Abuja: A Nigerian start-up is developing the first agricultural commodities exchange in Africa’s most populous country to take advantage of government’s efforts to boost farming output to reduce reliance on oil.
The exchange, Integrated Produce City Ltd, will be located near the southern city of Benin, about 300km east of Lagos, Nigeria’s commercial hub, a site accessible to nearby cocoa, palm oil, rubber and cassava growers, chief executive officer Pat Utomi said in an interview.
“The concept of a wholesale-produce market is to enable the farmer to fully dispose of his produce, instead of today where he loses 80 per cent of his output” that rots before it can reach the market, Utomi said on August 18 in the capital, Abuja.
Nigeria is boosting investment in agriculture to increase exports and cut food imports that cost it $3.2 billion (Dh11.75 billion) in 2015, according to the National Bureau of Statistics. The economy of Africa’s biggest oil producer has been hit hard by lower output and prices of crude, which accounts for more than 90 per cent of foreign income and two-thirds of government revenue.
Integrated Produce City will have storage facilities, including refrigerated warehouses, and host processing plants on its 100-hectare (247-acre) site in Edo state’s Ugbokun village when it takes off by the end of 2018, Utomi said. “It will be an export hub for produce,” where exporters will have access to large quantities stored in one place rather than sending agents to individual farmers to collect small amounts, he said.
The company has put up 20 per cent of the required $135 million and is in talks with lenders and investors from South Africa, China and Australia for additional capital, Utomi said, declining to name them.
Chocolate factories
Cocoa, palm produce, cashew nuts and rubber are among the products to be traded on the exchange. Others are fresh fruits and vegetables, grains and tubers such as cassava and yams. Local manufacturing companies will be able to buy agricultural goods at the exchange, he said.
“Among the factories we’re trying to attract are chocolate makers,” he said. “The entire cocoa value-chain will be represented.”
Nigeria is Africa’s fourth-largest cocoa producer and the seventh worldwide with a 2015-2016 output of 190,000 metric tons, according to the International Cocoa Organization.
In addition to cocoa, other major exported products were sesame seed, frozen shrimps, soy beans, cashew nuts and crude palm kernel, during the last quarter of 2016, figures from the statistics agency showed.
