November 4, 2020

Investors’ Week: SEC expresses support for AFEX commodities market

Investors’ Week: SEC expresses support for AFEX commodities market

As CEO rings bell for financial literacy

By Gabriel Ewepu – Abuja

As Investors’ Week commences, the Securities and Exchange Commission, SEC, Tuesday, expressed support for AFEX Commodities Market towards boosting food security, availability, investment, wealth creation, and employment generation in the commodities value chain in the agricultural sector.

This was stated by the Executive Commissioner, Operations, SEC, Dayo Obisan, represented by HOD, Registration, Exchanges, Market, Infrastructure, FINTEC, and Innovations Department, Emomotimi Agama, at a press conference held at the APEX Head Office in Abuja.

According to Agama, opportunities that exist in commodities exchange are huge because of the population Nigeria has, and many people in the country are yearning for opportunities to invest and create wealth.

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AFEX Commodities Exchange Limited (AFEX), Nigeria’s first private sector commodities exchange firm joined the Securities and Exchange Commission, SEC, to Ring the Bell for Financial Literacy.

Financially literate market participants are better enabled to take advantage of new opportunities in the capital market and drive up the level of activities and diversity in the market.

As a commodities exchange, AFEX has worked on furnishing the need for information about the commodities market and the commodities trading landscape in Nigeria, allowing for greater participation by an increasing number of retail and institutional investors in the market.

The Exchange has designed and executed a robust education campaign that includes both online trainings and digitally distributed learning materials, enabling AFEX to reach various audience groups and satisfy their unique education needs.

Financial literacy on the intricacies of how commodities market work is one of the key ingredients to de-risking the sector, building trust, and growing markets for a sustainable food system. The holistic approach AFEX and SEC are taking to ensure a viable commodities ecosystem will not only help to understand the advantages of commodities as an alternative investment option but also grow people’s trust in the system and between key players in the value chain.

He said: “The essence of the Investors’ Week is to provide context that is education to people of this country that there is value and future in commodities as such AFEX with the other commodities exchanges as seen it wise to introduce the products and commodities to the wider population in order for people to appreciate and understand when you are looking at other alternative classes look not far the next place to look for is AFEX Commodities Market and which we know as SEC, we are in full support and making sure that we feed an hungry nation.

“The opportunities that exist in commodities exchange is huge and the population we have in this country are yearning for such opportunities; think about commodities you think about opportunities, and the population think about commodities, think about alternative asset investment you think about commodities.”

He also explained that, “We aim to facilitate the dissemination of information about Nigeria’s capital market that provides investors with the critical knowledge required to make better decisions about investing in the market. We are happy that together with key stakeholders like AFEX we can facilitate this movement of financial literacy.”

However, he (Agama) called on young Nigerians to take advantage of the commodities space by going back to the farm.

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According to him as Nigerians grow the commodities space, they grow the nation, Gross Domestic Product, GDP, opportunities, employment, and there is no aspect of national life that commodities do not affect.

He also added that with an establishment like APEX the Commission is trying to create a level playing  field for operators and indeed even for investors, “and for the farmers, more importantly, providing price discovery, transparency and quality of those commodities it is so important for the growth of this market, and indeed the economy that is why we are associated with AFEX, commodities market, everything that is good and coming out of this place.”

Meanwhile, the Chief Executive Officer, APEX, Ayodeji Balogun, while answering questions disclosed that it has 310, 000 registered farmers as their cooperatives are registered with the Exchange, and they have access to the transaction through their cooperative structures.

According to him, commodities on the Exchange include paddy rice, soya bean, cocoa, sorghum, maize, and ginger.

“Our vision is to grow our education campaigns into an open-source library of content for commodity exchanges in Africa.

“The content will span across membership procedure, market access, trading strategies, and community engagement, and will be accessible to investors at the click of a button.

“We are glad about and align so strongly with the Securities and Exchange Commission’s focus on investor protection and education, and ring the bell for financial literacy.

“So for us at AFEX is important that that we build an inclusive market and inclusiveness for starts with the farmers and we strongly believe that the stories of commodities cannot be told without the story of farmer not being prevalent and impact, what impacts to him and livelihood does he gain from this entire process.

“Today we have 310, 000 registered farmers as their cooperatives registered with the Exchange, and they have access to the transaction through their cooperative structures.

“We operate in 600 communities across the country and with the most recent counts we have 60 warehouses across 15 States that then get across their community.

“Those warehouses are connected through the use of technology so easily farmers in each village can go to the closest warehouse and can transact with a miller in Lagos or in Calabar, and that is how the efficiency we bring in allows them to get the best price possible are being able to securitise trade, earn better income and also access loans through financial product service we create for them.

“As member of AFEX, as a farmer or a producer we ensure you get the right financing, you can double or triple your yields a year or two and we have also seen some of them double their farmlands in three to four years if you can increase your income”, he said.

AFEX Commodities Exchange Limited (AFEX) enables the transition from production to transaction for agricultural commodities. Since its founding in 2014, AFEX has developed and deployed a viable commodities exchange model for the West African market.

The Exchange has reached over 106,000 farmers and traded over 135,000 metric tonnes of commodities with a total turnover of USD41.5 milliion (NGN14.9 billion).

The Exchange’s mission is to support Nigeria’s food security while promoting a fair exchange of value among players in agricultural value chains.

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 the deployment of capital.