Commodities exchanges seek more pension funds investment in capital market

The Managing Director of Lagos Futures and Commodities Exchange (LFCE), Mr Akin Akeredolu-Ale, has said that commodities exchanges are interested in exploring avenues for investing more pension funds in the capital market. 

Akeredolu-Ale stated this when the management of the Securities and Exchange Commission (SEC), along with LFCE, held a meeting with the National Pensions Commission (Pencom) in Abuja.  

Why the call: He expressed delight that the SEC is spearheading the move to boost the utilisation of pension funds in the market. He added that if pension funds are not reflated, inflation would keep affecting them. 

  • “The primary part of our economic raw materials is crude oil, if you don’t capitalise the primary sector, the manufacturing sector will suffer, same as the service sector. SEC has made provisions for the PFAs to invest in the commodities sector and this is expected to catalyse our economy and spur growth,” he said. 

Akeredolu-Ale reassured that the reflation of the assets under management will benefit people that have their assets as global pension assets are used to stimulate economies adding that the nation’s economy needs to be activated to create opportunities for pension assets to participate in the exchanges. 

He urged Pencom to look into its rules and encourage PFAs to develop an interest in investing in commodity assets on the commodities exchanges like LFCE. 

Need for collaboration: Director General of the SEC, Mr Lamido Yuguda expressed its readiness to collaborate with the National Pensions Commissions on areas that would assist in further deepening the commodities ecosystem. 

Yuguda who was represented by the Executive Commissioner of Corporate Services of the SEC, Mr Ibrahim Boyi, stated that the SEC is very passionate about the commodities sector as it has enormous benefits for the economy of the nation. 

  • According to him, “One of the key pillars of the Capital market Master Plan is the development of the commodities ecosystem which gives our nation the opportunity to diversify both the capital market and the economy and also create more products. 
  • “We have recorded a lot of successes in the sector so far and we see a lot of progress in the sector’s development. We are currently working with the Standards Organisation of Nigeria to develop standards to make these commodities acceptable in the international market. This would further boost our foreign exchange earnings and create wealth for our people,” he said. 

He said the SEC is seeking collaboration with PenCom to ensure economic development adding that the sector has huge potential if optimally developed. 

  • “We have witnessed major achievements by the LFCE and we are happy to see them progress. We are committed to creating the rules that will ensure investor protection. It is a strategic focus for us to deliver one of our key mandates which are market development that will lead to economic development. Our focus remains market integrity, market fairness and investor protection,” he said. 

Commodity central to development: The Managing Director of Lotus Capital, Mrs Hajara Adeola said the commodity space is very central to the progress and development of Nigeria’s economy and it is essential the entire financial system participates as it is developing globally. 

  • “The capital market is creating instruments, creating avenues for investments to grow the market and the economy. It is important we put these infrastructures in place to make it profitable for our nation” she said. 

Pension laws: Commissioner Technical of Pencom, Mr AnyimNyerere said the Pension laws are not static but dynamic adding that the Commission expects a comprehensive request to enable it to expedite actions on the matter. 

He expressed the desire of Pencom to work with relevant agencies to boost the economy and assured the SEC that Pencom would work within general laws to support the commodities trading ecosystem.