Assetium Capital primed to capitalise on Nigeria’s $403 billion commodities market

Onome Amuge

Assetium Capital Management Limited, a commodities firm, said it is positioning itself to drive positive change in the Nigerian commodities sector,with the size of the commodities market expected to reach $402.90 billion by 2023.

This is as the  company with a capital base of N300 billion, said it aims to become one of the top three commodities companies in Nigeria by 2030.

During the launch event of Assetium Capital Management Limited, Abubakar Koro Muhammad, the company chairman, emphasised the critical role that commodities play in Nigeria’s economy. He stated that the firm’s goal is to build on the existing strength of the commodities sector, fortifying and deepening it to further contribute to Nigeria’s GDP.

Muhammad highlighted the impressive economic growth that Nigeria experienced between 2000 and 2014, during which the country’s GDP grew at an average rate of more than seven per cent per year. He noted that this growth was driven by a combination of favorable global conditions, prudent macroeconomic policies, and important structural reforms. He pointed out that the commodities sector played a crucial role in this period of growth, and that Assetium Capital aims to build on this momentum by further strengthening and diversifying the sector.

Muhammad noted that between 2015 and 2022, Nigeria’s economic growth rate slowed down, accompanied by a stagnation in per capita GDP. He cited a variety of factors contributing to this deceleration, including distortions in monetary and exchange rate policies, escalating fiscal deficits, trade protectionism, and external shocks such as the COVID-19 pandemic. These challenges, he noted, resulted in worsening economic fundamentals, including high inflation rates that reached a 17-year peak of 25.8 per cent in August 2023.

However, he also noted that recent economic reforms and policy initiatives undertaken by the Nigerian government offer hope for a turnaround in the economy’s fortunes.

To encourage and safeguard investments and market participants in the commodities sector, the Nigerian government has taken a proactive stance, with the Securities and Exchange Commission establishing a dedicated division to regulate the market.

Muhammad stated that this initiative would facilitate access to financing for commodities projects, and further the development of the commodities sector. He expressed optimism that the Nigerian government’s actions will create the right conditions for the commodities market to flourish and become a driver of economic growth.

He expressed confidence that the Nigerian economy is positioned for a rebound, with a forecasted average growth rate of 3.4 per cent from 2023 to 2025. This anticipated growth, he explained, is anticipated to be driven by a combination of reform initiatives, a revival in the agriculture and services sectors, and increased government spending on developmental projects.

“At the heart of this impending economic renaissance lies the commodities industry, a sector that has consistently played a pivotal role in contributing to Nigeria’s GDP. In the year 2022, agriculture alone accounted for over 30 per cent of the nation’s GDP.

Furthermore, commodities have consistently ranked among Nigeria’s top exports, with the top 10 items primarily composed of diverse commodities,” Muhammad said.

Also speaking, Kunle Awoluyi, the chief executive of Assetium Capital, highlighted the company’s commitment to integration across the entire commodities value chain, both upstream and downstream. He also stated that the company will leverage technology to reach its target market not only in Nigeria, but across Africa and globally. The company will capitalize on Nigeria’s large population to create a broad customer base, using technology to reach a wider range of people.

Awoluyi expressed confidence that this approach would enable the company to achieve its goal of becoming a leading player in the commodities sector.