British International Investment (BII), the United Kingdom’s development finance institution (DFI) and impact investor, has announced a substantial commitment of US$26.5 million to AFEX, Africa’s foremost commodities platform. AFEX currently operates an extensive network of over 200 warehouses in Nigeria, Kenya, and Uganda, serving more than 450,000 farmers. This strategic investment aims to drive transformative changes within Africa’s agricultural sector, with a particular focus on improving the livelihoods of smallholder farmers and enhancing food security.
The formalization of the partnership between BII and AFEX was celebrated today at an event attended by the British Deputy High Commissioner in Lagos, Jonny Baxter, BII’s Chief Executive Officer, Nick O’Donohoe, and AFEX Group CEO, Ayodeji Balogun.
BII’s financial infusion will be directed towards the establishment of 20 state-of-the-art warehouses strategically located in Nigeria, Kenya, and Uganda. This capital injection will also facilitate the adoption of advanced warehouse technology and cutting-edge software designed to capture post-harvest pricing data. These innovative storage solutions have the potential to significantly extend the shelf life of harvested crops, consequently augmenting the available food supply.
The additional warehouses are anticipated to provide an additional 230,000 metric tons of storage capacity, allowing up to 200,000 more farmers to access affordable storage facilities and optimize their crop sales. This initiative holds the promise of increasing farmer incomes by over 200%, a crucial step in ensuring the sustainability of smallholder farmers and encouraging higher production and improved crop quality for local consumption.
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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% of these individuals being smallholder and subsistence farmers. Presently, these farmers grapple with a challenging financial landscape due to macroeconomic uncertainties, limited market access, and the unreliability of sales from crop harvests. Crop yields have dwindled, and farmers’ incomes are increasingly vulnerable to fluctuations in the prices of agricultural inputs and the impact of extreme weather events.
Furthermore, BII’s capital will be earmarked for the establishment of a soybean processing facility in Ibadan, Nigeria’s third-largest city by population, as well as a drying facility in Uganda. The construction of these storage and processing facilities is projected to create over 700 temporary jobs and more than 80 permanent positions.
Speaking about this transformative endeavor, Nick O’Donohoe, CEO of BII, emphasized, “The World Bank estimates that Africa’s food import bill has surged to approximately US$30 billion in recent years. This underscores the urgency of supporting technology-driven enterprises like AFEX, which play a crucial role in reducing import costs by empowering smallholder farmers to bolster local food production while enhancing their incomes.”
Ayodeji Balogun, CEO of AFEX Group, shared his perspective on this significant investment, stating, “This infusion of capital from British International Investment marks a watershed moment in our mission to revolutionize agriculture and elevate food security across Africa. By directing fresh capital towards the development of technologically advanced warehouses and critical facilities, we are making substantial strides in improving market access and income potential for smallholder farmers. In alignment with the United Nations Sustainable Development Goals (UN SDGs), our mission is to enable Africa to efficiently and sustainably feed itself. Today’s investment not only propels AFEX’s growth but also paves the way for a more secure and prosperous future for an entire continent.”
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British Deputy High Commissioner in Lagos, Jonny Baxter, expressed his pride in BII’s support, emphasizing the positive impact it will have on agricultural productivity and food security in Nigeria. He highlighted the agricultural sector’s pivotal role in job creation and investment opportunities for Nigeria’s economic growth. The UK’s early-stage funding for AFEX laid the foundation for the company’s success, and the commitment to further supporting Nigeria’s agriculture sector remains unwavering.
This investment aligns with the United Nations Sustainable Development Goals, particularly those related to Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12).
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard