AFEX, an African commodities platform, has secured a substantial $26.5 million investment from British International Investment (BII) with a noble aim: to address the pressing issue of food insecurity in Nigeria, Kenya, and Uganda.
Dedicated to fostering efficient commodity trade across Africa, AFEX serves the needs of an impressive 450,000 farmers. With this newfound capital, AFEX is poised to implement cutting-edge software for capturing post-harvest pricing data and advancing warehouse technology.
The ultimate goal is to extend the shelf life of harvested crops, ultimately boosting the food supply.
Food insecurity is a significant challenge in Africa, affecting millions of individuals. According to the 2022 Global Report on Food Crises Mid-Year Update, at least one in five Africans faces hunger, with 140 million Africans experiencing acute food insecurity.
In 2022, Nigeria saw a staggering 17 million people grappling with severe food insecurity, and projections for January 2023 indicate that 25 million Nigerians could experience hunger between June and August.
Uganda is not immune to these challenges either, with 16.4 million people consuming insufficient food as of January 9, 2023.
This marks a significant increase from the last quarter of 2022 when 1.2 million more Ugandans faced food insecurity.
Kenya faces its own challenges, with data indicating that over 5.4 million people experienced acute food insecurity between March and June 2023, and the situation is expected to worsen in the months ahead.
The continent’s potential for agriculture is vast, but unpredictable weather patterns, floods, and droughts often disrupt food production.
African countries are actively working to combat food insecurity through innovations in agriculture, sustainable farming practices, and leveraging technology for improved food distribution and production.
AFEX plays a crucial role in these efforts, currently operating more than 200 warehouses in Nigeria, Kenya, and Uganda and serving over 450,000 farmers.
AFEX, under the leadership of Ayodeji Balogun, began operations in Nigeria in 2014, where it trades in various commodities, including maize, cocoa, soybeans, paddy rice, sorghum, and ginger.
In January 2023, the company expanded into Uganda, following its 2022 entry into Kenya.
One of AFEX’s standout offerings is its warehouse network, which provides farmers with offtake agreements at market prices and ensures same-day payment.
The newly acquired funds will be utilized to construct 20 modern warehouses in strategic locations across Nigeria, Kenya, and Uganda.
Moreover, this investment will facilitate the scaling of AFEX’s warehouse technology and state-of-the-art software for documenting post-harvest pricing.
These innovative storage solutions have the potential to increase food availability by preserving the shelf life of harvested crops.
AFEX anticipates that the additional warehouse capacity of 230,000 metric tons will enable up to 200,000 more farmers to optimize their crop harvest sales and access affordable storage, potentially leading to a remarkable 200% increase in farmer incomes.
In addition to expanding its storage capabilities, AFEX is set to construct a soybean processing plant in Ibadan, Nigeria, and a drying facility in Uganda.
These ventures are expected to create over 700 temporary and 80 permanent jobs, further contributing to economic development and food security in the region.
