AFEX to expand commodities exchange with new investment

AFEX Commodities Exchange Limited says it has received an investment from Consonance Investment Managers, a sub-Saharan Africa early-stage and growth investment firm.

In a statement to announce the investment, the exchange said the funds received will be used to increase the liquidity of the commodity markets, and strengthen operations and technology systems.

“AFEX will ease the access of retail and institutional investors to the commodity markets in Nigeria by deploying its established infrastructure to securitize agricultural products, ensuring efficient and transparent clearing and settlement,” it said.

“To support the growth and stability of its systems, AFEX will also continue to build out technology solutions that support traceability: covering activities all the way from the financial inclusion of producers, through the outreach operations, and AFEX’s warehouse receipt system, to a trading platform that fosters shared prosperity between producers, processors and investors.

“With more participation in the sector, more innovative products will be listed over time, translating to growth for Nigeria’s capital market and increased funds being directed towards the agricultural sector in the country. This part of AFEX’s operations requires the deployment of funds towards market sensitization, training and product development.”

Commenting on the investment, Ayodeji Balogun, AFEX CEO, said: “We are delighted to welcome Consonance investment managers as partners on this journey. The future requires AFEX to provide our infrastructure as a service to the market and unlock capital for the agriculture sector in Nigeria.

“We will grow our operations ten-fold over the next five years; we also aspire to increase funding to agriculture in Nigeria from about N500 billion ($1.5bn) to more than N2 trillion ($7.5bn) by 2025,” he said.

Mobolaji Adeoye, the managing partner at Consonance investment managers, said the investment will help deepen the capital market in line with the mission of the Securities and Exchange Commission (SEC).

“We are proud to support Ayodeji and the AFEX team in their mission to transform Nigeria’s agricultural sector,” he said.

“AFEX increases trust and transparency in local agricultural supply chains by connecting farmers to the market. AFEX has established the infrastructure which will undergird Nigeria’s food security agenda and the Central Bank of Nigeria’s economic diversification program.”

AFEX Commodities was founded in 2014 and deals in the securitization of agricultural products.