Gwamcee News
More than 14 commodity exchanges across Africa have agreed to harness their collective potential under the African Continental Free Trade Area (AfCFTA), a move that promises to facilitate the efficient trading of agricultural and non-agricultural commodities, enhancing food security and market efficiency through shared knowledge and best practices.
This collaborative effort underscores the importance of efficient and effective export promotion and commodity exchange platforms for economic growth, as well as for the equitable, inclusive, and sustainable development of Kogi State. The proposed establishment of the Kogi State Commodity Exchange and Export Promotion Agency will pioneer integrated commodity market systems in North Central Nigeria. Under the leadership of Governor Alhaji Usman Ahmed Ododo, this initiative aims to leverage Nigeria’s vast human, agricultural, and mineral resources to drive development, positioning Kogi State as a pivotal hub for agricultural value chain development and a prime destination for trade and investment.
To ensure the sustainability of this venture, it is crucial to address the pressures from new environmental regulations and stakeholder demands regarding integration impact and climate change actions. Industry players are committing to meet neutral targets and establish necessary supply value chains. Meanwhile, the Kogi State Government is prioritizing sustainability in its efforts to secure food security and finance investment decisions, responding to demands from the wider economy, private investors, stakeholders, and agrifood processors.
There is a consensus that environmental, social, and governance (ESG) aspects need to be addressed coherently across the commodity exchange and export promotion platform. The impacts and issues are interdependent, and a narrow focus in one area could have adverse effects in another.
Unlocking capital for small and medium-sized enterprises (SMEs) is essential for the commodity exchange ecosystem. Finance needs to be accessible to all layers of the value chain, not just the larger players. Access to finance will determine the speed at which physical supply chains in the commodity market can transform, particularly if new technologies are required. The Kogi State Commodity Exchange and Export Promotion Agency represents a fundamental shift in how farm produce and processed foods are manufactured, consumed, and traded, aiming for sustainability and continuity in the ecosystem.
Technology adoption and application play a significant role in the commodity exchange ecosystem, and innovation must be supported by finance. Many existing technologies cannot currently be commercialized or scaled in the agribusiness value chain, and investment is needed to make these technologies scalable. Additionally, digitalization can drive transparency and measurement, ultimately aiding SMEs in accessing finance.
There is also a critical need for data and greater transparency. Commodity providers must offer information and assurances about their growth plans and credentials when required, whether by off-takers, end-users, financial institutions, or regulators. This transparency is necessary not only to meet economic growth targets but also to ensure the long-term sustainability of the supply chain.
Agricultural commodity producers and traders have voiced their commitment to supporting the Kogi State Government in establishing an eco-friendly Commodity Exchange and Export Promotion platform to boost agribusiness and food processing growth. This initiative marks a significant step towards a more integrated and sustainable commodity market system in Nigeria, promising widespread economic benefits and enhanced food security for the region.
