EFFECT OF THE COMMODITY EXCHANGE ON THE EXPORT OF PRIMARY COMMODITIES IN NIGERIA
ABSTRACT
To manage the price risks associated with market functions and to ensure that the qualities of the commodity net with interventional standards, the federal government of Nigeria established the Abuja, security and commodities exchange the commodity exchange was expected to tackle the following set backs being faced by problems is exportation of primary commodities these include price instability, poor market information/intelligence, unsatisfactory quality of goods exported and weak infrastructures the literature provides general view about the working of a commodity exchange around the world and what is obtainable in Nigeria. The major objectives of primary commodities in Nigeria and to find out the contribution of primary commodities revenue the country’s GDP. The survey design was used in this study. The yearly data on these major commodities used was sourced from the Central Bank of Nigeria statistical bulletin and from interview of top management of the exchange and commodity brokers representing the farmers. Judgment sampling method was used to select three commodities out of twelve traded at the exchange multiple regression analysis using the current SPSs statistical software was used to evaluate the impact of price instability on volume of trade and effect of commodity revenues on country’s GDP. The findings of the study revealed, that the commodity exchange has not lived up to its expectations. Its ability to handle price instability massive dissemination of information to rural producers and provision of basic infrastructures is still doubtful. Government policies towards expansion and export of commodities are poorly implemented due to government focus on oil sector. The price commodities was discarded to have significant impact on export (T-value of 4.917 and big-value of 7.98) and big value 0.00. In order to have a effective and efficient commodity exchange like its counterparts around the world and to improve on our commodity exports, there is need for adequate dissemination of market information upgrading of basic infrastructures at the exchange adequate and continuous implementation of formulated policies and strategies and adequate price management for the producers. The existing commodity exchange has not been fully equipped to an international standard in order to link up with major exchanges around the world, in centuries the local producers are still lacking and these hampers the drink to encourage export of primary commodities. Therefore, we need to study and emulate the success factors that helped other functional exchange around the world. This will help in reducing glut of commodities around the country and made Nigeria a major exporter of primary commodities which in turn will help in increasing the revenue accruing to the country.