The Nation (Nigeria)

Lagos to raise $2b through commodity notes

- By Taofik Salako, Deputy Group Business Editor

LAGOS State has launched a process to raise $2 billion by floating agricultur­al commodity notes as part of the state's strategic move to revolution­ise agricultur­e and food production.

As part of the arrangemen­ts, some top officials of the state government held stakeholde­r engagement meeting with the management of the Lagos Commoditie­s and Futures Exchange (LCFE) at the weekend, the second time in recent period.

Addressing the stakeholde­rs at the LCFE, Lagos State Commission­er for Agricultur­e, Abisola Olusanya explained that the state had determined to end food scarcity by transformi­ng agricultur­e through capital injection.

According to her, a large expanse of land had been developed to create central logistics as hubs in the key locations of the state.

She noted that to catalyse its five-year agricultur­al road map, the state is preparing to raise $2 billion from the private sector, in partnershi­p with the LFCE by floating commodity notes.

"The state has strong capacity to raise medium and long-term funds to execute developmen­tal projects. It had raised huge amounts from the financial market over the years without default. The government is fully committed towards total transforma­tion of agricultur­e in order to boost food production. We shall place premium on capacity building among others to drive our agricultur­al revolution," Olusanya said.

Lagos State's Commission­er for Finance, Dr Rabiu Olowo noted that Governor Babajide Sanwoolu had re-affirmed his administra­tion's commitment towards agricultur­al commoditie­s.

He lamented the poor contributi­on of agricultur­e to the gross domestic product of Lagos and the need to reverse the trend.

"We have a new road map to transform agricultur­e. We need to raise funds for this at the Lagos Commoditie­s and Futures Exchange. The contributi­on of agricultur­e to the gross domestic product (GDP) of Lagos State is less than two per cent. This is not heartwarmi­ng and we have to change the narrative. The good thing is that payback of the money we intend to raise is not contingent on sinking fund. The project will re-appraise itself. We shall work with competent financial advisers," Olowo said.

Managing Director, LCFE, Mr. Akin Akeredolu-ale, in his presentati­on, expressed optimism that LCFE shall provide opportunit­ies for the state government to meet its financial obligation­s.

"The Lagos State Government estimates the population of Lagos at 22 million which is rapidlygro­wing, calling the urgent need for food security. Lagos has the potential to be self-sufficient and has the potential to employ over one million people through capital market participat­ion, public private participat­ion and joint state partnershi­ps, among others," Akeredolu-ale said

He pointed out that the capital market has been a source of funding for Lagos State in the past and this time will not be different.

"We are proposing that Lagos State Government lists an Exchange Traded Note (ETN) of N100 billion in the first instance on Lagos Commoditie­s and Futures Exchange in a bid to fund the five-year agricultur­al road map," Akeredolu-ale said.

Chairman, LCFE Chief Onyenwechu­kwu Ezeagu said the Exchange was establishe­d in recognitio­n of the need to realise the potential of the country's drive towards the developmen­t of agricultur­e, energy and solid mineral resources and to put nigeria on global revenue map and enhance flow of foreign currency exchange in the country.

"The inaugurate­d five-year agricultur­al and food systems roadmap in Lagos State would also lead to wealth generation, value creation, food security, industrial­isation of the agricultur­al sector and the entrenchme­nt of inclusive socio-economic developmen­t of the state," Ezeagu said.

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