AFEX to commence Nigeria’s first ever exports through commodities exchange                                                                                                                          

AFEX, Nigeria’s pioneer agricultural commodities exchange, will soon commence the export of farm produce to global markets, following a deal it signed recently with Camscorp, another commodities exchange firm based in the UK.

Camscorp is one of the best trading UK commodities exchanges with operations across Europe, Asia, and the Middle East, and exports from about seven countries in West Africa, focusing on agricultural commodities, minerals, metals, biomass and lumber. It also invests funds in commodity supply chains to help working capital and new commodity ventures.

AFEX has always had excess market demand and expects its demand to swell up from 50,000 metric tons (mt) to 500,000mt in 2016, with closed contracts moving from between 18,000mt and 20,000mt to 160,000mt, out of which about 75 percent it says has already been confirmed and signed.

This export oriented partnership between Camscorp and AFEX may end Nigeria’s N250 billion annual losses from its underutilised air freight export market, as 13 airports designated for perishable cargo by the Federal Airports Authority of Nigeria (FAAN) have consistently failed to meet up with commercial expectations more than three years after the initiative was launched.

While countries like Kenya, South Africa, Benin Republic, Cote d’Ivoire, Ghana, Senegal, Ethiopia, Tanzania and Egypt are said to be participating in the trading of commodities such as fruits, fresh fish, vegetables and flowers through electronic exchanges, Nigeria, which produces these commodities in abundance, records zero participation.

“We traditionally trade soya beans, paddy rice and sorghum, but now we are starting a number of export crops, and ginger is the one that we are signing today,” Ayodeji Balogun, country manager of AFEX-Nigeria, said.

According to Balogun, “we already have contracts listed for cashew nuts and sesame seeds, and hopefully as we move along, we will be expanding our operations into other export crops that can help the country to diversify its economy and also increase the amount of non-oil dollar or hard currency generation.”

Nigeria recently experienced severe dollar shortages of around $200 billion required for the importation petrol, resulting in prolonged nationwide scarcity, according to data from Nigerian National Petroleum Corporation (NNPC).

Dollar earnings from trading activities on the AFEX commodities exchange platform could help plug such dollar shortages and respectively ease business operations and livelihoods for oil firms and citizens.

“The outside world sees Nigeria as complicated but you have made it easy by taking the northern right basket of the region and linking north and south. And now linking the north with the export of ginger is brilliant… and hopefully, this is the beginning of a long-term relationship,” Tim Shortley, chief operating officer at AFEX, said, while commending Balogun for his work in Nigeria.

“We at Camscorp have complete confidence in our partner AFEX to successfully work on exports of high quality Nigerian products together, and we are excited by the future potential, working on ginger, sesame seeds and similar high end Nigerian products,” said Simon Glossop, CEO of Camscorp.

Glossop said his company is currently spending a lot of time looking at cocoa in Nigeria because the quality is very good, expressing further that they are very interested in developing a robust supply chain for ginger, as Nigerian ginger, according to him, is among the highest quality in the world.

In his words, “we are interested in developing very strong, robust supply chains for agricultural commodities and particularly, we are very interested in ginger, fresh and dry sesame seeds, cocoa and cashew nuts.”

Muyiwa Azeez, director of agribusiness, processing and investment in the Federal Ministry of Agriculture and Rural Development, said the ministry was particularly delighted with AFEX for promoting the exchange and moving of economic crops outside the country.

Azeez urged AFEX to fast track the process, as the new government, according to him, intends to further reduce the amount of funds being spent on importing agricultural commodities, while increasing the quantum of foreign exchange generated from the exportation of commodities.

Jendayi Frazer, a managing partner at AFEX, said “the vision of the commodity exchange is threefold, one of which is to make Africa more globally competitive in international trade by supporting farmers and supporting businesses to reach international markets, as well as creating greater food security and food safety, thereby transforming agriculture into a viable business that is globally competitive, while deepening the capital market and the continent’s liquidity.”

Munir Gwarzo, director-general, Securities and Exchange Commission (SEC), who was represented by Elisha Tanko, confirmed that the capital market had seen a number of requests from some entities, including governments, being expressed on items being traded on the commodities exchange, particularly sheabutter and ginger, “so we believe that with the lead that AFEX has taken and the support that SEC is ready to continue to give, AFEX will become one exchange that will show others the way and help to boost the commodities market.”