SEC restates commitment to commodities ecosystem devt

The Securities and Exchange Commission (SEC) has reiterated its commitment to developing the commodities ecosystem in Nigeria to boost its non-oil sector.

The Director-General of SEC, Lamido Yuguda, stated this at the conference over the weekend, with the theme ‘Boosting Domestic Capacity for Sustainable Export Earnings’. Yuguda who was represented by the Director, Lagos Zonal Office of the Commission, Hafsat Rufia, noted that development of the commodities ecosystem would help the country achieve its quest for sustainable foreign exchange earnings and economic development. The Commission’s boss said, “We believe that implementation of the roadmap for a vibrant commodities trading ecosystem in Nigeria by the Commission will support development of the agricultural sector and diversification of the Nigerian economy and, ultimately, advance the country towards attaining sustainable foreign exchange earnings.”

He added that it is imperative that the country focuses on all the sustainable foreign exchange earning avenues of the capital market for support over the medium to long

term.

“We must, therefore, leverage on the capital market through the commodities ecosystem, the equity and bond markets to develop and exploit all the potential sources of forex.”

According to data from the National Bureau of Statistics, the total value of capital importation into Nigeria in the second quarter of 2022 stood at $1.535 billion. The largest amount of capital importation was received through portfolio investments, which accounted for 49.33 per cent ($757.32 million). Foreign Direct Investments (FDI) accounted for 9.58 per cent or $147.16 million while Other Investments stood at 41.09 per cent or $630.87 million.

The largest amount of portfolio investment went to money market instruments – 55.8 per cent ($422.56 million), followed by Bonds followed with 42.5 per cent or $322.04 million while Equities accounted for 1.68 per cent or $12.72 million of portfolio investment in the second quarter of 2022. The SEC DG stated that the Securities and Exchange Commission continues to advocate for a unified foreign exchange rate in order to attract more foreign portfolio investments into the country, adding “We appreciate the efforts of the Central Bank of Nigeria in exchange rate management and will support in whatever way we can to enable achievement of the objective of exchange rate stability.” Representing the Managing Director and Chief Executive Officer of Bank of Industry (BoI), Mr. Olukayode Pitan, the Project Officer, Ominiaboh Uyoyou Jermila, said the national budget is heavily reliant on the revenue generated from the oil sector, lamenting that since the 70s, the focus on oil as a major source of foreign exchange has negatively impacted growth in the non-oil sector and has led to decline in its contribution to foreign exchange earnings. He noted that, nonetheless, the non-oil sector contribution to GDP has been significant, pointing out that during the 2008 global financial crisis the non-oil sector helped to absorb extra natural shocks caused by the declining oil revenue.