L–R: S & P Global Ratings’ Managing Director, Africa Research & Analytics and Country Head, South Africa, Samira Mensah; Special Adviser on Homeland Security to President Tinubu, General Adeyinka Famadewa (Rtd); Director-General, Securities and Exchange Commission (SEC), Dr Emomotimi Agama; Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Authority (NMDPRA), Malam Rabiu Umar; Managing Director and Chief Executive Officer, Lagos Commodities & Futures Exchange (LCFE), Akin Akeredolu-Ale and Executive Director, LCFE, Eyowan Ani during the presentation of licence to trade and clear Petroleum liquids to LCFE by NMDPRA in Abuja yesterday
The Lagos Commodities and Futures Exchange (LCFE) has secured a licence from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to facilitate the trading and clearing of petroleum liquids, in a development expected to deepen price discovery, transparency and investment in Nigeria’s energy market.
The approval provides LCFE with the regulatory foundation to establish a structured marketplace for petroleum liquids, linking the physical petroleum market with Nigeria’s capital market through regulated trading, clearing and settlement infrastructure.
The licence was unveiled in Abuja on Tuesday at a stakeholder event attended by senior representatives of the NMDPRA, Securities and Exchange Commission (SEC), S&P Global Ratings, Central Securities Clearing System (CSCS), Alliance Law Firm and other participants in the capital and petroleum markets.
Already, no fewer than 10 petroleum liquid traders have committed to participating on the Exchange, providing an initial pool of market participants for the development of the new trading ecosystem
LCFE Managing Director/Chief Executive Officer, Akin-Akeredolu-Ale, said the approval marked a defining moment for Nigeria’s commodities market, noting that the infrastructure required to support petroleum liquids trading was now increasingly coming together.
“ The issuance of this marks a defining moment for Nigeria’s commodities market. It gives us the regulatory foundation to bring petroleum liquids into a transparent, structured and technology-enabled marketplace, connecting the physical energy market with Nigeria’s capital market,” he said.
Akeredolu-Ale said the emerging market architecture would incorporate technology-enabled trading, two-way quotations, contract trading and settlement, as well as licensed collateral managers to strengthen oversight and risk management.
The development comes as Nigeria’s petroleum industry undergoes significant structural changes following the implementation of the Petroleum Industry act (PIA)deregulation of the downstream market and the commencement of operations by the Dangote Refinery.
NMDPRA Chief Executive, Mallam Rabiu Abdullahi Umar, said the Authority’s priority was to create a predictable, equitable and transparent regulatory environment capable of attracting investment and supporting the sustainable growth of the energy market.
According to him, the PIA, market deregulation and the emergence of large-scale domestic refining capacity have fundamentally altered Nigeria’s position in the global energy market.
The Director-General of the Securities and Exchange Commission (SEC), Dr Emomotimi Agama, commended LCFE for pursuing the initiative, describing it as an opportunity capable of transforming Nigeria’s commodities and capital markets.
S &P Global Ratings’ Managing Director, Africa Research & Analytics and Country Head, South Africa, Samira Mensa Mensahstressed the importance of credible market infrastructure, transparent pricing, benchmarks and credit ratings in building investor confidence.
According to Mensah, S&P has reclassified Nigeria from a frontier market to an emerging market, a development that aligns with the President’s ambition to grow the Nigerian economy to $1 trillion.
Onome Komolafe, Division Head, Business Services & Client Experience at CSCS, said the financial market infrastructure provider would support the new market through its depository, clearing and settlement capabilities, including digital asset recording and depository services.
Founder and Managing Partner of Alliance Law Firm, Uche Obi described the licence as a major legal and regulatory milestone for Nigeria’s commodities market, noting that it provides LCFE with the authority to facilitate the approved trading and clearing activities and underscores the regulatory and institutional capacity supporting the new market.
Market watchers described the receipt of the NMDPRA approval as a significant milestone in LCFE’s broader ambition to transform Nigeria’s commodities market and position the Exchange as a leading commodities trading platform in Africa.
