AFEX launches innovative FETC product on new digital trading platform

Joy Agwunobi

AFEX, a leading commodities player in Africa, has announced the launch of a new digital trading platform called Africa Exchange. This follows the launch of ComX in 2020, which was AFEX’s first venture into digital commodities trading.

Africa Exchange is a revolutionary platform that enables commodities market participants to connect and transact in both the physical and financial markets. It provides essential data and information to help users make informed decisions, delivering a seamless and comprehensive trading experience.

With the launch of Africa Exchange, which is regulated by the Nigerian Securities and Exchange Commission (SEC), AFEX is providing a regulated and secure marketplace for users to engage in various trade and investment opportunities. Africa Exchange will replace ComX, which has served over 80,000 investors in Nigeria and facilitated over $200 million worth of trades since its launch in 2020.

In addition to creating new opportunities for wealth creation, the launch of Africa Exchange is also aligned with AFEX’s commitment to the African Continental Free Trade Agreement (AFCFTA) mission to boost intra-African trade and improve regional trade integration to foster economic development and food security across the continent. By facilitating connections and trade between commodities market participants, AFEX is helping to promote greater economic growth and prosperity for Africa.

Intra-African trade currently accounts for only 14.4 per cent of Africa’s total exports, but according to the United Nations Conference on Trade and Development (UNCTAD), the AFCFTA could increase this figure to up to 33 per cent. In addition, UNCTAD estimates that the AFCFTA could reduce Africa’s trade deficit by 51 per cent. As a partner in the SDG process, AFEX’s Africa Exchange aims to support this growth by providing farmers with fair market prices, increasing food production, and diversifying investors’ portfolios while also supporting the financing of the food ecosystem.

Akinyinka Akintunde, CEO of AFEX Nigeria, said that the team at AFEX is proud and excited to launch Africa Exchange as a key step towards building the digital infrastructure needed to facilitate trade across Africa. He stated that the platform aims to boost the commodities market in Africa and allow more investors to participate with all the information they need at their fingertips.

“Commodities have outperformed other asset classes in recent years, with average returns of 37.1% in 2021, compared to 36.9% for stocks. The commodities market has become increasingly sophisticated, with the emergence of commodity brokers and other institutional players creating opportunities for more sophisticated trading. The launch of Africa Exchange by AFEX will further open up the African commodities ecosystem, allowing users to directly trade physical commodities or invest in commodity-backed financial instruments,” he stated.

In addition to the launch of Africa Exchange, AFEX also announced the relaunch of its innovative Fair Trade ETC (FETC) product, which is now available on the platform. The FETC is a unique commodity bundle that provides investors with exposure to a diversified basket of agricultural commodities, with a maturity period of 270 days.

Funto Olasemo, vice president of Financial Markets at AFEX, stated that the company has been focusing on improving its core infrastructure and delivering a better digital interface for commodities trading and investment in Africa over the last eight months.

“The FETC has been a hugely successful product since we introduced it in 2020, and we have structured a tradeable component into this tranche, giving investors even more freedom as they build wealth. The team is excited that we are facilitating wealth creation for a new generation of Africans by providing them with alternative investment options to enrich their portfolios,” Olasemo stated.