By Jane Meza
Mombasa, Kenya: The British International Investment (BII), UK’s development finance institution (DFI) and impact investor, has announced a US$26.5 million commitment to Africa’s leading commodities platform AFEX.
AFEX currently operates over 200 warehouses in Nigeria, Kenya, and Uganda and serves over 450,000 farmers. This investment will help AFEX to expand its operations and provide more farmers with access to markets and financial services.
The investment intends to support structural improvements in Africa’s agricultural industry, which will significantly benefit smallholder farmers and lead to improvements in food security.
It will significantly benefit small-scale farmers and lead to improvements in food security.
British Deputy High Commissioner in Lagos Jonny Baxter, BII Chief Executive Officer Nick O’Donohoe, and AFEX Group CEO Ayodeji Balogun were present at the signing of the new partnership between BII and AFEX.
The investment will be used to build 20 state-of-the-art warehouses in key locations in Nigeria, Kenya, and Uganda. The capital will also be used to scale warehouse technology and next-generation software that captures post-harvest pricing. Smart storage solutions have the potential to extend the lifespan of harvested crops, increasing the amount of food available.
The new warehouses will provide 230,000 MT of storage space, allowing up to 200,000 more farmers to access low-cost storage and maximize crop sales. This could potentially increase farmer incomes by more than 200% and help smallholder farmers earn a fair wage, which is essential for them to remain in business and produce more and higher-quality crops for local consumption.
Agriculture in Nigeria, Kenya, and Uganda accounts for a quarter of GDP and employs 70% of their populations – 80% of whom are small-scale farmers and subsistence farmers.
Agriculture is a major economic driver in Nigeria, Kenya, and Uganda, accounting for a quarter of their GDP and employing 70% of their populations. Of these, 80% are small-scale farmers who rely on subsistence farming to make a living.
“The World Bank estimates that Africa’s food import bills have reached US$30 billion in recent decade, and this is why need to back technology-driven companies like AFEX because they help reduce that import cost by supporting the smallholders’ farmers to increase local food production while also boasting their incomes,” said BII Chief Executive Officer Mr. Nick O’Donohoe.
Speaking about the raise, AFEX Group CEO, Ayodeji Balogun said the investment from British International Investment is a landmark moment in the mission to revolutionize agriculture and elevate food security across Africa.
“By directing fresh capital towards the development of technologically advanced warehouses and critical facilities, we are significantly enhancing market access and income potential for smallholder farmers. In alignment with UN SDGs, our mission is to enable Africa to feed itself efficiently and sustainably. Today’s investment doesn’t just propel AFEX’s growth, it forges a more secure and prosperous future for an entire continent” Ayodeji Balogun said.
According to the British Deputy High Commissioner speaking in Lagos, Mr. Jonny Baxter the investment will contribute to the United Nations’ sustainable development goal of Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12).
“I am proud of British International Investment’s support which will enhance agricultural productivity and bolster food security in Nigeria. The agricultural sector stands as a vital pillar to Nigeria’s economy, playing a significant role in job creation and investment potential. The UK provided early-stage funding to AFEX, and I am delighted to see the company grow with such success. We look forward to continuing to support Nigeria’s agriculture sector and the opportunities this provides for its economic growth.” Concluded Mr. Baxter.
Farmers are currently facing a tough financial situation due to macroeconomic uncertainty, limited market access, and unreliable crop yields. Farmers’ incomes are increasingly being affected by price hikes of agricultural inputs and extreme weather events, and yields have fallen.
BII’s capital will also be used to develop a soybean processing plant in Ibadan, the third-largest city by population in Nigeria, and a drying facility in Uganda. The construction of the storage facilities and soy processing facilities will generate over 700 temporary jobs and more than 80 permanent roles
