The United Kingdom’s development finance institution, British International Investment (BII), has announced a $26.5 million commitment to AFEX, Africa’s leading commodities platform.
The partnership between BII and AFEX is part of a broader effort to improve food security and promote agricultural development in Nigeria, Kenya, and Uganda. The funding will go towards the construction of more warehouses and other infrastructure, as well as the expansion of AFEX’s operations in these countries, aimed at improving access to markets and financing for small-scale farmers who play a vital role in the agricultural sector and the economies of these countries.
The partnership agreement was officially signed recently at a ceremony in Lagos, attended by Jonny Baxter,British deputy high commissioner; Nick O’Donohoe, BII CEO; and Ayodeji Balogun,CEO of AFEX Group.
The funding from BII will be used to build 20 modern warehouses in strategic locations across Nigeria, Kenya, and Uganda. This infrastructure will be vital in facilitating the storage and transportation of agricultural products, and the warehouses will be equipped with advanced software to track inventory and prices.
The additional storage capacity provided by the new warehouses is expected to be a game-changer for farmers in the region. With access to low-cost storage, farmers will be able to store their crops for longer periods of time, allowing them to wait for prices to rise before selling their products. This could increase farmer incomes by up to 200 per cent, providing a much-needed boost to smallholder farmers who are often struggling to make ends meet.
In addition to the construction of the new warehouses, BII’s investment will also fund the development of a soybean processing plant in Ibadan, Nigeria’s third largest city by population and a drying facility in Uganda. These projects are expected to create more than 700 temporary jobs and over 80 permanent positions, providing significant economic benefits to local communities.
AFEX, in a statement, described agriculture as a vital sector in Nigeria, Kenya, and Uganda, accounting for 25 per cent of GDP and employing 70 per cent of the population. It noted that smallholder and subsistence farmers make up the majority of the agricultural workforce, but they face numerous challenges that limit their ability to earn a sustainable income. These challenges include macroeconomic uncertainty, lack of access to markets, and unpredictable sales from crop harvests.
Commenting on the transaction,Nick O’Donohoe, BII’s chief executive officer said, “The World Bank estimates that Africa’s food import bill has reached $30 billion in recent decades. This is why we need to back technology-driven companies like AFEX because they help reduce that import cost by supporting smallholder farmers to increase local food production and boost their incomes.”
In response, Ayodeji Balogun, AFEX Group CEO highlighted the significance of the investment, describing it as a landmark moment in the commodities player’s mission to revolutionise agriculture and elevate food security across Africa.
“By directing fresh capital towards developing technologically advanced warehouses and critical facilities, we are significantly enhancing market access and income potential for smallholder farmers,” Balogun said.
On his part, Jonny Baxter,British deputy high commissioner in Lagos expressed pride in BII’s support and its role in enhancing agricultural productivity and food security in Nigeria.
Baxter also acknowledged the vital importance of the agricultural sector in Nigeria’s economy and looked forward to the continued growth of AFEX.
The investment is set to support the achievement of several UN Sustainable Development Goals, including Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12). It is also considered a crucial step towards addressing the challenges of food insecurity and promoting sustainable agricultural practices in Africa.