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| AFEX Nigeria Ltd |
It was supposed to be a gathering of just fifty at the
Transcorp Hilton but the numbers doubled, a clear testament to the fact
that many stakeholders have an appetite for learning the prospects for
agriculture from a properly run Agro-Commodities Exchange.
The Nigerian Commodities Exchange formerly known as the Abuja Securities and Commodities Exchange was set up to mitigate the heavy post-harvest losses associated with poor warehousing and the absence of a ready market for the disposal of farm produce at realistic prices. The Exchange was also supposed to provide a centralized marketplace where farmers can sell their products to a ready market. However, these goals have largely gone unmet, substantially on account of the lack of structural and institutional infrastructure.
It is this structure that international partnerships such as that between AFEX Nigeria Ltd. and INTL FCStone, which brought to birth the Commodities and Risk Management Seminar, foster. Being a major player in the international Commodities trading business, INTL FCStone has spotted the prospects of the Nigerian commodities market and has deemed it a viable business decision to move-in and nurture its emergence. But, it could not do it alone. Stuart Ponder, Senior Vice-President in charge of business relations for INTL FCStone alluded to the importance of this partnership when he stated that one of the factors that could derail their efforts in Nigeria is not finding the right partnerships. “We need the locals to guide us,” he said.
AFEX Nigeria Ltd turned out to be INTL FCStone’s choice, and for good reason. Presently, AFEX Nigeria Ltd. is powering the commodities market in Nigeria and ensuring that the concept of Commodities Exchange in the country does not die a natural death. Country Manager of AFEX Limited, Ayodeji Balogun posits that AFEX is creating a market place where products can be “securitized through proper storage and grain management”.
In achieving this, collateral management also features prominently, thereby providing tradable security instruments. “This is in keeping with international best practices where a buyer does not necessarily need to see the produce before he bids for and makes a purchase, Deji posits, adding that AFEX has, by so doing, “brought a lot of transparency into the process”. According to Ponder, who has worked in other African Markets, that is particularly what attracted INTL FCStone. In his words, “we have seen the focus attached to developing structured markets [in Nigeria] in recent times and we want this process to be successful because it will open opportunities for us.”
With oil trading at a record low, Nigeria is looking to diversify her economy and support individuals and organizations that are investing in this diversification. Organizations trading in commodities will therefore enjoy the goodwill of the government. This fact was underscored by the Director-General of Nigeria’s Securities and Exchange Commission, Mr. Mounir Garza. Describing the event as “timely” considering Nigeria’s resolve to radically diversify her economy, the SEC boss noted Nigeria’s ranking as a leading producer of some key commodities.
According to him, boosting commodities trading will “enhance the country’s global competitiveness in these commodities”.
Industry
watchers agree. In their view, given Nigeria’s current economic
climate, agricultural commodities trading is the way to go. Some have
even posited that farmland is better than gold. The primary reason for
this assertion is that no matter how difficult things get people will
always eat. Therefore, there can be no surer investment than one in a
sector which supports this basic need.
For this reason, Representative of Propcorm Makarfi, Mr Collins Apolo insisted that “we must consider ways to make farmers major stakeholders” in the commodities trade. This will require the active formalization and regulation of the commodities market which in turn will facilitate the entry of creativity & innovations”. He noted that AFEX has got to consider grassroots education of farmers – no matter how informal.
Farmer education has been ongoing with commodity producers seeing first hand the importance of registering with AFEX. Speaking on this Kelechi Okere, AFEX’s Sales Manager shared an anecdote about a farmer who had over-bagged his grains thereby shortchanging himself. Upon participating in the Input Financing Programme of AFEX, his grains were sorted and rebagged giving him more value than expected. This ultimately led up to the slogan, “AFEX baa wasa” meaning “AFEX no jokes”. Mr Okere pointed out that this singular occurrence is responsible for the increased number of registered commodity traders on their platform.
