By Peter Nosakhare, Kaduna
Nigeria’s leading commodities market player and the country’s first private sector commodities exchange, AFEX has announced the reopening of its $240 million (N100 billion) Asset-Backed Commercial Paper (ABCP) to help stabilise Nigeria’s agriculture sector by offering Agro-processors low-cost financing to bridge the funding gap between lenders and borrowers.
AFEX’s second in a three-year Commercial Paper program that started in Q4 2021, where $65 million (N27 billion) was raised, seeks to raise an additional $175 million (N73 billion) for processors unable to borrow in the commercial paper markets.
AFEX’s security is backed by the commodities serving as the credit enhancement in the transaction. AFEX lists the ABCP on ComX, its commodities trading platform, then engages capital market operators for subscriptions for a set time. Funds raised are used to provide pre-qualified Agro-processors with working capital to purchase commodities required for their production processes at an agreed price.
Since its launch in 2014, AFEX has committed to levelling-up Africa’s agro-tech sector; by helping the continent feed itself by boosting food security and making food production more efficient.
