African Exchange Holdings (AFEX), a pan-African holding company founded by Tony
| Tony Elumelu |
Holdings, and Jendayi Frazer, President of 50 Ventures, to establish commodity
exchanges across Africa, today signed a Memorandum of Understanding (MOU) with
Nigeria`s 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.
Dr Akinwumi Adesina, CON, Nigeria`s transformational Minister of Agriculture,
said, "Strengthening agricultural markets is critical to diversifying Nigeria's
economy. Our partnership with AFEX will help to improve the access of farmers to
markets, reduce post-harvest losses, stabilize prices and raise their incomes.
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."
Elumelu, the Chairman of AFEX Holdings, said, "We are pleased to be working with
the Nigerian government on this project to deliver transformative, sustainable
investment to the country`s agribusiness 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 Nigerian
economy. This builds on the experience and success of our subsidiary - East
Africa Exchange - in Rwanda which has become a critical player in agribusiness
development across the continent."
He continued: "My partners and I are greatly encouraged by the transformation of
Nigeria's agriculture sector as driven by Dr Adesina and we want to support the
federal government in its innovative approach."
Nicolas Berggruen, the founder and president of Berggruen Holdings, 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 marketplace."
Nigerian farmers may now use receipts for their produce as collateral for loans.
This will control price volatility due to the availability of buffer stock,
enabling farmers to sell produce at better price points. The two-year pilot
phase of the warehouse receipt system covers seven states, mostly in northern
Nigeria, where agriculture is by far the largest economic sector - Kano, Kaduna,
Katsina, Zamfara, Kwara, Gombe and Oyo - and will commence in October 2013.
The Federal Ministry of Agriculture will support the warehouse receipt system by
creating the enabling environment that is essential for its successful delivery,
and will also provide warehouse infrastructure.
Jendayi Frazer, the former US Assistant Secretary of State for Africa, who is
the Managing Partner at AFEX, stated, "The warehouse receipt system will help
improve food security across Nigeria. It will not only give farmers and
cooperatives better access to markets by linking their market produce to
high-value buyers, but will also deliver higher profits for stakeholders. AFEX
believes our electronic warehouse receipt system and improved warehousing
operations will be the stepping stone to establishing a vibrant commodities
exchange in Nigeria."
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