Executive Secretary, Federation of All Commodities Associations of Nigeria, FACAN, Alh. M. Gbadamosi was evidently happy about the opportunity being handed the farmers at enhanced business earnings. He informed the gathering that the Warehouse Receipt System is modeled after that of Ethiopia. “Our farmer cooperatives stand to gain a lot and we will mobilize them accordingly”.
There is sizable public sector involvement. Shehu Bello, Deputy Director of the Federal Ministry of Agriculture and Rural Development (FMARD) told AgroNigeria that the infrastructure being used by AFEX for solving commodity producer’s warehousing needs were provided in partnership with the FMARD. This typically confirm the importance of the private-public partnership in driving agricultural growth.
It would be correct to say that the Commodities and Risk Management Seminar achieved its aim of galvanizing stakeholders to take an interest in a market that has often been hitherto overlooked. The hands-on approach of the facilitators was a joy to participants as one of them was overheard saying, “I have never attended a seminar as good as this before.” Seasoned global Agro-commodity traders were on hand to practically demonstrate the workings of the commodities trading platform and the economic prospects therein. Adekunle Oluwadara, Managing Director of Dahra Global summed it up when she described the sessions as “awesome”., stating that they had “a great learning experience”.
The Dahra Global boss had good reason to be upbeat, as the Workshop attendees were taken through the six identified risk factors in agriculture commodity trade in Nigeria. They were also steered towards identifying and describing operational trends in commodity markets. As the lead Facilitator, Geoff Truman, stated at the beginning of the programme, the seminar was not a training session but an avenue for sharing and learning and interacting.
The final day saw participants discussing International Exchange Organization Structures and deliberating on whether a government run Exchange was more desirable than a private sector driven one. The high point of the day came in the afternoon session when the seminar hall was converted to a trading floor with participants joining a live trading session and getting firsthand experience of the thrills of trading.
AgroNigeria was on hand to provide back end and secretariat services that saw to the smooth running of the entire event. It’s CEO, Mr. Richard-Mark Mbaram cut short an international engagement to be present at the event. “We are very aware of what this portends for the entire sector, but particularly for the small holder farmer, in terms of market efficiency and income enhancement. That is why we decided to power this event”, Mbaram stated.
The Nigerian Commodities Exchange formerly known as the Abuja Securities and Commodities Exchange was set up to mitigate the heavy post-harvest losses associated with poor warehousing and the absence of a ready market for the disposal of farm produce at realistic prices. The Exchange was also supposed to provide a centralized marketplace where farmers can sell their products to a ready market. However, these goals have largely gone unmet, substantially on account of the lack of structural and institutional infrastructure.
It is this structure that international partnerships such as that between AFEX Nigeria Ltd. and INTL FCStone, which brought to birth the Commodities and Risk Management Seminar, foster. Being a major player in the international Commodities trading business, INTL FCStone has spotted the prospects of the Nigerian commodities market and has deemed it a viable business decision to move-in and nurture its emergence. But, it could not do it alone. Stuart Ponder, Senior Vice-President in charge of business relations for INTL FCStone alluded to the importance of this partnership when he stated that one of the factors that could derail their efforts in Nigeria is not finding the right partnerships. “We need the locals to guide us,” he said.
AFEX Nigeria Ltd turned out to be INTL FCStone’s choice, and for good reason. Presently, AFEX Nigeria Ltd. is powering the commodities market in Nigeria and ensuring that the concept of Commodities Exchange in the country does not die a natural death. Country Manager of AFEX Limited, Ayodeji Balogun posits that AFEX is creating a market place where products can be “securitized through proper storage and grain management”.
In achieving this, collateral management also features prominently, thereby providing tradable security instruments. “This is in keeping with international best practices where a buyer does not necessarily need to see the produce before he bids for and makes a purchase, Deji posits, adding that AFEX has, by so doing, “brought a lot of transparency into the process”. According to Ponder, who has worked in other African Markets, that is particularly what attracted INTL FCStone. In his words, “we have seen the focus attached to developing structured markets [in Nigeria] in recent times and we want this process to be successful because it will open opportunities for us.”
