eBusiness Weekly
Nigeria’s first private licensed commodities bourse plans to open offices in seven new African markets as it looks to take advantage of growing trade across the continent.
AFEX Commodities Exchange will expand to Ivory Coast this year and Ghana in 2024, before setting up in Benin, Togo, Tanzania, Ethiopia and Zambia, Chief Executive Officer Ayodeji Balogun said in a telephone interview. Founded in 2014, the firm already trades in nine commodities — including corn, wheat, sorghum and cocoa — in Nigeria, Kenya and Uganda.
Russia’s invasion of Ukraine has curbed shipments of essential food commodities to Africa, compounding obstacles to trade. AFEX plans to raise 30 billion naira (US$65 million) of debt this year to help fund an expansion that includes boosting storage capacity to 1 million tons by 2025, obtaining more commodities exchange licenses, while adding gold and derivatives to its trading portfolio, the CEO said.
The elimination of trade barriers under the African Continental Free Trade Area, will “unlock significant value” in AFEX’s spot and exchange traded contracts, fixed income products and derivatives, according to Balogun. Daily transactions currently total about 2 billion naira.
“With our expansion into African countries, we see a path to improve intra-Africa trade,” the CEO said. “This leads to increased productivity on a national level, allowing countries to be more food secure.” — Bloomberg
