president, Corporate and Government Relations at Olam International, are some of the issues plaguing the Nigerian commodity market.
He said that in the future, predictability, price stability, and the need to operate on the distorted agricultural space are all important, and that although opportunities abound, the market needs to be structured so that farmers can get the most value for their produce at the right price.
Tayo Aduloju, Senior Fellow, Public Policy and Institutional Development at The Nigeria Economic Summit Group, moderated the discussion (NESG).