Nigeria to diversify forex with gold trading

Nigeria is expected to deepen its foreign exchange (forex) earnings with the impending listing of Dukia Gold’s diversified financial instruments on the Lagos Commodities and Futures Exchange (LCFE). The Dukia Gold’s diversified financial instruments are backed by gold as the underlying asset in a sector worth over N300 trillion.

Chairman, Dukia Gold, Mr. Tunde Fagbemi, who spoke at a pre-listing media parley in Lagos, said the listing and commencement of trading on the gold-backed assets would generate forex for the government to diversify external reserves, increase capacity and create employment across the metal production value chain.

He said the instruments which would be in the form of exchange traded notes, commercial papers, and other gold-backed securities would enable the company to deepen the commodities market in Nigeria.

He noted that the crude oil and the cocoa market would have had a better outing if there were strategies put in place to regulate it right from inception.

Fagbemi, who applauded the Ministry of Mines and Steel Development and the Securities and Exchange Commission for supporting the trading of gold in Nigeria, noted that it remained one of the ways to diversify Nigeria’s sources of foreign exchange.

“We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange.

“The listing shall enable us to facilitate our infrastructure development, expand capacity and create fungible products.

“This has the potential to shore up Nigeria’s foreign reserve and create an alternative window for the preservation of pension funds,” he said.

He explained that gold-backed security was a hedge against inflation and convenient preservation of capital.

“We have refinery services to smelt metals with the capacity to meet local and international demand. As a global player, we comply with the practices and procedures of the London Bullion Market Association and many other international bodies.

“Our refinery will also have multiplier effects on the development of rural areas anywhere it is located. There must be constant power supply, good road network, and other social amenities, apart from employment opportunities for the rural dwellers,” he said.

Divisional Head, Strategy and Business Solutions, Heritage Bank, Olusegun Akanji, said the bank had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard.

Akanji said every transaction was auditable to protect investors.

The Managing Director, LCFE, Akin Akeredolu-Ale, commended the Securities and Exchange Commission (SEC) for issuing the Exchange licence to trade gold.

He said commodities exchanges played strategic roles in introducing structures into the ecosystem, which was in urgent need of regulation, funding, and data collation.

“Nigeria’s International Trade in Solid Minerals and commodities is behind par and the absence of a listed gold investible instrument on a commodities exchange limits the export potential for the exploration of solid minerals in Nigeria, particularly Gold.

“The need to harness the potential growth in the Nigerian solid mineral/gold sector and commodity trades justifies the timely establishment of a gold trading platform and the objectives of the promoters of Dukia Gold,” he said.

He said the LCFE was ready to support stakeholders in the gold sector in the areas of market creation, price discovery, dissemination of market information, among others.

The Chief Technical Officer, Dukia Gold, Akin Akintola, said the company was determined to put the nation on the map and at par with the world’s major gold and precious metals refining and producing nations.

Akintola emphasised that the firm had the capability, technicalities and the necessary accreditation to operate in the gold value chain.


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