British International Investment (BII), the United Kingdom’s development finance institution and impact investor, has unveiled a substantial commitment of $26.5 million to AFEX, Africa’s premier commodities platform. This financial infusion represents a significant step toward fostering positive change in Africa’s agricultural sector, with a primary emphasis on empowering smallholder farmers and fortifying food security across the continent.
AFEX presently boasts an extensive network of over 200 warehouses across Nigeria, Kenya, and Uganda, and it serves as a critical resource for more than 450,000 farmers. The newfound collaboration between BII and AFEX has been officially solidified, with esteemed attendees including the British Deputy High Commissioner in Lagos, Jonny Baxter, BII’s CEO, Nick O’Donohoe, and AFEX Group CEO, Ayodeji Balogun.
Elevating Agricultural Productivity and Ensuring Food Security
The financial support from BII will be strategically allocated to the construction of 20 state-of-the-art warehouses in key locations within Nigeria, Kenya, and Uganda. Furthermore, it will facilitate the expansion of warehouse technology and the implementation of next-generation software, specifically designed for post-harvest pricing analysis. These advanced storage solutions are expected to extend the shelf life of harvested crops, resulting in a substantial increase in the volume of available food resources.
The introduction of these modern warehouses is anticipated to augment storage capacity by a remarkable 230,000 metric tons, thereby offering an affordable storage solution for an additional 200,000 farmers. This surge in accessible storage is poised to yield a potential increase of more than 200% in the income of smallholder farmers. This, in turn, will be a critical stride towards ensuring the sustainability of small-scale farming by stimulating greater production of high-quality crops for local consumption.
The Pivotal Role of Agriculture in African Economies
Agriculture serves as a cornerstone of the economies in Nigeria, Kenya, and Uganda, accounting for a significant quarter of their GDP and engaging a staggering 70% of their populations, with 80% of those involved being smallholder and subsistence farmers. The challenges facing these farmers are substantial, ranging from economic uncertainties and limited market access to unreliable crop sales. Decreasing crop yields, rising input costs, and extreme weather conditions further compound the difficulties faced by smallholder farmers.
BII’s capital infusion will also contribute to the establishment of a soybean processing plant in Ibadan, a move set to generate over 700 temporary job opportunities and more than 80 permanent positions. This initiative not only fosters local employment but also contributes to the broader economic growth of the region.
The Insights from Key Figures
Nick O’Donohoe, Chief Executive Officer of BII, commented on this momentous transaction, saying, “The World Bank estimates that Africa’s food import bill has reached approximately $30 billion in recent years. This underscores the imperative of supporting technology-driven companies like AFEX, as they play a pivotal role in reducing import costs by empowering smallholder farmers to enhance local food production and, in tandem, bolstering their incomes.”
Ayodeji Balogun, the CEO of AFEX Group, also shared his perspective on this significant funding boost: “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 the United Nations Sustainable Development Goals (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.”
Jonny Baxter, the British Deputy High Commissioner in Lagos, expressed his delight at the collaboration: “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 of 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’s remarkable growth. We look forward to continuing to support Nigeria’s agriculture sector and the opportunities it provides for economic growth.”
He further emphasized that this investment aligns with the United Nations’ development goals, specifically targeting Zero Hunger (SDG2), Decent Work and Economic Growth (SDG8), and Responsible Consumption and Production (SDG12).
In Closing
The commitment of $26.5 million from British International Investment to AFEX represents a monumental step in reshaping the landscape of agriculture in Nigeria, Kenya, and Uganda. By investing in modern warehousing infrastructure, advanced technology, and post-harvest pricing analysis, BII is laying the foundation for enhanced food security, increased agricultural productivity, and improved livelihoods for smallholder farmers. This collaboration underscores the importance of empowering local agriculture to reduce the import bill and foster economic growth, all in alignment with the United Nations’ Sustainable Development Goals. The potential for positive change in these regions is considerable, and this partnership between BII and AFEX is a testament to the transformative power of strategic investment in the agricultural sector.
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