Africa’s leading commodity player, EXTit has started Africa Exchange, a digital platform for trading commodities. The platform follows AFEX’s first foray into digital commodity trading with the launch of ComX in 2020.
This new trading platform further transforms the commodity space in Africa by enabling commodity market players to meet and interact in both physical and financial markets. Data and information vital to decision-making are readily available on the platform, offering a comprehensive and informed trading experience.
Details
Africa Exchange provides a structured market that is duly regulated by the Securities and Exchange Commission of Nigeria (SEC), ensuring that users can participate in various trading or investment opportunities. Africa Exchange will replace ComX, which it has served over 80,000 investors in Nigeria and facilitated value transactions over USD 200 million since it was released in 2020.
With Africa Exchange, we are opening up the African commodity ecosystem to more investors and players. Through the platform, users can directly trade physical commodities or invest in commodity-backed financial instruments.
Akinyinka Akintunde, CEO and Chairman of AFEX Nigeria;
The move further strengthens AFEX’s mission to facilitate wealth creation for a new generation of Africans by providing them with alternative investment options to enrich their existing portfolios. In addition, AFEX aims to enhance intra-African trade by enhancing intra-Africa trade and supporting the mission of the African Continental Free Trade Agreement (AFCFTA) to improve regional trade integration to enhance economic growth and food security across the continent .
By The Numbers
For now, only 14.4% of Africa’s exports come from trade between African countries. However, the AfCFTA could increase intra-African trade by about 33% and reduce the trade of the continent 51% deficit, according to the United Nations Conference on Trade and Development (UNCTAD). According to the Sustainable Development Goals of the United Nations (SDGs) 1, 2, 5, 8 and 12, The launch of the Africa Exchange is an important milestone in the achievement of the AfCFTA. The platform promotes fair market prices that help farmers earn more and increase food production. It also allows investors to diversify their portfolios while supporting the financing of the food ecosystem.
What they say
Commenting on the launch, Akinyinka Akintunde, CEO and Chairman of AFEX Nigeria;he said: “As a team, we are excited and proud to launch Africa Exchange as another step in building the digital infrastructure to facilitate trade across Africa. With this launch, we aim to strengthen the commodity market in Africa and enable more investors to participate with all the information they need at their fingertips.”.
He continues, “Commodities have been high performing assets in recent years. in In 2021, commodities were the third highest performing asset class, averaging about 37.1% in returns, while stocks averaged about 36.9%. The commodity market has grown sophisticated over the years, with similar commodity brokers and other institutional players making their mark and creating trading opportunities. With Africa Exchange, we are opening up the African commodity ecosystem to more investors and players. Through the platform, users can directly trade physical commodities or invest in commodity-backed financial instruments.”
Alongside the launch of the platform, AFEX is also bringing back its innovative Fair Trade ETC (FETC) product. A FETC is a bundle of commodities in a contract designed to provide investors with market exposure in a way that maximizes the risk-reward balance of the underlying commodities. The instrument has a maturity period of 270 days and historically significant yields, with the two installments in 2022 yielding 31% and 20%, respectively. FETC is set to open on the Africa Exchange platform on December 1 at a unit price of just N1000 and for the first time in the history of the product, it will be tradable within the validity period, after a 120-day wait.
Funto Olasemo, Vice President Financial Markets at AFEX, said: ‘Over the past 8 months, we have focused on improving our core infrastructure and providing a better digital interface for commodity trading and investment on the continent. We have also continued to pursue product innovation and the new installment of our FETC product is a great example of this.”
“FETC has been a hugely successful product since we introduced it in 2020 and we have built a tradable element into this tranche, giving investors even more freedom as they build wealth. The team is excited to facilitate wealth creation for a new generation of Africans by providing them with alternative investment options to enrich their portfolios.“
AFEX is committed to improving intra-African trade. To achieve this goal, the company has been pursuing its strategic pan-African expansion plan since expanding to Kenya and Uganda in 2021 and 2022. AFEX is set to expand to six other African countries within the next few years with the aim of promoting efficient trade in goods across the continent, while supporting the AFCFTA’s objectives of enhancing regional trade integration.
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