Nigeria’s AFEX commodities exchange launches African expansion

AFEX Commodities Exchange Ltd., Nigeria’s first private licensed commodities bourse, is planning to expand its operations to seven additional African markets.

The company intends to open offices in Ivory Coast this year and Ghana in 2024, followed by expansion into Benin, Togo, Tanzania, Ethiopia, and Zambia, its CEO, Ayodeji Balogun told Reuters news agency.

AFEX, which was founded in 2014, currently trades in nine commodities in Nigeria, Kenya, and Uganda, including corn, wheat, sorghum, and cocoa.

The current global turmoil caused by Russia’s invasion of Ukraine has dealt a serious blow to essential food commodity shipments to Africa, exacerbating existing trade challenges.

To support its expansion plans, AFEX aims to raise 30 billion naira ($65 million) in debt this year. The funds will be used to boost storage capacity to 1 million tons by 2025, obtain more commodities exchange licenses, and introduce gold and derivatives to its trading portfolio, Balogun said.

AFEX anticipates that the African Continental Free Trade Area, which aims to eliminate trade barriers across the continent, will unlock significant value for its spot and exchange traded contracts, fixed income products, and derivatives.

Balogun, believes that expanding intra-Africa trade will bolster national productivity and food security for countries involved. Currently, AFEX handles daily transactions worth approximately 2 billion naira ($4.3m).