BusinessFeatured

CBN $200bn repatriation: Heritage Bank, LCFE explore opportunities in export revenue

161

As part of its support to the Central Bank of Nigeria (CBN) to raise $200 billion in foreign exchange repatriation from the non-oil exports over the next three to five years, Heritage Bank Plc, Lagos Commodities and Futures Exchange (LCFE) and other participating financial institutions have explored opportunities in export revenue from the commodities Ecosystem.

This was disclosed at a breakfast meeting organized by LCFE with bankers, tagged, “The CBN RT200 FX Programme: And Potential of Export Revenue from the Commodities Ecosystem”.

The Divisional Head, Agribusiness, Natural Resources & Project Development, Heritage Bank, Mr Olugbenga Awe, said the promotion of investment in commodities ecosystem by financial institutions in partnership with LCFE in its various assets trade in agric commodities, energy and solid minerals would increase liquidity support from local commodity exportation.

According to him, it will also boost the race for the $200 billion in foreign exchange repatriation and reduce the pressure on exchange rate.

Awe identified challenges which may hinder financial institution’s efforts in supporting the commodities ecosystem to drive the CBN’s RT200 FX target.

He added that the challenges include inadequate export finance resources, lack of dependable source of local product prices, risk of haulage to bad roads amongst others.

Read Also: UBA, Cellulant partner to expand reach to 19 markets across Africa

He said in a bid to significantly boost local production of exportable commodities and drastically reduce the country’s dependence of oil revenue, financial institutions must play the role of market markers to the Commodity Exchange (COMEX), thereby bringing liquidity to the exchange.

“With COMEX as a risk mitigation platform, there is need for the Warehouse (WR) finance structure to be registered with LCFE and the collateral management in place, which is within the parameters set by banks.

“Banks must actively participate in crop receipts, liaise with its brokers to develop the value chain around a well market structure warehouse receipts systems (WRS).

“This would help stimulate demand amongst players from the aggregators, off-takers for standardized contracts that help deepen the value chain while providing financing that increased volumes traded.

“Promoting investment in commodities ecosystem via structured WR finance would bring about value addition to commodities with the help to moderate the prices, as the expected increase in demand would increase revenue export and make deposit money banks self-sufficient in meeting the FX needs of their customers,” he said in a press statement given to Persecondnews.

Awe, who enumerated how financial institutions can partner with commodity exchange especially LCFE to deepen their foot prints in various asset classes traded by LCFE, also referenced what Heritage Bank is doing in the Wheat Value Chain together with CBN investing N40 billion which will scale up wheat production during harvest season.

According to him, whatever can be achieved in wheat can be replicated across various value chain in rice, maize, others and ensuring that there is link to the commodity exchange.

In his remarks, the MD of LCFE, Mr Akin Akeredolu-Ale, who commended Heritage Bank for its sterling efforts in deepening its footprints in agribusiness, called on banks and other organisations to take advantage of the “catalytic and transformational approach” to support CBN RT200 FX initiative.

He stressed that to achieve the target, there was need for creation and registration of Bank Commodity Desks with LCFE and Central Securities Clearing System (CSCS).

Akeredolu-Ale also noted that the stakeholders’ structure in financing the commodities ecosystem include Commodity Exchange, Commercial Banks, Non-Interest Banking, Merchant Bank.

The LCFE boss decried that Nigerian economy was still import driven and depended largely on export of petroleum to meet FX earnings.

He, however, said LCFE has lined up products such as commodity instrument, commodity backed notes, Exchange traded funds, Commodity Spot Contracts amongst others, as a bumper for driving huge export revenue from commodities ecosystem to fast track the actualisation of $200 billion in FX repatriation.

Leave a comment

Related Articles

CBN sells fresh dollars to BDCs at N1,021/$ as naira loses steam

The Central Bank of Nigeria (CBN) has issued another circular to Bureau...

Naira bullish gains restore confidence among investors, businesses – CBN Gov. Cardoso

The Governor of the Central Bank of Nigeria (CBN), Dr. Yemi Cardoso,...

Pres. Tinubu commends Dangote Group over new gantry price of diesel

President Bola Tinubu has applauded Dangote Oil and Gas Limited for reducing...

Industry and Trade Minister promises Nigerian Breweries, business community enabling environment

The Minister of Industry, Trade, and Investment, Dr. Doris Uzoka-Anite, has reaffirmed...

Transcorp Power Plc grows topline by 57.03%, profit up by 75% in 2023 audited results

Transcorp Power Plc (Transcorp Power), one of the power subsidiaries of Nigeria’s...

UBA records impressive gross earnings rise of 143%, profit hits N757.7bn in financial year 2023

The United Bank for Africa (UBA) Plc has recorded a 143 per...

Breaking: Nigeria to get oil-backed $1bln Afreximbank loan in May

Nigeria is set to receive $1.05 billion from a syndicated loan backed...

Breaking: CBN sells $10,000 to BDCs at N1,101/$

The Central Bank of Nigeria (CBN) on Monday announced the sale of...

Premium Pension Ltd., industry leader, records impressive N1.134trn revenue growth in 2023

A leading pension fund administrator in Nigeria, Premium Pension Limited, has said...

Transcorp Group records robust growth in 2023, revenue up by 47.3%, profit-before-tax of 93.5% Transnational Corporation Plc

(“Transcorp” or the “Group”), Nigeria’s leading listed conglomerate, has announced its financial...

Updated: We raised interest rate to 24.75 percent to fight inflation – CBN

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN)...

Don’t sell dollar above N1,269, CBN orders Bureau de Change

As part of measures to strengthen the naira against the dollar, the...

Dangote set to disburse N15bln food items to 774 LGAs to cushion harsh economic conditions

Nigerian businessman and industrialist Alhaji Aliko Dangote says he has allocated N15...

Naira strengthens to N1400/$ at parallel market as speculators sell

The naira strengthened on Wednesday to close at N1400/$1 in the parallel...

Just In: Zenith Bank names Adaora Umeoji as its first female Group Managing Director

The Board Directors of Zenith Bank Plc has announced the appointment the...

Nigerian Business Community to FG: Use Ghana Trade Office to solve our problems

The Nigerian business community in Ghana has urged the federal government to...

Heirs Holdings tells story of transformational investment in Africa, launches its first-ever TV commercial

Heirs Holdings has launched its first-ever television commercial (TVC), showcasing the company’s...

Aig-Imoukhuede, co-founder, returns to Access Holdings as Chairman

Access Holdings PIc has announced the return of Mr. Aigboje Aig-Imoukhuede as...

CBN to sanction MfBs over late non-rendition of statutory monthly returns

The Central Bank of Nigeria (CBN) has directed all microfinance banks (MfBs)...

In a great leap forward, Heirs Holdings launches Heirs Technologies, set to lead Africa’s digital evolution

Heirs Holdings, a leading African investment company dedicated to improving lives and...