Project Description: Creating a national trading platform and supply chain network in carefully identified value chains, through which farmers and commodity merchants can access commodity and financial markets.
Grantee Name and Country: AFEX Commodities Exchange Limited (AFEX), Nigeria
Project Name: Grain Bank and Commodity Exchange
Grant Amount: £1,046,850
Project Start Date: 4th January 2016
Project Duration: Three years and three months
Value Chains: Maize, Millet, Sorghum and Cassava
Trading Corridor: Nigeria – Niger
AFEX Commodities Exchange Limited (AFEX) is a Public Private Partnership between Nigeria’s Federal Ministry of Agriculture and Rural Development and a consortium of private investors (Berggruen Holdings, Heirs Holdings, Ngali Holdings and 50 Ventures) established in 2014 to create a Warehouse Receipt System that will provide secured storage for grains which will serve as collateral for farmers to access finance and also allow farmers to get better prices for their produce.
AFEX is part of Africa Exchange Holdings founded in 2012 to develop inclusive capital markets in East and West Africa, and improve storage and food security systems.
Summary of Grantee Project
The West Africa Food Markets Programme is supporting AFEX to develop a grains bank and a commodities exchange platform where AFEX accredited warehouses are providing farmers with storage for their produce thereby extending their selling season until they can secure competitive prices. The farmers can use their warehouse receipts (e-WR) as collateral for financing from partner banks or they can trade with it on the exchange. In addition to providing storage for farmers the company is also facilitating access to other services such as finance and inputs with third parties. A trading room and warehouse has been established in Dawuna market in Kano, North Western Nigeria to service international trade along the Nigeria – Niger corridor. Additional warehouses have been established in other parts of the country. Already, more than 100,000 smallholder farmers have registered with the exchange.