NIGERIA – AFEX Commodities Exchange Limited (AFEX), a leading private commodities exchange company in Nigeria, has launched a 5-year impact report, reviewing its operations since it launched in 2014.
Since its inception, the organization has set out to build a platform that addresses major development challenges in Africa’s food systems by investing in innovations, with the potential for sustainable social impact in rural households and the larger society.
“When we started AFEX, we recognized the need to create a systemic and sustainable change in the commodities market by creating a fair and efficient market for trading commodities.
“We looked at the significant issues that had an impact on our food systems, particularly related to the challenges of the smallholder farmers,” said Ayodeji Balogun, CEO, AFEX.
AFEX’s core is the mission to create an efficient, inclusive, and vibrant market that promotes a fair exchange for everyone involved in the value chain.
This it has done by working with smallholder farmers through registration, profiling and financial inclusion, all the way to facilitating access to inputs and eventually plugging them into a market for trading their commodities.
To date, AFEX has established a reliable structure for physical trade that includes storage infrastructure, knowledgeable talent and a bespoke value chain management platform, WorkBench, that facilitates the entire farm to factory process.
The organization also provide access to spot markets where farmers can follow price trends and sell their products on the AFEX trading platform.
A key value that farmers derive from being a part of the platform’s ecosystem is the timely settlement of trades as they get cash settlement for their transactions within 24hrs of trade.
Being uniquely positioned as a licensed commodities exchange, AFEX designs and structures instruments that give investors an alternative asset class while providing necessary finance for commodity value chain activities. The technology platforms also support data reporting systems.
These it does through its platforms, Workbench and ComX, an electronic platform where securitized commodity assets are traded and is available on web, iOS and Android.
Further to that, AFEX through its outreach program disseminates on how farmers can maximize their earnings from harvested produce by reducing post-harvest losses, and ensuring that the products remain at top-grade.
The program also includes educating the farmers on the right time to sell their produce, and how to measure and sell based on weight, as against the normal market practice of buying based on volume.
“Our founding goal at AFEX – to support Africa’s food security – has seen our operations poised to strongly contribute to SDGs 1,2,5,8, and 12 – advocating for no poverty, zero hunger, gender equality, decent work and economic growth, and sustainable production and consumption.”
Ayodeji Balogun, CEO, AFEX.
Achievements in the last 5 years
In fulfilling these goals, over the last five years, the organization has built a network of over 160,000 farmers and cumulatively facilitated over 200,000MT in trades, matching orders from producers and brokers with buyers on the trading platform at fair prices.
By focusing on turning farming operations into profitable livelihoods, AFEX has built Nigeria’s largest supply chain infrastructure, giving producers access to credit, inputs, and markets, which are required to generate sustainable income across the value chain.
The organization has also worked with the Agribusiness and Marketing Unit of the Federal Ministry of Agriculture and Rural Development (FMARD) to review the Warehouse Receipt Bill and re-establish the pulses value chain relationship with India.
AFEX became a member of the technical committee set up by the Securities and Exchanges Commission (SEC) to create a roadmap for the Commodities Trading Ecosystem.
Future prospects
The company CEO highlights that the inspiration behind the work being done at AFEX is in connection of to five Sustainable Development Goals (SDGs) 1,2,5,8, and 12.
“Our founding goal at AFEX – to support Africa’s food security – has seen our operations poised to strongly contribute to SDGs 1,2,5,8, and 12 – advocating for no poverty, zero hunger, gender equality, decent work and economic growth, and sustainable production and consumption,” said Ayodeji Balogun.
This further guides the company into the future, as in its next five years journey it aims to reduce poverty for the smallholder farmers in the commodities ecosystem; eradicate hunger and achieving food security; achieve gender equality and empowering all women and girls; promote sustained, inclusive, and sustainable economic growth, full and productive employment; and reduce food loss from post-harvest to distribution, thus promoting responsible consumption and production.
“By aligning our mission and activities with SDGs we will continue to find innovative ways to deliver value across the ecosystem and look forward to establishing new relationships,” he said.
The company’s goal continues to center around themes of efficient and inclusive markets, economic growth and inclusion in a way that reaches more producers, unlocks more finance for commodity value chains and facilitates greater volume of trades to outfit processor requirements.
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