AFEX seals investment with Consonance Investment Managers to boost liquidit

AFEX Commodities Exchange Ltd (AFEX), a leading market commodity exchange in Nigeria has secured  an investment for an undisclosed amount from Consonance Investment Managers.

Mr Ayodeji Balogun, AFEX Chief Executive Officer, said in a statement in Lagos the funds would be used to increase liquidity of the commodity markets. Balogun added that the investment would strengthen the company’s 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 securitise agricultural products, ensuring efficient and transparent clearing and settlement.

“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,” he said. According to him, the key part of AFEX’s operations requires the deployment of funds towards market sensitisation, training and product development.

Balogun said that AFEX would continue to build out technology solutions that support traceability to support the growth and stability of its systems. “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 ( $1.5 billion) to more than two trillion naira ($7.5bn) by 2025,” Balogun stated .

Also speaking, Mr Mobolaji Adeoye, Managing Partner at Consonance Investment Managers, said that the company was proud to support AFEX. “We are proud to support Ayodeji and the AFEX team in their mission to transform Nigeria’s agricultural sector.  AFEX increases trust and transparency in local agricultural supply chains by connecting farmers to market. AFEX has established the infrastructure which will undergird Nigeria’s food security agenda and the Central Bank of Nigeria’s economic diversification program. It will also be vital in deepening capital markets in line with the mission of the Securities and Exchange Commission of Nigeria,” said Adeoye. The News Agency of Nigeria (NAN) reports that AFEX since its e stablishement in 2014 has developed and deployed a viable commodities exchange model for the West African market. AFEX has built a strong supply chain infrastructure to support the securitisation of agricultural products. It operates 45 warehouses in Nigeria’s key grain-producing areas and accounts for 100,000 MT of total national storage capacity.

Since 2014, the exchange has reached 106,000 farmers and traded 126,400 MT of commodities with a total turnover of N14.1billion. AFEX’s mission is to support Africa’s food security while promoting fair exchange of value among players in agricultural value chains. To achieve this goal, AFEX looks to drive financial inclusion for rural communities, develop technology for data collection and market access and introduce products that derisk the sector and enable the deployment of capital. However, Consonance Investment Managers invests in early-stage and growing businesses across sub-Saharan Africa. Consonance backs entrepreneurs who are building large and profitable enterprises that create systems to enable national wealth creation.

It focuses on the following sectors and themes: sccess to wealth creation, financial and capital markets infrastructure, access to essential services, among others.