AFEX Commodities Exchange Limited has sealed a deal to provide “sufficient” financing to support Nigerian smallholder farmers’ access to fertilisers.
The company’s Corporate Communications Analyst, Adanna Atuonwu, disclosed this on Friday while announcing the signing of a Memorandum of Understanding between AFEX Fair Trade, the trading business unit of the company, and African Fertiliser and Agribusiness Partnership.
The commodities market player in Nigeria says it recognises the funding gap in the production of fertilisers by blenders, as well as hub-agro dealers’ inadequacies, due to high input cost, to purchase and distribute higher volumes of fertilisers to the end users.
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“By leveraging AFAP’s African Fertiliser Financing Scheme under the African Development Bank Programme, AFEX Fair Trade will deliver initiatives that ensure liquidity in the fertiliser value chain, which will strengthen the availability, quality, and value-cost ratio of fertilisers to farmers in the rural regions,” AFEX said.
The Managing Director, AFEX Fair Trade, Kamalden Raji, said, “We are excited to consolidate our partnership with AFAP to deepen fertiliser production and drive capital flow and growth opportunities to the agriculture 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 years, we have developed and introduced a wide array of securitised 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.”
On his part, the Country Manager for AFAP, Matthew Adetunji, said, “We believe our partnership with AFEX Fair Trade is key to ensuring liquidity between hub-agro dealers and blenders in the fertiliser 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 fertilisers by pushing more volumes to rural areas for farmers to access anytime at a cheaper rate.”
AFEX assured that with the financing models introduced by the companies, distribution would commence in the coming months.
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