NIGERIA– British International Investment (BII), the United Kingdom’s development finance institution (DFI) and impact investor, has announced a significant commitment of US$26.5 million to AFEX, Africa’s leading commodities platform.
AFEX operates over 200 warehouses, serving over 450,000 farmers in these three African countries. The investment from BII will facilitate structural improvements in Africa’s agricultural sector, benefiting small-scale farmers and enhancing food security.
The partnership agreement was signed at a ceremony attended by the British Deputy High Commissioner in Lagos, Jonny Baxter, BII Chief Executive Officer Nick O’Donohoe, and AFEX Group CEO Ayodeji Balogun.
The funds from BII will be used to establish 20 modern warehouses in strategic locations within Nigeria, Kenya, and Uganda.
Additionally, investments will be directed toward warehouse technology and advanced software to capture post-harvest pricing, preserve crop quality, and increase food supply.
The new warehouses will provide an additional storage capacity of 230,000 metric tons, opening access to low-cost storage for up to 200,000 more farmers. It can increase farmer incomes by over 200%, crucial for supporting smallholder farmers and ensuring their continued production of high-quality crops for local consumption.
Agriculture plays a significant role in the economies of Nigeria, Kenya, and Uganda, contributing to 25% of GDP and employing 70% of the population, with 80% of those being smallholder and subsistence farmers.
Presently, these farmers face financial challenges due to macroeconomic uncertainty, limited market access, and unreliable sales from crop harvests. This investment by BII aims to address these issues and revitalize the agricultural sector.
BII’s funds will also support the development of a soybean processing plant in Ibadan, Nigeria’s third-largest city, and a drying facility in Uganda. These projects will generate more than 700 temporary jobs and over 80 permanent positions, contributing to local employment opportunities.
“The World Bank estimates that Africa’s food import bill has reached c. US$30 billion in recent decades. 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,” BII Chief Executive Officer Nick O’Donohoe commented on the transaction.
In response, AFEX Group CEO Ayodeji Balogun highlighted the significance of the investment, saying, “This investment from British International Investment is a landmark moment in our mission to revolutionize 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.”
British Deputy High Commissioner in Lagos, Jonny Baxter, expressed pride in BII’s support and its role in enhancing agricultural productivity and food security in Nigeria.
He acknowledged the vital importance of the agricultural sector in Nigeria’s economy and looked forward to the continued growth of AFEX.
This investment aligns with several United Nations Sustainable Development Goals, including Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12).
It marks a significant step towards reducing food insecurity and promoting sustainable agricultural development in the region.