Consonance Investment Managers, a private equity firm that invests in early-stage and growing businesses across sub-Saharan Africa, has invested an undisclosed amount in AFEX Commodities Exchange (AFEX), a market leading commodity exchange in Nigeria.

“We are proud to support Ayodeji and the AFEX team in their mission to transform Nigeria’s agricultural sector. AFEX increases trust and transparency in local agricultural supply chains by connecting farmers to market. AFEX has established the infrastructure which will undergird Nigeria’s food security agenda and the Central Bank of Nigeria’s economic diversification program. It will also be vital in deepening capital markets in line with the mission of the Securities and Exchange Commission of Nigeria,” said Mobolaji Adeoye, Managing Partner at Consonance Investment Managers.

Since its founding in 2014, AFEX Commodities Exchange Limited (AFEX) has developed and deployed a viable commodities exchange model for the West African market. AFEX has built a strong supply chain infrastructure to support the securitization of agricultural products.

AFEX operates 45 warehouses in Nigeria’s key grain-producing areas and accounts for 100,000 MT of total national storage capacity. Since 2014, the exchange has reached 106,000 farmers and traded 126,400 MT of commodities with a total turnover of NGN14.1bn.

AFEX’s mission is to support Africa’s food security while promoting fair exchange of value among players in agricultural value chains. To achieve this goal, AFEX looks to drive financial inclusion for rural communities, develop technology for data collection and market access and introduce products that de-risk the sector and enable the deployment of capital.

The funds will be used to increase liquidity of the commodity markets, and strengthen operations and technology systems.

AFEX will ease the access of retail and institutional investors to the commodity markets in Nigeria by deploying its established infrastructure to securitize agricultural products, ensuring efficient and transparent clearing and settlement.

With more participation in the sector, more innovative products will be listed over time, translating to growth for Nigeria’s capital market and increased funds being directed towards the agricultural sector in the country.

This key part of AFEX’s operations requires the deployment of funds towards market sensitization, training and product development.

To support the growth and stability of its systems, AFEX will also continue to build out technology solutions that support traceability: covering activities all the way from the financial inclusion of producers, through the outreach operations, and AFEX’s warehouse receipt system, to a trading platform that fosters shared prosperity between producers, processors and investors.

“We are delighted to welcome Consonance Investment Managers as partners on this journey. The future requires AFEX to provide our infrastructure as a service to the market and unlock capital for the agriculture sector in Nigeria. We will grow our operations ten-fold over the next five years; we also aspire to increase funding to agriculture in Nigeria from about NGN 500bn ($1.5bn) to more than NGN 2tn ($7.5bn) by 2025,″ said Ayodeji Balogun, AFEX CEO.