Nigerian commodities startup AFEX bags $26.5m funding from BII
AFEX, Nigeria’s first private licensed commodities bourse, has secured $26.5 million in funding from the British International Investment (BII), the UK's development finance institution and impact investor. AFEX operates as a platform facilitating efficient commodity trade in Africa, addressing the challenges encountered by smallholder farmers: such as access to essential resources, credit facilities, micro-insurance, storage services, training, and market opportunities.
Presently, the company operates a network of more than 200 warehouses in Nigeria, Kenya, and Uganda, serving over 450,000 farmers. This recent cash injection from BII is expected to support vital structural enhancements within the agricultural industry, with a significant positive impact on smallholder farmers and food security.
Specifically, the BII investment will be channeled toward the construction of 20 modern warehouses across AFEX's markets while also advancing warehouse technology and developing software for post-harvest pricing analysis. These smart storage solutions have the potential to extend the shelf life of harvested crops, ultimately increasing the available food supply.
Agriculture in Nigeria, Kenya, and Uganda accounts for a quarter of GDP and employs 70% of their populations – 80% 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. This is particularly relevant in light of initiatives like AFEX, which aim to enhance agricultural practices and infrastructure, thereby unlocking Africa's agricultural potential and ensuring food security for its people.