British International Investment (BII), the UK's development finance institution and impact investor, has announced a substantial investment of $26.5 million in AFEX, Africa's premier commodities platform. AFEX currently operates more than 200 warehouses in Nigeria, Kenya, and Uganda, benefiting over 450,000 farmers.
The primary goal of this investment is to drive significant structural improvements in Africa's agricultural industry, with a specific focus on supporting smallholder farmers and enhancing food security.
The official partnership between BII and AFEX was celebrated with the presence of Jonny Baxter, the British Deputy High Commissioner in Lagos, Nick O'Donohoe, BII's CEO, and Ayodeji Balogun, CEO of AFEX Group.
Enhancing Agricultural Productivity and Food Security BII's funding will be deployed to construct 20 state-of-the-art warehouses strategically located across Nigeria, Kenya, and Uganda. This investment will also facilitate the expansion of warehouse technology and advanced software designed to capture post-harvest pricing. These smart storage solutions are expected to extend the shelf life of harvested crops, resulting in increased food availability.
The new warehouses are projected to offer an additional storage capacity of 230,000 metric tons, allowing approximately 200,000 more farmers to access cost-effective storage facilities and maximize the sale of their crop yields. This initiative could potentially lead to over a 200% increase in farmer incomes, a critical step towards ensuring the sustainability of smallholder farming and promoting higher-quality crop production for local consumption.
The Role of Agriculture in African Economies Agriculture plays a pivotal role in the economies of Nigeria, Kenya, and Uganda, contributing a quarter of their GDP and employing 70% of their populations, with 80% being smallholder and subsistence farmers. However, farmers currently face economic challenges due to factors like macroeconomic uncertainty, limited market access, and unreliable crop sales.
BII's capital injection will also facilitate the establishment of a soybean processing plant in Ibadan. The construction of these storage and processing facilities is expected to create over 700 temporary jobs and more than 80 permanent positions, contributing to local employment and economic growth.
Nick O'Donohoe, Chief Executive Officer of BII, stated, "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 support 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."
Ayodeji Balogun, CEO of AFEX Group, highlighted the significance of this investment by stating, "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."
Jonny Baxter, British Deputy High Commissioner in Lagos, expressed his satisfaction with the investment, emphasizing its role in enhancing agricultural productivity and bolstering food security in Nigeria. He underlined the pivotal role of the agricultural sector in Nigeria's economy, including job creation and investment potential. Furthermore, this investment aligns with the United Nations development goals, particularly Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12).
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