- AFEX, an African commodities platform, has secured $26.5 million from British International Investment (BII) to improve food insecurity in Nigeria, Kenya, and Uganda.
- AFEX is a commodities exchange platform that facilitates efficient commodity trade in Africa. The company says it provides services to over 450,000 farmers.
- It plans to scale next-generation software for capturing post-harvest pricing and warehouse technology with the funds invested. By extending the shelf life of harvested crops, smart storage solutions can increase the amount of available food.
Food insecurity affects millions of people in Africa, making it a significant issue. The 2022 Global Report on Food Crises 2022 Mid-Year Update states that at least one in five Africans go to bed hungry and that 140 million Africans experience acute food insecurity.
In 2022, 17 million people were reportedly critically food insecure in Nigeria. In January 2023, it was projected that between June and August, 25 million Nigerians would go hungry.
As of January 9, 2023, 16.4 million Ugandans consumed insufficient food, representing an increase of 1.2 million food-insecure persons based on the last quarter of 2022.
Data indicates that between March and June 2023, over 5.4 million people in Kenya experienced acute food insecurity, and that number is likely to rise in the months that follow.
Even though Africa has a lot of potential for agriculture, many regions experience unpredictable weather patterns, floods, and droughts, which disrupt food production.
African countries are making several efforts to combat food insecurity, such as innovations in agriculture, sustainable farming practices, and utilising technology to enhance food distribution and production. And this is where AFEX comes in.
Currently running more than 200 warehouses in Nigeria, Kenya, and Uganda, AFEX is a commodities exchange platform that provides services to over 450,000 farmers.
AFEX began operations in Nigeria in 2014. Led by Ayodeji Balogun, the company trades maize, cocoa, soybeans, paddy rice, sorghum, and ginger. In January 2023, the company entered Uganda following its expansion into Kenya in 2022.
The company uses its warehouse network to provide farmers with offtake agreements at market prices and same-day payment.
The company will use the funds to construct 20 contemporary warehouses in strategic areas of Nigeria, Kenya, and Uganda.
Furthermore, the investment will scale its warehouse technology and state-of-the-art software that documents post-harvest pricing. Innovative storage techniques can increase the amount of food available by prolonging the shelf life of harvested crops.
The company claims that 230,000 metric tons (MT) of storage capacity of the additional warehouses will enable up to 200,000 more farmers to maximise crop harvest sales and access reasonably priced storage, potentially leading to a 200% increase in farmer incomes.
Also, AFEX will construct a soybean processing plant in Ibadan, Nigeria, and a drying facility in Uganda. The company says the storage and soy processing facilities will generate over 700 temporary and 80 permanent jobs.