AFEX Commodities Exchange, Nigeria's first private agricultural commodities bourse, is going to open its offices in seven new African countries seeking to take advantage of growing intra-African trade, media has reported, citing the company's executive.
The Nigerian commodities bourse will expand its operations to Ivory Coast this year and Ghana in 2024, before moving to Benin, Togo, Tanzania, Ethiopia and Zambia, the exchange's CEO Ayodeji Balogun told media.
Balogun also revealed that the company is set to raise 30 billion naira ($65 million) of debt this year to finance its expansion plan, which includes increasing the storage capacity of its warehouses to 1 million tons by 2025, securing more commodity trading licenses, as well as adding gold and derivatives to its trading portfolio.
He further elaborated that the elimination of various trade barriers under the African Continental Free Trade Area (AfCFTA) will "unlock significant value" in the bourse's spot contracts, exchange-traded contracts, fixed income products and derivative products. He noted that daily transactions on the commodities exchange currently total approximately 2 billion naira (about $4.3 million).
"With our expansion into African countries, we see a path to improve intra-Africa trade," he said, adding: "This leads to increased productivity on a national level, allowing countries to be more food secure."
The African Continental Free Trade Area, officially launched in 2021, looks to create a single continental market with a population of about 1.4 billion and a combined GDP of about $3.4 trillion. The AfCFTA is by far the world’s largest free trade area, bringing together the 55 countries of the African Union (AU) and 8 Regional Economic Communities. According to the IMF, if successfully implemented, it will enable the continent to accelerate economic growth and enhance living standards of its citizens.