AFEX Launches Pricing Methodology to Formalise Nigeria’s Agricultural Commodity Markets

Gilbert Ekugbe

One of Nigeria’s leading commodities player, AFEX, has launched its updated pricing methodology for its commodities exchange business in the country.

The President and Chief Executive Officer, AFEX Nigeria, Mr. Akinyinka Akintunde, on the sidelines of its CEO breakfast meeting tagged, “The Convergence of Commodities and Capital Markets: Unlocking Liquidity for a $1trillion market,” in Lagos, said the move was to regulate the highly informal agricultural markets in its bid to attract more players into the agricultural sector. 

“The market is highly informal, which is why most of the data and information you see on those ecosystems does not translate to relatable numbers for a lot of players in the industry. One of the things we do at AFEX is to put a formal structure around it by developing the appropriate infrastructure and crowding in the key players to drive it. Globally, agriculture is no longer a poor man’s business but has potentials to create wealth for the nation’s economy,” he said.

He stressed that the implementation of the price methodology fills a gap in formalising participation in the Nigerian commodities ecosystem, as the firm doubles down on investor education and protection, while enhancing price discovery and eliminating price gaps across the different boards on the exchange.

He noted that the AFEXCommodities Exchange pricing methodology is a framework used by the exchange to transparently communicate the prices of the commodities that are available for trade.

“Previously, the pricing methodology aggregated prices across all markets and represented them differently across each of the Exchange’s boards. However, the new methodology will unify these prices from different markets and boards to generate a homogenized price per commodity,” he stressed.

He also relayed relevant updates on the exchange, stating that it has launched initiatives to strengthen data availability and accessibility for the commodities market in the country over its years of operation.