Kamaldeen Raji, Managing Director at AFEX Fair Trade, outlines how the company is working towards a future of inclusivity and efficiency by building a trust economy for commodities in Africa.


Maja Sanusi, 33, manages a farm in Kaduna, Nigeria. At the crux of her farming ambitions is the growing demand for food in African countries. This demand should guarantee Maja fair returns for her production activities, but a lack of access to credit, information and support limits her productivity. She aggregates her harvest of paddy rice in large quantities with other members of her farming cooperative and attempts to access a fair market for the commodity.

Yet, even at this stage, a number of issues hinder Maja and other members of her co-operative, including information asymmetry on prices, poor logistics infrastructure and eventual losses in value where their commodities are unable to meet quality standards for trade.

Trade is critical to growth in Africa. It has enormous potential to create a resilient and inclusive economy that can lift millions of Africans out of poverty while securing vital food needs and boosting productivity. However, Africa’s trade potential is undermined by various well-documented barriers, including a lack of financing and infrastructure.

The landscape of intra-African trade especially is characterised as being increasingly fragmented, competitive and informal, with significant standardisation, price misalignment and counterparty risks. For producers like Maja, these conditions prevent them from taking full advantage of the opportunities created by trade and hinder them from scaling production levels on their farms.

It is estimated that 30% to 40% of Africa’s regional trade is informal and that four times as many cross-border traders are likely to be operating outside the formal economy than within it.

Research from the United Nations Conference on Trade and Development shows that total trade between African countries was just 2% during 2015-17, compared to 67% for intra-regional trade among European countries, 61% for Asia, and 47% for the Americas.

Intra-African agricultural trade as a percentage of total African agricultural trade consistently remains below 20%, one of the lowest for any region.

To boost trade among African countries, policymakers such as those involved in the African Continental Free Trade Area and the Economic Community of West African States are accelerating efforts to achieve economic integration. Additionally, African countries need to undertake bold domestic reforms in simplifying the information gap, cross-border transactions and infrastructural development to unlock cheaper, transparent and more inclusive ways to trade better with each other.


Introducing AFEX Fair Trade

As the foremost commodities market player in Nigeria, and one which has developed a commodities exchange model that works for Africa, AFEX is working to restructure the way that trade is done in, and with, the continent.

A key part of the solutions that have been executed by AFEX in this regard involves the deployment of ancillary infrastructure to support trade on the continent. To date, in Nigeria, AFEX has a total storage capacity of over 350,000 metric tonnes, the largest of any private sector player in the country, with 120 warehouses spread across 24 states.

Following AFEX’s entry into Kenya in Q2 2022, the company has now set up eight new warehouses in one county.

Storage is a key component of a bundle of services that AFEX provides to farmers. AFEX offers affordable and secure storage to farmers through the provision of warehouses near farming clusters. Farmers can deposit their commodities at AFEX warehouses, making payments per bag, per month. The commodities are weighed and graded, and the depositor issued a warehouse receipt stating the quality and quantity of the commodities deposited.

Warehouse operations are managed through WorkBench, AFEX’s value chain management platform, which includes the ability to profile farmers, document transactions and clear and settle physical trade, among other features.

With transaction-level data collected through WorkBench alongside price data collected from over 300 markets across Nigeria, AFEX is building a data bank for agriculture trade on the continent – starting with Nigeria. This will contribute greatly to solving the information asymmetry that persists in the sector and limits investments, measured interventions and overall growth.

Additionally, AFEX facilitates an efficient marketplace for commodities in Africa that crowds in both buyers and sellers who utilise AFEX’s physical and technology infrastructure to interact and exchange value. ComX, AFEX’s trading platform, also provides the ability to trade securitised agricultural assets. Commodities are securitised and made available for retail and institutional investors to trade and gain exposure to alternative assets and investments. By trading on ComX, investors can make a decent per, or above, market return while financing value chain activities necessary to bolster trade.

Through its activities, AFEX is enabling a transparent and fair market system that helps to determine the value of commodities, unlock investments and facilitate efficient trade. For commodities in Africa, the company will turn the page on a heavily physical, untraceable and informal marketplace to one that digitises the sector, making activities more transparent, traceable, and formal, benefitting both producers like Maja and buyers within and outside the continent.