NIGERIA – AFEX, Nigeria’s first private agricultural commodities exchange player has announced plans to raise US$65 million to fund its expansion plan into seven new African countries in a bid to capitalize on the growth in intra-African trade.
According to Eficon Agency, the leading private agricultural commodity exchange is making a strategic move as it looks to take advantage of growing trade across the continent resulting from the entry into force of the Zone Continental Free Trade Association (Zlecaf).
Since it first appeared on the inaugural list last year, AFEX has doubled in revenue and expanded operations into East Africa, having financed over 450,000 farmers and traded 526,850 metric tonnes of commodities in Nigeria, Kenya, and Uganda.
According to the company executives, AFEX plans to expand to 9 African countries within the next 10 years to create regional markets that balance demand and supply through intra-Africa trade.
“AFEX Commodities Exchange will expand its operations to Ivory Coast this year and Ghana in 2024, before moving to Benin, Togo, Tanzania, Ethiopia, and Zambia,” said Ayodeji Balogun, the exchange’s CEO.
Last year, AFEX ranked third on the overall FT Africa list while emerging as the fastest-growing in Nigeria and first in Africa’s Agriculture & Commodities category.
Balogun revealed among other development projects include increasing the storage capacity of its warehouses to 1 million tonnes by 2025, securing more commodity trading licenses, and adding gold and derivatives to its trading portfolio.
He further opined that the dismantling of the various barriers hampering intra-African trade under the AfCFTA should “ unlock significant value ” for spot contracts, exchange-traded contracts, fixed-income products, and derivative products offered by AFEX.
“With our expansion into African countries, we see the opportunity to consolidate intra-African trade. This will lead to an increase in productivity at the national level, and enable countries on the continent to improve their levels of food security,” he stressed.
The commodity exchange giant hopes that facilitating cross-border trade in Africa will result in increased regional trade volume as well as improving capacity to meet the demand of Africa’s growing population.