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Nigeria’s leading agricultural commodities exchange and market player, AFEX, announced its expansion into Kenya, following a successful pilot phase in the most diversified economy in East Africa.
As part of the expansion, AFEX Fair Trade Limited (AFTL), has launched a $1 million loan programme that will allow farmers to gain access to seed and fertiliser for their crops, to mitigate ever rising commodities prices. Under the program, 5 000 Kenyan farmers will be able to take out input loans to access timely inputs and gradually scale their businesses.
Part of the company’s broader pan-African growth targets, the expansion will allow AFEX to replicate its success in Nigeria in securing better livelihoods for smallholder farmers and enable seamless access to pan-African commodities trading across the continent, while bolstering the continent’s food security.
Recently named first in the Financial Times ranking of Africa’s Fastest-Growing Companies – Agriculture & Commodities category 2022, AFEX is bringing its depth of experience, and unique storage and distribution solutions to Kenya, with a goal of trading over 500 000 metric tonnes of agricultural commodities by 2025. As of November 2021, analysts estimate 7.9 million people in Kenya lacked sufficient food for consumption, which represents 15.4 percent of Kenya’s population.
AFEX enables farmers to participate in market opportunities through its unique platform WorkBench.
The platform allows farmer transactions with its network of warehouses to be executed and recorded, supporting seamless trade across the eight warehouses currently operational in Kenya. A new 14-strong team is headed up by managing director, Tabitha Njuguna, who oversaw its successful pilot phase, during which time maize was the main commodity traded. There are plans to add rice, sorghum, and coffee to the exchange in the coming months.
In Uasin Gishu County, in the North Rift region of Kenya, AFEX identified a number of challenges for local producers, including access to affordable storage facilities, which meant many farmers storing their crops at home.
Additionally, despite a high level of mechanisation, as well as relatively expansive land holdings, producers find themselves cut off from opportunities to sell their produce, often relying on middlemen. It launched its Kenyan pilot operations in the last quarter of 2021, and has already recorded significant results, with over 4 000 metric tonnes of commodities traded and an estimated 7 100 served by AFEX.
Bold expansion plans for AFEX
The Kenya expansion signals its infrastructure commitment across the continent as it exports its business model to key strategic locations. In addition to Kenya, AFEX plans to expand to Benin, Togo, Ghana, Côte d’Ivoire, Tanzania, Ethiopia, Uganda, and Zambia within the next 10 years.
AFEX chief executive Ayodeji Balogun said, “This is one of the most dynamic commodities markets in the world and we are excited to work with Kenyan farmers to help them scale their operations. We are acutely aware that increasing food production is futile without an efficient and robust warehousing system to underpin commodities trading, and that technology is key to developing the whole agriculture space in Africa in the coming years.”
“The technology powering our operations is one of the best on the continent and is instrumental to our capacity to provide access to logistics delivery, advisory services, inputs, and crucially, access to the market, which are all key to the future of agriculture in Africa,” added Njuguna.
“The technology powering our operations is one of the best on the continent and is instrumental to our capacity to provide access to logistics delivery, advisory services, inputs, and crucially, access to the market, which are all key to the future of agriculture in Africa. We want to dismantle one of the biggest barriers for farmers growing their business – access to finance.”
AFEX works closely with smallholder farmers and uses its unique tech solutions to increase yields and productivity. The company has provided support to over 350 000 farmers across major grain-growing states in Nigeria.