A frontline player in the agricultural value chain in Nigeria, Agvest Limited has been screened by the Lagos Commodities and Futures Exchange (LCFE) for listing of its N5 billion cashew nut contracts by diversified financial instruments.
Under the proposed listing, financial instruments worth N1.5 billion with Cashew Nut as the underlined assets are scheduled to be offered to investing public through Commercial Papers (CP) and short term Exchange Traded Notes (ETN).
Addressing journalists in Lagos, Agvest’s Managing Director, Olabode Abikoye, explained that proceeds of the offer would enable Agvest get both plantation and factory up and running in West Africa at the first instance while adding that Agvest will commence with cashew aggregation on the spot market and issue ETNs in the medium term and add value to the agricultural chain.
Abikoye noted that the decision to list cashew nut contracts on the LCFE is to enable private investors enjoy the benefits of quotation as it seeks to regenerate the cashew space.
“We shall by this approach support the government’s drive to generate foreign exchange. As a listed product, our cashew shall always meet international standards as prescribed by the International Standards Organisation (ISO) which requires good temperature, moisture level and grade. Many stakeholders in the commodities value chain in Nigeria operate in silos. One of our company’s functions is to integrate the stakeholders in the value chain.” Abikoye explained.
Also speaking, LCFE Managing Director, Akin Akeredolu-Ale, noted that Nigeria has opportunities to earn robust income from trading on cashew nuts as it has the potential to contribute immensely to the nation’s gross domestic product (GDP).
“Nigerian cashew sector is dominated by smallholder farmers numbered at about 25,000 and some commercial plantations, with an average cultivated area of 325,000 hectares, local processing industry is growing gradually while there is a significant rise in export due to increased awareness of export potential and processing opportunities. Other actors in the ecosystems include local buying agents, processors, exporters, and service providers.
The challenges around the production and processing of cashew in Nigeria mainly centers around the primary production of cashew from aged trees but thanks to scientific research, there has been a substantial improvement in seed varieties that have introduced improved varieties which present primary production efforts need to take advantage of the meet the improved quality requirements of the international market,” he said.
For his part, the Chairman, Mega Group, Sam Onukwue expressed optimism that LCFE would transform the commodities ecosystem and put it on the global map.
He noted that one of the challenges that raw exporters face is inability to repatriate their funds back into the country while adding that the LCFE wants to make sure the processes are clear and through that Nigeria can continue to build on its reserves.