The Securities and Exchange Commission (SEC) has stressed the need for standardisation of the country’s commodities to enhance global acceptance and boost the Gross Domestic Product (GDP).
The Director-General of SEC, Mr Lamido Yuguda, said this at the Commodities Standards Sensitisation workshop organised by the commission in partnership with the Standards Organisation of Nigeria (SON) on Monday in Lagos.
Yuguda said that the Federal Government thrive to achieve a sustainably diversified economy would be achieved by ensuring adherence to standards to boost the country’s competitiveness in the global market.
According to him, the establishment of relevant standards will significantly transform the Nigerian commodities trading ecosystem.
“As Nigerians thrive to achieve a sustainably diversified economy, given the current drive to guarantee food security, there is an urgent need for more complementary comforts from the government, regulators and critical stakeholders to ensure the approval and effective adoption of appropriate local standard benchmark against international practice to establish quality and reverse the unwarranted situation of perennial rejection of the Nigerian produced commodities,” he said.
Yuguda represented by the Executive Commissioner Operations, SEC, Mr Dayo Obisan, the unique feature of the commodities exchange globally was the standardisation of the commodities traded on the platform.
He noted that each commodity traded on the exchange was graded by quality, size, weight and other criteria.
Yuguda said that the determination of these grades and standards was dependent upon improved local standards which would take into cognizance internationally accepted standards.
“On that note it is in recognition of the fact that the statutory responsibility for standard setting in Nigeria lies in the Standards Organisation of Nigeria.
The Executive Management of the Commission on behalf of all stakeholders engaged with the management team SON, to ensure the expedited approval and publication of standards commodities.
“As the establishment of relevant standards, it will significantly transform the Nigerian commodities trading ecosystem.
“Sequel to that engagement, the ecosystem roadmap implementation committee comprising key stakeholders has been working on the development of grading and standardisation system.
“The initial stage of the development process will concentrate on delivery of standards for agricultural commodities,” he added.
The director-general disclosed that SEC was working with SON to create awareness for existing agricultural commodities standard.
He noted that feedback from stakeholders on the standards to be considered in this workshop and initiate a view of inadequate standards applicable would be very beneficiary.
“We strongly believe this is a project of national importance, given that that commodities exchanges value chain has significant value and can transform our economy.
“It is, therefore, my expectation for this workshop and other stakeholders’ engagement to serve as a rallying point for inclusive standards development process. As the ecosystem is driven towards standardisation, the broader society will be impacted for greater prosperity,” he said.
Yuguda recalled that SEC as part of the implementation of the 10-year capital market masterplan, constituted a technical committee in commodities trading ecosystem.
He said that the mandate of the committee was to identify challenges with the existing framework and develop a roadmap for a vibrant ecosystem.
In his remarks, SON Director-General, Malam Farouk Salim, said that the organisation was willing to collaborate with relevant stakeholdersin ensuring that the development of standards follows the best international principles of standard development.
Represented by Dr Omolara Okunlola, Head Food Group, Salim said the organisation in line with its mandate would continue to promote standards and ensure it follows international principles.
He said that SON would continue to promote confidence of Nigerians in Nigerian produce and ensuring that SON in line with the Federal Government various policies were developed in such areas.
“For the first time in history, we have the strategy already outlined under the Nigerian National Standardisation Strategy. If you go through the strategy, you can see we have listed out standards to be developed.
Under the agriculture, we have energy, transport, industry, a focus on SMEs, we also have for the health sector. The strategy is a living strategy, as policies from the government come up, we try to update the strategy,” he said.
Speaking on rejection of Nigerian produces outside the country, Salim said that rejection of produces was not due to last of standards but non-compliance to standards.
“If you want to export any produce try to contact SON, we have 42 offices presently in Nigeria. So, when you get to know what you really need in relation to that produce you want to export, it will reduce rejection.
“Our standards are based on international best practices, we are custodian of the standards but standards are developed by the populace not by us.
“We are just given the mandate to be in custody of those standards, make sure that when you want to develop it, get everyone as many people that are interested, as many stakeholders we can identify, we contact them and we follow those principles,” Salim added.
He listed the principles as transparency, openness, stakeholders involvement and consensus.
Also speaking, Chairperson of the Commodities Trading Ecosystem Implementation Committee, Ms Daisy Ekineh said with the strong global push for green economies and a net zero carbon emission, the era of fossil fuel in powering development was fast coming to an end.
Ekineh explained that for an oil dependent economy like Nigeria, “it is a race against time to effectively diversify the economy.”
Ekineh said there was no doubt that efforts were on-going in this direction as evidenced by the various policies and programmes of government and the increasing contribution of the non-oil sectors to GDP which now exceeds 90% of GDP.
“The progress is commendable. Nonetheless, efforts need to be invigorated to speedily diversify the economy in all respect, for while the oil sector has shrunk in its contribution to GDP, it remains quite dominant in foreign exchange receipts and export trade.
“The economy is in other words, still mono product in some respect and significantly lacking in export diversification.
“The nation’s import requirements, its foreign reserve build – up and budget funding are still largely dependent on crude oil receipts. This is clearly not sustainable and a major risk factor of the economy; being vulnerable to the vagaries of the global oil market.
“The solution lies in the development of non- oil commodities like agriculture and solid minerals which can have significant multiplier effect on the economy.
“If well developed, these sectors can provide steady industrial raw materials, create jobs, bolster export earnings and reduce demand for foreign exchange and generally facilitate industrial development, particularly the manufacturing sector,” she said.
Ekineh said the value chain for the commodities sector was quite huge and each aspect of the chain, creates its own sub value chain which in itself can significantly impact the economy.
She, however, said that the nation cannot optimally develop the commodities sector and its export trade without setting acceptance standards and grading for tradable commodities, be they for industrial use, export or otherwise.
Ekineh added that such standards should be reviewed periodically and aligned with global best practice for international acceptability and export promotion.
“Standards and grading create trust, provide safety assurance and promote the integrity of the commodities market/sector as participants know exactly what the quality of a commodity is and can without doubt, purchase particular grade of commodities which suit their purpose. In other word, they know and have the assurance of what they are buying” she added.
One of the particpants, Mr Mohammed Awami, Head, Trade Finance Department, Nigerian Export-Import Bank (NEXIM), said that the importance of standards could never be over emphasised.
“Standards setting are very important, without good standards, market access become very challenging, ” Awami said.
