SME Exporter’s Challenges: Suggested Solutions III

• Too many players in the product supply chain.
• Fraudsters in the product supply chain.
• No functional exchange platform to facilitate product sourcing.

Suggested Solutions- The government should put together a bill for an act that will lead to the establishment of the Nigerian Commodity Exchange. This exchange should create a platform for buyers and sellers of Nigerian commodities to meet, control the commodity prices and also put together and monitor the procedures for purchases and sales of Agricultural commodities and solid minerals in Nigeria. The law should stipulate the following as the responsibilities of the Nigerian Commodity Exchange among other things;

a)    This Exchange should create an online platform where registered sellers of commodities can post the item to be sold, specification and the ex warehouse price of the commodity.

b)    The online platform of the exchange should also enables registered buyers of commodities can post the items they intend to buy and the ex warehouse price of the commodity.

c)     The registered buyers should be mainly exporters that have a valid export license from the Nigerian export promotion council.

d)    The registered sellers should be merchants that have verified structures and competencies to buy, grade and warehouse commodities in different parts of the country.

e)    The exchange online platform is programmed to regulate commodity prices based on the demand and supply of commodity as posted by the buyers and sellers on the platform.

f)      The exchange should issue a document evidencing sales or purchase via the platform upon conclusion of any transaction by the buyer and seller.

g)    This exchange must mandate the farmers and local buying agents to sell only to merchants who are registered sellers of the platform of the Nigerian Commodity Exchange.

h)    The exchange is to ensure that the buyer have taken the delivery of the commodity purchase on the platform and confirm via the online platform that the quality and quantity are correct as stipulated by the seller online before the seller’s account is credited.

i)      The exchange should set a maximum period for the receipt of the buyer’s online confirmation of product purchased to enable the seller’s account to be credited accordingly.

j)     The exchange platform should allow for the trading of derivatives as the commodity exchange market matures and develops to international standard.

k)    The Nigerian Commodity Exchange should have a firm handshake with the Export Products Quality Control Agency in their operations in order to ensure that the buyer have great value for the money paid for any commodity on this platform.