By Obafemi Oredein

Special to Dow Jones Newswires


IBADAN, Nigeria--AFEX Commodity Exchange and NG Clearing Ltd. have signed an agreement in Lagos to develop infrastructure to facilitate the introduction and trading of commodity futures contracts in Nigeria.

NG Clearing, a central counterparty clearing house, said the infrastructure will help the central clearing of futures contracts for commodities such as cocoa, paddy rice, maize and soybean.

AFEX's commodity exchange will serve as the trading venue, while NG Clearing will serve as the central counterparty that guarantees the settlement of trades.

Trading of such commodities is currently limited to spot and over-the-counter markets, NG Clearing said, adding that with the futures market, participants can lock in prices and positions of various commodities ahead of time without facing the risk of default by a counterparty.

Ayodeji Balogun, chief executive officer of AFEX, said that "this collaboration with NG Clearing is a new leap for the financial market in the country that further opens opportunities for generating shared prosperity through the commodity market."

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(END) Dow Jones Newswires

11-11-22 0451ET