An emerging Nigerian company, Integrated Produce City Ltd., is developing the first agricultural commodities exchange in Nigeria, in response to government’s efforts to diversify the economy, boost farming output and reduce reliance on oil.
This was disclosed in Abuja by the Chief Executive of the Exchange, Prof. Pat Utomi.
Bloomberg reports that The exchange, will be located near the southern city of Benin, about 300 kilometers (186 miles) east of Lagos, Nigeria’s commercial hub, a site accessible to nearby growers of cocoa, palm oil, rubber and cassava.
“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 percent of his output” that rots before it can reach the market, Pat Utomi.
A report recently released by the National Bureau of Statistics (NBS) stated that the current administration in Nigeria is boosting investment in agriculture with a target to increase exports and cut food imports that gulped about $3.2 billion in 2015.
However, since the fall in the prize of oil in the international market, the economy of one of Africa’s biggest oil producers has been hit hard, as oil 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.
He 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.”
“The company has put up 20 per cent of the required $135m and is in talks with lenders and investors from South Africa, China and Australia for additional capital”, Utomi said, but declined to name them.
“Integrated Produce City signed an agreement with KPMG LLP’s Nigerian unit to help it raise more capital”, Vitus Akudinobi, a spokesman for the new exchange, said.
Cocoa, palm produce, cashew nuts and rubber are among the products to be traded on the exchange. Others are fresh fruit 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. The entire cocoa value-chain will be represented,” he said.
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 during the last quarter of 2016 were sesame seed, frozen shrimps, soy beans, cashew nuts and crude palm kernel, figures from the statistics agency showed.