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In a signing ceremony held at the AFEX office in Abuja on Friday, March 26th, 2021, AFEX Fair Trade, the trading business unit of Nigeria’s leading commodities market player, AFEX, signed a Memorandum of Understanding (MoU) with African Fertilizer and Agribusiness Partnership(AFAP) to collaborate on sufficient financing of hub-agro dealers aimed at facilitating and supporting Nigerian smallholder farmers’ access to fertilizers in the market.
The collaboration recognizes the funding gap in the production of fertilizers by blenders and the hub-agro dealers’ inadequacies to purchase due to high input cost and distribute higher volumes of fertilizers to the end-users. By leveraging on AFAP’s African Fertilizer Financing Scheme under the African Development Bank Program, AFEX Fair Trade will deliver initiatives that ensure liquidity in the fertilizer value chain which will strengthen the availability, quality, and value-cost ratio of fertilizers to farmers in the rural regions.
“ We are excited to consolidate our partnership with AFAP to deepen fertilizer production and drive capital flow and growth opportunities to the agricultural sector. This MoU resonates strongly with AFEX Fair Trade’s mandate to provide support in trading, financing, and market system development for Africa’s commodities market. Over the past years, we have developed and introduced a wide array of securitized financial instruments to help lower the cost of financing in the sector and increase access to inputs and market for market players such as the Asset-Backed Commercial Paper, Input Notes, Exchange Trade Commodities, and many others.” Kamalden Raji, Managing Director, AFEX Fair Trade.
Commenting on the partnership, Matthew Adetunji, Country Manager for AFAP said “We believe our partnership with AFEX Fair Trade is key to ensuring liquidity between hub-agro dealers and blenders in the Fertilizer market. While we provide a guarantee for dealers, getting support from a structured trading platform like AFEX completes the transaction process more efficiently and seamlessly. We are on a mission to solve the scarcity of fertilizers by pushing more volumes to rural areas for farmers to access anytime at a cheaper rate.”
With the financing models introduced by the leading companies, distribution is set to commence in the coming months, just in time for the planting season to increase productivity and revenue generation. Africa needs fair trade to enable an exchange of value among players that breeds a virtuous cycle of efficient and prosperous producers and improves food security, and this partnership will deploy solutions to achieve this vital objective.
Editors Note: About AFEX
At AFEX, we harness Africa’s commodities and talent to build shared wealth and prosperity. Our infrastructure and platform investments work to unlock capital to power a trust economy in Africa’s commodities markets. Since its inception in 2014, we have developed and deployed a viable
commodities exchange model for the West African market, and are on track to impact one million producers; providing services in productivity and value capture and access to finance and markets. By deploying an efficient market system, we will facilitate trade with Africa worth over USD500 million in the next five years.
AFEX’s vision is to be the reference point for commodities in Africa. To achieve this goal, AFEX looks to introduce products that de-risk the sector, drive financial inclusion for rural communities, develop
technology for data collection and market access, and enable capital deployment
