In a remarkable move aimed at bolstering agricultural assets in Nigeria, the Lagos Commodities and Futures Exchange (LCFE) has taken a significant step forward with the launch of the N5 billion Series 1 of the N30 billion Eko Rice Contract. The contract was inaugurated by the Governor of Lagos State, Babajide Sanwo-Olu.
The introduction of the first Forward Contract into the commodities space will pave the way for listing on the LCFE’s trading floor at a later date. This contract will create a market for rice spots and futures derivatives, ensuring product standardization, increasing the availability of high-quality paddy rice, promoting adherence to global best practices, providing organizational support through collateral management services, and creating business opportunities for small-scale suppliers.
Governor Sanwo-Olu, during the launch of the Rice Contract, expressed his determination to make Lagos State the hub of rice production in Nigeria. He stated, “This is a significant milestone in our efforts to make Lagos State the hub of rice production in Nigeria. This will create job opportunities and wealth. Lagos State Rice has become a key driver in growing our economy. Our goal is to make rice available and affordable through enhanced rice production. We want the entire investing public to go into rice production and the entire value chain for the agricultural sector… We shall be deepening the market together. We are not just stopping at rice production. We are building a mega market hub in the whole of West Africa. We shall also create a space for the Lagos Commodities and Futures Exchange in the process so that there will be a clearing room to monitor the products from any part of the country and ensure a transparent system.”
Akin Akeredolu-Ale, the Managing Director of LCFE, commended the Lagos State Government for its initiatives in enhancing food production in Nigeria and assured Governor Sanwo-Olu of the Exchange’s readiness to support these initiatives. He stated, “By this singular act, Lagos State has proven once again its capacity and foresightedness in championing and promoting food security for the good people of Lagos State, in particular, and the entire country, Nigeria, in general. This collaboration will drive initiatives such as paddy rice supply to the Lagos Rice Mill in Imota, integration of rice value chain stakeholders in and outside of Lagos State, and the drive for paddy rice and head rice standardization in Lagos State. LCFE will provide an opportunity for investment in the rice value chain through the creation, onboarding, and listing of commodities instruments for paddy aggregation and trading, while also providing opportunities for rice distributors and stakeholders to trade on the Exchange through capital market operators.”
During his welcome address, Onyenwechukwu Ezeagu, the Chairman of LCFE, expressed gratitude to Governor Sanwo-Olu and his team for their support. He acknowledged that the capital market was opening up to the idea of commodities trading and commodity instruments, and this would not have been possible without the support and partnership of the Securities and Exchange Commission (SEC), capital market operators, and other stakeholders.
The event, attended by various dignitaries, including the Lagos State Deputy Governor, Obafemi Hamzat, marks a significant milestone in the agricultural sector, with the LCFE playing a pivotal role in promoting transparency, standardization, and growth within the rice value chain.