A Game-Changing Partnership
In a momentous stride towards enhancing food security and supporting smallholder farmers, British International Investment (BII), the UK's development finance institution and impact investor, has committed $26.5 million to AFEX, Africa's foremost commodities platform. This collaboration marks a pivotal advancement in Africa's agricultural industry and promises to yield significant benefits, particularly for the region's smallholder farmers.
Charting the Path to Food Security
In light of the new partnership, the signing ceremony was a moment of significance. The event was graced by Jonny Baxter, the British Deputy High Commissioner in Lagos, Nick O’Donohoe, Chief Executive Officer of BII, and Ayodeji Balogun, CEO of AFEX Group. This monumental investment by BII will be instrumental in the construction of 20 modern warehouses strategically positioned in Nigeria, Kenya, and Uganda. Moreover, it will be allocated to the advancement of warehouse technology and next-generation software tailored to post-harvest pricing, enabling effective crop storage and prolonging the shelf life of harvested produce. The implications are profound; these solutions have the potential to substantially increase the volume of food available.
Empowering Smallholder Farmers
The impact of these additional warehouses extends far beyond bricks and mortar. They will augment storage capacity by an impressive 230,000 metric tons, facilitating access to low-cost storage for an additional 200,000 farmers. This expanded capacity is poised to boost farmer incomes by over 200%, a pivotal step towards fair wages and financial stability for smallholder farmers. Agriculture in Nigeria, Kenya, and Uganda holds a significant stake in the national economy, contributing a quarter of the GDP and employing 70% of the population. Crucially, 80% of these individuals are smallholder and subsistence farmers. Currently, they face a challenging financial landscape marked by macroeconomic uncertainty, limited market access, and unreliable sales from crop harvests. Falling yields and the compounding effects of price fluctuations and extreme weather events have further strained their income.
Beyond Warehouses: Enhancing Agricultural Infrastructure
BII's investment is a catalyst for positive change, not confined to warehouse construction. It will fund the development of a soybean processing plant in Ibadan, Nigeria's third-largest city by population, and a drying facility in Uganda. These infrastructure projects are not only transformative in terms of the agricultural landscape but also from a job creation perspective. Over 700 temporary jobs and more than 80 permanent positions will be generated by the construction of these facilities.
The Bigger Picture: Transforming Agriculture
Nick O’Donohoe, CEO of BII, underscores the significance of this venture by pointing out that "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."
AFEX's Vision for a More Secure Continent
Ayodeji Balogun, CEO of AFEX Group, embraces the impact of this investment with enthusiasm, stating, "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 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 Support for Agricultural Prosperity
The British Deputy High Commissioner in Lagos, Jonny Baxter, expresses his pride in BII's support, emphasizing its role in enhancing agricultural productivity and bolstering food security in Nigeria. The agricultural sector is a cornerstone of the Nigerian economy, creating jobs and investment potential. The UK's early-stage funding to AFEX and the company's subsequent growth exemplify the opportunities this sector presents for economic development.
Toward Sustainable Development Goals
This substantial investment aligns with critical United Nations Sustainable Development Goals, particularly Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12). It underscores the potential for impactful investment to drive positive change, not only in agriculture but also in the broader context of Africa's sustainable development.