· Partnership will enhance agricultural productivity and improve food security
· Multiplies storage capacity, develops processing capacity and creates jobs
· 20 new AFEX warehouses will improve access to markets, facilitate trade and contribute to a potential increase of over 200 per cent in farmer income.
Lagos, 1 November 2023 - British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, today announced a US$26.5 million commitment to AFEX, Africa’s leading commodities platform, which currently operates over 200 warehouses in Nigeria, Kenya, and Uganda and serves over 450,000 farmers. The investment will support structural improvements in Africa’s agricultural industry, which will significantly benefit smallholder farmers and lead to improvements in food security.
The signing of BII and AFEX’s new partnership took place today. It was attended by British Deputy High Commissioner in Lagos Jonny Baxter, BII Chief Executive Officer Nick O’Donohoe, and AFEX Group CEO Ayodeji Balogun.
BII’s investment will be used to build 20 modern warehouses in strategic locations in Nigeria, Kenya, and Uganda. Its capital will also scale warehouse technology and next-generation software that captures post-harvest pricing. Smart storage solutions have the potential to preserve the lifespan of harvested crops, and so 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 per cent. 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 per cent of their populations – 80 per cent 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.
BII’s capital will also be used to develop a soybean processing plant in Ibadan, the third-largest city by population in Nigeria, and a drying facility in Uganda. The construction of the storage facilities and soy processing facilities will generate over 700 temporary jobs and more than 80 permanent roles.
Commenting on the transaction, 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.”
Speaking about the raise, AFEX Group CEO, Ayodeji Balogun said, “This investment from British International Investment is a landmark moment in our mission to revolutionise agriculture and elevate food security across Africa. 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.”
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 to 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 on Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8) and Responsible Consumption and Production (SDG12).
Notes to editors
British International Investment: Clare Murray | firstname.lastname@example.org
About British International Investment
· British International Investment is the UK’s development finance institution and impact investor.
· British International Investment is a trusted investment partner to businesses in Africa, Asia and the Caribbean.
· It invests to support the UK Government’s Clean Green Initiative and to create productive, sustainable and inclusive economies in our markets.
· Between 2022-2026, at least 30 percent of BII’s total new commitments by value will be in climate finance.
· BII is also a founding member of the 2X Challenge which has raised over $16 billion to empower women’s economic development.
· The company has investments in over 1,470 businesses across 65 countries and total assets of £8.1 billion.
AFEX is a platform business that enables efficient trade for commodities in Africa. Solutions start at the producer level, ensuring improvement in productivity and livelihoods while building up commodity volumes in the right quality and quantity for local and regional trade.
Operating through 3 business units, AFEX addresses the challenges faced by smallholder farmers, providing better access to inputs, credit facilities, micro-insurance, storage services, training, and markets. Partnership with different key players across the agricultural value chain, including processors, logistics service providers, financial institutions, and regulatory authorities, makes our goal of supporting Africa's food security possible.
A range of clients and members also trade physical commodities and commodity contracts through AFEX’s technology platforms as AFEX continuously bridges the gap between the capital market and the commodities market, unlocking finance for production, trade, processing, and export of commodities.