AFEX – Nigerian bourse plans expansion, commodities growth in 7 African states

AFEX, Nigeria’s first private licensed commodities bourse is set to open offices in seven new markets to benefit from growing trade across the continent.

AFEX Commodities Exchange, Nigeria’s first private commodities bourse, plans to expand to Ivory Coast this year and Ghana in 2024. The firm also has plans to expand to Benin, Togo, Tanzania, Ethiopia and Zambia, Chief Executive Officer Ayodeji Balogun said. The firm already trades in nine commodities — including corn, wheat, sorghum and cocoa — in Nigeria, Kenya and Uganda.

AFEX – Unlocking capital and powering markets

AFEX seeks to leverage Africa’s commodities and its local talent to build shared wealth and prosperity, according to the company. Its infrastructure and platform investments are designed to unlock capital and to power the African commodities markets. Founded in 2014, the company has developed and deployed a viable commodities exchange model for the African market and is on track to impact one million producers; providing services in productivity and value capture and access to finance and markets. The company aims to facilitate trade worth over USD 500 million in the next five years.

The Ukraine war

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 (USD 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, said Balogun.

The impact of free trade

The elimination of trade barriers under the African Continental Free Trade Area (AfCFTA), 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,” he said. “This leads to increased productivity on a national level, allowing countries to be more food secure.”

AFEX recently topped the Financial Times’ Africa Fastest-Growing Companies ranking. AFEX emerged as Africa’s fastest-growing company in 2023, with an impressive growth rate of 505.3%.

Agritech firms across Africa have been gaining traction with investors. Mahaseel Masr is the MENA region’s first B2B digital fresh produce platform, FarmerLine aims to support small scale farmers in Ghana, South African firm FarmTrace is developing a software-based produce management system, and e-Livestock Global uses livestock data to provide a range of services.