The Lagos Commodities and Futures Exchange (LCFE), the fIrst Commodities Exchange to be licenced to trade gold in Nigeria by the Securities and Exchange Commission (SEC), is set to admit Dukia Gold‘s diversified financial instruments, backed by gold as the underlying assets in a sector worth over N300 trillion.
As a prelude to the listing very soon, Dukia Gold explained that the instruments which would be in form of Exchange Traded Notes (ETN), Commercial Papers (CP) and other gold-backed securities would enable the company deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the government to diversify external reserve and create massive employment across the metal production value chain.
Addressing the financial journalists at the Pre-Listing Media Interactive Session in Lagos today, the Dukia Gold’s Chairman, Mr Tunde Fagbemi who applauded the Ministry of Mines and Steel Development and SEC for supporting trading of gold in Nigeria noted that this remained one of the ways to diversify Nigeria’s sources of foreign exchange at this critical period of Nigeria’s economy.
“ 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 facilitate our infrastructure development, expand capacity and create fungible products. This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.
“ We have refinery services to smelt metals with capacity to meet local and international demand. As a global player, we comply with the practices and procedures of London Bullion Market Association (LBMA) 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.” says Fagbemi.
Corroborating him, Divisional Head, Strategy and Business Solutions, Heritage Bank and only licenced gold settlement bank in Nigeria, Mr Olusegun Akanji, stated that 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. According to him, every transaction is auditable to protect investors.
The Managing Director, LCFE, Mr Akin Akeredolu-Ale, who commended SEC for issuing the Exchange a licence to trade gold
said Commodities Exchanges played strategic roles introducing structures into the ecosystem which was in urgent need for 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 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.”, said Akeredolu-Ale.
According to him, LCFE is ready to support all the stakeholders in the Gold Sector in the areas of market creation, dissemination of market information, price risk management, reduction of counter party risk for trades, price discovery and transparency, standardization, facilitation of commodity finance and
innovative applications for an exchange mechanism.
In his comprehension virtual presentation, Dukia Gold’ s Chief Technical Officer, Mr Akin Akintola highlighted some of the values that Dukia Gold shall bring into the market, saying it “ Dukia Gold’s refinery services is a value addition service to Nigeria’s export commodities. By exporting Bullion Bars and Coins, Dukia Gold is not only adding Value to Nigerian export but helping to bring in FOREX “.