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Privatisation: Nigeria commodity exchange yet to resume activities

by Business News Report

The Nigeria Commodity Exchange (NCX) said it has yet to resume activities due to the ongoing privatisation of the organisation by the Federal Government.

 The Group Head, Management Services, Mrs Zaheera Baba-Ari, said in Abuja that the organisation was in the process of revitalisation before the privatisation was announced.

 She said the NCX did not embark on any trade in 2013 adding that since the inception of the office in 2007, it had not performed optimally in terms of trade due to inadequate infrastructure

“The whole of last year, we have been doing the revitalisation; we did not trade; there was no transaction for 2013. And since we even started in 2007, the volume of transaction has been very low because of the absence of infrastructure. Farmers co-operatives, commercial farmers, national grades and standards, enabling laws, all of those things were not there when the exchange started as a commodity exchange,’’ she said.

According to Baba-Ari, the low level of trade by the organisation is the reason government decided to privatise it which is a commendable effort by the government.

 “ The exchange has been slated for privatisation and it is in order because all over the world, commodity exchanges are privately owned entities. However, in developing countries such as ours the norm is usually that the government jump starts it because of the various infrastructure needed that the private sector cannot provide,’’ she added.

She noted that countries that had embarked on commodity exchange without intervention from government never excelled.

“Countries that have started private commodity exchanges, just like that, without government input have not fared well, they have all failed. The only place that is successful as a private entity is in South Africa and that is because they have very big cooperatives and they have commercial farmers,’’ she said.

Baba-Ari, however, added that the government was making tremendous efforts to put infrastructure in place to curb the challenges being faced by the commodity exchange.

 She added that the privatisation was one of such efforts by the government to address the challenges.

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