Nigeria’s first private commodities exchange AFEX,licensed in 2014 by the Securities and Exchanges Commission (SEC) has said its goal is to make a direct impact on the livelihood of one million Nigerian farmers by the end of the year 2020.
In a statement to Leadership yesterday, it stated that it was licenced by the SEC to provide a structured market for the transparent trading of agricultural commodities between farmers, traders, exporters and processors in West Africa, starting in Nigeria
Leadership recalls that AFEX Nigeria took to the media to protest the forceful break-in to their warehouse in Zaria on 8th July, 2017, by officers of the Nigerian Police Force (NPF).
The Company had alleged that the NPF had seized 5,571 bags of dry maize (100kg each) valued at Eighty Five Million Naira (N85, 000,000.00), after which the Inspector General of Police (IGP), through the Head of Police Complaint Rapid Response Unit (PCRRU), ACP Abayomi Shogunle,had invited the company to the Nigerian Police Force Headquarters at Louis Edet House, Abuja, to hear the merits of their claim.
It noted that “Despite a clear mismatch between the defendant in a case the NPF is currently investigating in Katsina State, and AFEX Nigeria whose signage is clearly displayed at the Zaria warehouse, the NPF maintains that it did not know that the warehouse they seized maize from belongs to AFEX”
In response to allegations made by the NPF in some mediums published August 13th 2017, the company says it has now presented to the NPF all receipts and relevant evidence of transactions through which the stock in their Zaria warehouse was purchased.
The statement revealed that “Prior to the newspaper articles, the NPF had not invited the company directly for interrogation or to present proof of ownership of the stock seized from them.
“This goes against the principle of fair-hearing which the NPF, as enforcers of the law, ought to have applied before opting for the option of seizing grains worth N85million in a 7-hour operation that involved the handcuffing of the company’s security staff, damaging of doors, destruction of other bags of grains in the warehouse”the statement read
AFEX’s Warehouse Manager at Zaria,Mr. John Bandele, informed the NPF officers during the raid that the last stock he received was from a grain-for-fertilizer swap contract conducted with smallholder farmers in Kidandan; a town about 35km from Zaria.
Inspector Okolo responded to him that they (the officers) were not grain experts and that their only mandate was to seize 5,571 bags of maize. Period.
“The policemen made no mention of identification marks made on the bags by farmers in the case the NPF is investigating in Katsina. Laborers engaged by the NPF went ahead to load all bags of maize indiscriminately, starting from those closest to the door of the warehouse, and stopping at a point in the middle of the warehouse where the dispatch activity had achieved the 5,571 bags they set out to lift”
“AFEX confirms that throughout the dispatch operation, no party worked with the laborers to identify markings on bags – neither the NPF’s officers, nor the NPF’s suspects from Diversified Consulting Ltd, nor the AFEX staff. They all stayed outside the warehouse counting bags as they were loaded on trucks.
The statement further revealed that “Commodity exchanges’ warehouses are actually grain banks,noting that as the Nigerian market deepens in its understanding of the operations of a commodities exchange, AFEX Nigeria believes that its warehouses will be treated the sanctity deserving of banks.
In an interview on CBNC Africa, AFEX Commodities Exchange Country Manager, Ayodeji Balogun said while the case remains in court, the company is confident that justice will be served.
Meanwhile the statement revealed that “Under the supervision of SEC, AFEX Nigeria is currently working with key players in the Nigerian capital market to create products that rely on commodities as the underlying asset for public investment.
It added that “At the Capital Market Committee meeting which held on Tuesday the 15th of August, 2017 at Federal Palace Hotel, Lagos, AFEX Nigeria announced the launch of its electronic trading platform, NASDAQ OMX Trading System, which will support offsite trades between agriculture and financial market players. This will go a long way to deepen the Nigerian financial market, and unlock the much needed liquidity in the country’s agriculture sector.
The statement further revealed that “Since the company commenced operations in 2014, it has grown from 5 warehouses in 3 states in Northern Nigeria, to 45 warehouses in 13 states across the country where world-class processes are applied in the grading, receiving and management of grains.
In its effort to building a strong trust ecosystem between players in the market, the company runs a system, much like the system deployed in the banking sector for receiving and managing cash. Both buying and selling parties rely on the exchanges transparency as a counterparty in their trades.
Individual smallholder farmers can now contribute their small grain volumes, as low as one hundred kilogramme (100kg) bags, which are aggregated to directly fulfil supply contracts in thousands of metric tonnes (‘000mt) listed on the exchange by mills and investors.