Nigeria Aims to Diversify Earnings Away from Oil, Launches Gold Trading at New Bourse

Nigeria’s newly licensed Lagos Commodities and Futures Exchange, started trading gold ahead of its official launch this week. This is the first time gold is offered on a bourse in Nigeria. The country’s Securities and Exchange Commission licensed the Exchange to trade gold with the specification of the London Bullion Market Association’s 99.99% purity, as the bourse targets globally acceptable pricing and quality.

The exchange’s formal launch is scheduled on July 28 and will trade, in addition to gold, other commodities, mostly agricultural products.

Nigeria is Africa’s largest crude producer and has been scrambling to diversify earnings with public and private sector collaboration. The primary target is to develop other mineral resources such as gems, zinc, iron ore and lead to help reduce the country’s reliance on oil exports. 90% of Nigeria’s export earning comes from oil. Last year, Thor Explorations Ltd. recorded the country’s first commercial gold output from its Segilola mine, with a target of 85,000 ounces a year.

The commodities exchange aims to provide more opportunities for Nigerian stockbrokers and reduce their dependence on the volatile equities market.

The exchange got approval three years ago and has been building systems to support commodities trading by providing access to insurance, warehousing, custodians, a credit bureau and banks. The platform will allow remote and physical trading.

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