AFEX Unveils N100bn Asset-backed Commercial Paper to Bridge Agric Financing Gap

Gilbert Ekugbe

Nigeria’s leading commodities player AFEX, has launched a 3-year N100 billion Asset-Backed Commercial Paper (ABCP) programme to bridge the huge agric finance gap in the country.

Indeed, Nigeria require an annual financing of over N5 trillion to address the existing finance gap in the nation’s agricultural ecosystem.

Speaking at the bell ringing ceremony and the launch of the N100 billion ABCP, the Managing Director, AFEX Investment Limited, Samirah Ade-Adebiyi, said the launch was designed to unlock capital from players that are also looking to diversify their investments into processing of agro commodities.

“The strategic drive of the programme is to get to the point where all agricultural projects both on the governmental level or private level get access to finance on a structured platform which is what the AFEX platform is all about,” she said.

According to her, the ABCP which serves as a debt financing instrument, allows the issuer to provide short-term working capital for agri-service companies, stressing that the vital infusion of funds empowers companies to meet their immediate business needs, ensuring they can effectively manage short-term obligations, thereby enhancing productivity and overall output.

She added that the AFEX Investment Limited SPV ABCP, valued at $130 million (N100 billion), was the first commodity backed ABCP announced in Nigeria and was initially launched in 2021 as a three-year commercial paper programme, with the previous two series successfully raising N51 billion. 

She pointed out that the listing of the ABCP presents an opportunity to diversify the investor pool to retail and institutional investors, facilitate efficient price methodology and transparency for accurate portfolio valuation and most importantly, contribute to securing funding to stabilize Nigeria’s agriculture sector and close the funding gap which currently sits at $183 billion.

 “Through the ABCP we are prioritising impact focused investments, as this allows agri-businesses to unlock essential capital for their working capital needs, contributing to the growth of the sector. 

This is also historic moment for us, because the ABCP happens to be the first-ever commodities backed ABCP listed on a commodities exchange in Nigeria,” she expressed.

Under this listing, AFEX Investment Limited SPV serve as the issuers of the paper, with FSDH, Marble Capital and AVA Capital Partners appointed as joint dealers and arrangers of the notes. 

Also present at the bell ringing ceremony, the Managing Director, AVA Asset Management, Efe Shaire, expressed enthusiasm for the prospects of the ABCP for the industry.