British International Investment (BII), the United Kingdom’s development finance institution and impact investor, has announced a $26.5 million investment in AFEX, Africa’s top commodities platform. AFEX has over 200 warehouses in Nigeria, Kenya, and Uganda, serving over 450,000 farmers.
This initiative intends to drive structural reforms in Africa’s agricultural business, with a particular emphasis on assisting smallholder farmers and improving food security. The British Deputy High Commissioner in Lagos, Jonny Baxter, BII’s CEO, Nick O’Donohoe, and AFEX Group CEO, Ayodeji Balogun, were there to formally create the relationship between BII and AFEX.
The BII financing will be used to build 20 modern warehouses at strategic locations throughout Nigeria, Kenya, and Uganda. It will also allow for the advancement of warehouse technologies and next-generation software designed to record post-harvest prices.
These smart storage systems are expected to increase the available food volume by extending the shelf life of harvested crops. The new warehouses are estimated to add 230,000 metric tons of storage capacity, allowing up to 200,000 more farmers to access economical storage facilities and maximize crop harvest sales.
This might result in a more than 200% increase in farmer income, which is an important step toward guaranteeing the sustainability of smallholder farming by encouraging the production of higher-quality crops for local consumption.
Agriculture is important to the economies of Nigeria, Kenya, and Uganda, accounting for one-quarter of their GDP and employing 70% of their populations, with 80% of them being smallholder and subsistence farmers. Farmers are currently facing economic hardships as a result of issues such as macroeconomic uncertainty, limited market access, and unpredictable crop sales. Crop yields have fallen, and farmers’ earnings have suffered as a result of growing agricultural input costs and adverse weather events.
The funding will also aid in the establishment of a soybean processing factory in Ibadan. Over 700 temporary jobs and more than 80 permanent roles will be created during the development of these storage and processing facilities, adding to local employment and economic growth.
BII Chief Executive Officer Nick O’Donohoe commented on the deal, saying, “According to the World Bank, Africa’s food import bill has risen to around US$30 billion in recent decades. This is why we need to encourage technology-driven enterprises like AFEX, which help lower import costs by assisting smallholder farmers in increasing local food production while simultaneously increasing their income.”
AFEX Group CEO Ayodeji Balogun commented on the hike, saying, “By directing new capital toward the development of technologically advanced warehouses and critical facilities, we are significantly improving smallholder farmers’ market access and income potential.”
“Our mission, in accordance with the UN SDGs, is to enable Africa to feed itself efficiently and sustainably.” Today’s investment not only propels AFEX’s expansion, but it also helps to shape a more secure and prosperous future for an entire continent. Jonny Baxter, the British Deputy High Commissioner in Lagos, expressed his excitement, saying, “I am pleased that British International Investment is supporting agricultural productivity and food security in Nigeria.”
This investment, he claims, would help to achieve the United Nations development goals of Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12).
