By Checky Abuje
British International Investment (BII), the UK’s development finance institution (DFI) and impact investor commits US$26.5 million to AFEX, Africa’s leading commodities platform, which currently operates over 200 warehouses in Nigeria, Kenya, and Uganda, serving over 450,000 farmers.
The investment is aimed at supporting structural improvements in Africa’s fragile agricultural industry, which will significantly benefit smallholder farmers and lead to improvements in food security.
The signing of BII and AFEX’s new partnership was attended by British Deputy High Commissioner in Lagos Jonny Baxter, BII Chief Executive Officer Nick O’Donohoe, and AFEX Group CEO Ayodeji Balogun.
Speaking in Lagos during a media briefing, Jonny Baxter said the investment will be used to build 20 modern warehouses in strategic locations in Nigeria, Kenya, and Uganda. “The capital of this investment will also scale up warehouse technology and next-generation software that captures post-harvest pricing,” remarked Baxter.
The envoy said Smart storage solutions have the potential to preserve the lifespan of harvested crops, thus increasing the volume of food available.
The additional warehouses will provide 230,000 MT of storage capacity, enabling up to 200,000 more farmers to access low-cost storage and maximise sales from crop harvests, potentially helping increase farmer incomes by more than 200 percent. The initiative which is geared towards Supporting smallholder farmers to achieve a fair wage is vital to ensure they remain in operation, producing more and higher quality crops for local consumption.
Agriculture in Nigeria, Kenya, and Uganda accounts for a quarter of GDP and employs 70 percent of their populations – 80 percent of whom are smallholder and subsistence farmers. Currently, farmers face a difficult financial outlook due to macroeconomic uncertainty, limited market access, and poor reliability of sales from crop harvests. Yields have fallen, and farmers’ incomes are increasingly affected by price hikes of agricultural inputs and extreme weather events.
Ibadan, the third largest city by population in Nigeria and Uganda will benefit immensely by developing a soybean processing plant and a drying facility respectively from the investment. The duo investments will employ more than 600 casual workers as well as over 80 permanent employees
BII Chief Executive Officer, Nick O’Donohoe said, “The World Bank estimates that Africa’s food import bill has reached c.US$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, while also boosting their incomes.”
AFEX Group CEO, Ayodeji Balogun reiterated that this investment from British International Investment is a landmark moment in their mission to revolutionize agriculture and elevate food security across Africa, through directing fresh capital toward the development of technologically advanced warehouses and critical facilities. “We are significantly enhancing market access and income potential for smallholder farmers,” said Balogun.
In alignment with UN SDGs, this mission will enable Africa to feed itself efficiently and sustainably. The investment doesn’t just propel AFEX’s growth, it forges a more secure and prosperous future for an entire continent.
British Deputy High Commissioner in Lagos, Jonny Baxter said: “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 of 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.”
This 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).