With oil trading at a record low, Nigeria is looking to diversify her economy and support individuals and organizations that are investing in this diversification. Organizations trading in commodities will therefore enjoy the goodwill of the government. This fact was underscored by the Director-General of Nigeria’s Securities and Exchange Commission, Mr. Mounir Garza. Describing the event as “timely” considering Nigeria’s resolve to radically diversify her economy, the SEC boss noted Nigeria’s ranking as a leading producer of some key commodities.
According to him, boosting commodities trading will “enhance the country’s global competitiveness in these commodities”.
Industry
watchers agree. In their view, given Nigeria’s current economic
climate, agricultural commodities trading is the way to go. Some have
even posited that farmland is better than gold. The primary reason for
this assertion is that no matter how difficult things get people will
always eat. Therefore, there can be no surer investment than one in a
sector which supports this basic need.For this reason, Representative of Propcorm Makarfi, Mr Collins Apolo insisted that “we must consider ways to make farmers major stakeholders” in the commodities trade. This will require the active formalization and regulation of the commodities market which in turn will facilitate the entry of creativity & innovations”. He noted that AFEX has got to consider grassroots education of farmers – no matter how informal.
Farmer education has been ongoing with commodity producers seeing first hand the importance of registering with AFEX. Speaking on this Kelechi Okere, AFEX’s Sales Manager shared an anecdote about a farmer who had over-bagged his grains thereby shortchanging himself. Upon participating in the Input Financing Programme of AFEX, his grains were sorted and rebagged giving him more value than expected. This ultimately led up to the slogan, “AFEX baa wasa” meaning “AFEX no jokes”. Mr Okere pointed out that this singular occurrence is responsible for the increased number of registered commodity traders on their platform.
Executive Secretary, Federation of All Commodities Associations of Nigeria, FACAN, Alh. M. Gbadamosi was evidently happy about the opportunity being handed the farmers at enhanced business earnings. He informed the gathering that the Warehouse Receipt System is modeled after that of Ethiopia. “Our farmer cooperatives stand to gain a lot and we will mobilize them accordingly”.
There is sizable public sector involvement. Shehu Bello, Deputy Director of the Federal Ministry of Agriculture and Rural Development (FMARD) told AgroNigeria that the infrastructure being used by AFEX for solving commodity producer’s warehousing needs were provided in partnership with the FMARD. This typically confirm the importance of the private-public partnership in driving agricultural growth.
It would be correct to say that the Commodities and Risk Management Seminar achieved its aim of galvanizing stakeholders to take an interest in a market that has often been hitherto overlooked. The hands-on approach of the facilitators was a joy to participants as one of them was overheard saying, “I have never attended a seminar as good as this before.” Seasoned global Agro-commodity traders were on hand to practically demonstrate the workings of the commodities trading platform and the economic prospects therein. Adekunle Oluwadara, Managing Director of Dahra Global summed it up when she described the sessions as “awesome”., stating that they had “a great learning experience”.
The Dahra Global boss had good reason to be upbeat, as the Workshop attendees were taken through the six identified risk factors in agriculture commodity trade in Nigeria. They were also steered towards identifying and describing operational trends in commodity markets. As the lead Facilitator, Geoff Truman, stated at the beginning of the programme, the seminar was not a training session but an avenue for sharing and learning and interacting.
The final day saw participants discussing International Exchange Organization Structures and deliberating on whether a government run Exchange was more desirable than a private sector driven one. The high point of the day came in the afternoon session when the seminar hall was converted to a trading floor with participants joining a live trading session and getting firsthand experience of the thrills of trading.
AgroNigeria was on hand to provide back end and secretariat services that saw to the smooth running of the entire event. It’s CEO, Mr. Richard-Mark Mbaram cut short an international engagement to be present at the event. “We are very aware of what this portends for the entire sector, but particularly for the small holder farmer, in terms of market efficiency and income enhancement. That is why we decided to power this event”, Mbaram stated.
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