AFRICAN Exchange Holdings (AFEX), a Pan-African holding company, has signed a Memorandum of Understanding (MOU) with the Federal Ministry of Agriculture, to create a pioneering warehouse receipt system that will enable Nigerian farmers and cooperatives to safely store their produce at accredited warehouses.
AFEX was founded by the Chairman of Heirs Holdings, Tony Elumelu, Chairman of Berggruen Holdings, Nicolas Berggruen and President of 50 Ventures, Jendayi Fraser, to establish commodity exchanges across Africa.
At a brief event Wednesday in Abuja, Minister of Agriculture, Dr. Akinwunmi Adesina, said that the initiative would help to improve farmers' access to markets, reduce post-harvest losses, estabilise prices and raise their incomes.
While seven of such warehouses are to be built in partnership with AFEX, Adesina said that the Federal Government will eventually build 800 warehouses across the country. Meanwhile the seven pilot warehouses are to be established in Kano, Kaduna, Katsina, Zamfara, Kwara, Gombe and Oyo and this will commence in October.
"Strengthening agricultural markets is critical to diversifying Nigeria's economy. We are rapidly modernizing agriculture in Nigeria and the development of warehouse receipt systems will underpin the successful establishment of thriving agricultural commodities exchanges in Nigeria", the minister said.
Chairman of AFEX Holdings, Tony Elumelu expressed pleasure to be working with the Nigerian government to deliver the transformative investment to the nation's agricultural sector. "This initiative is a step towards financially empowering more farmers and ensuring that agriculture is not only commercially viable but a strong positive contributor to the economy", he said.
He stated further that the Nigerian project will build on the experience and success achieved with the East Africa Exchange in Rwanda; a subsidiary of AFEX. "My partners and I are greatly encouraged by the transformation of Nigeria's agriculture sector and we want to support the federal government in its innovative approach', he said.
Founder and President of Berggruen Holdings, Nicolas Berggruen, said "agriculture in Africa is key to the prosperity of the continent. Specifically for Nigeria, we are investing in the infrastructure needed to ensure the flow of commodities from farms to the local, regional and global market place".
Beside improving storage and pricing of farm produce, which this initiative brings to farmers, they will also be able to use their receipts as collateral for loans. The initiative is also expected to control price volatility due to the availability of buffer stock, enabling farmers to sell produce at better price points.
This pilot programme is a two-year phase and government is expected to support it by creating enabling environment and providing infrastructure. The electronic warehouse receipt system is expected to be a stepping stone to establishing a vibrant commodities exchange in the country.
AFEX is a holding company co-founded by Heirs Holdings, Berggruen Holdings and 50 Ventures, in partynership with The tony Elumelu Foundation and the Berggruen Institute on Governance. It has an objective to develop a network of commodity exchanges across Africa and ensure higher incomes for farmers.