Nigeria’s first warehouse receipt system coming..

The Federal Government has entered into an agreement with African Exchange (AFEX) Holdings to create Nigeria’s pioneering warehouse receipt system.
The system will enable Nigerian farmers and cooperatives to store their produce at accredited warehouses while the produce in the warehouses can be used as collateral to get loans.
Speaking at the signing of a Memorandum of Understanding (MoU) in Abuja yesterday at the on-going 19th Nigerian Economic Summit Group meeting, the Minister of Agriculture who represented the federal government  Dr. Akinwunmi Adesina disclosed that the federal government will  establish 800 warehouses across the country, that is at least one warehouse in every Local Government Area in Nigeria.
In addition, Adesina said the Federal Government will create an Agriculture Information System to help gather data for farmer and also recruit  those that will manage the warehouses.
The Agriculture Minister further disclosed that Bloomberg has agreed to invest $250 million in warehouse facilities in Nigeria as a fallout of the agreement with the African Exchange Holdings.
When operational, the warehouses will be leased by the government to private investors “so that farmers can make money”, the minister said.
To fast-track the take-off of the warehouse system, seven pilot warehouses have been established “to ensure grains standards, guarantee collateral for farmers and secure how farmers get their produce to the market.”
The system will commence operation in October for two years in seven states  ”where agriculture is by far the largest economic sector”. They are Kano, Kaduna, Katsina, Zamfara, Kwara, Gombe and Oyo states.
According to the minister, “strengthening agricultural markets is critical to diversifying Nigeria’s economy. AFEX will help to improve the access of farmers to markets, reduce post harvest losses, stabilise prices  and raise their incomes”.
Chairman of AFEX Holdings , Tony Elumelu, said the warehouse receipt system initiative “is a step towards financially empowering more farmers  and ensuring that agriculture is not only commercially viable, but a strong positive contributor to the Nigerian economy.”
Elumelu also said AFEX wants to roll out in many across Africa and Nigeria is the next port of call after Rwanda host of the East Africa Exchange which has become “a critical player in agribusiness development across the continent.”
Mr Nicolas Berggruen, Chairman of Berggruen Holdings said with the establishment of a warehouse receipt system in Nigeria, farmers  in the country “may now use receipts for their produce as collateral for loans. This will control price volatility due to the availability of buffer stock and enable farmers to sell produce at better price points.”