UK’s BII Commits $26.5 Million to Boost Food Security and Smallholder Farming in Africa

British International Investment (BII), a prominent development finance institution and impact investor in the United Kingdom, has recently unveiled a substantial commitment of US$26.5 million to AFEX, Africa’s premier commodities platform. AFEX currently operates an extensive network of over 200 warehouses across Nigeria, Kenya, and Uganda, serving more than 450,000 farmers. This partnership is poised to revolutionise Africa’s agricultural industry and significantly enhance food security for the continent.

Details on the Signing

The official signing of this momentous partnership took place today and was attended by key figures such as Jonny Baxter (the British Deputy High Commissioner in Lagos), Nick O’Donohoe (CEO of BII), and Ayodeji Balogun (CEO of AFEX Group).

The significant injection of capital from BII will be directed toward the construction of 20 modern warehouses in strategic locations within Nigeria, Kenya, and Uganda. In addition to expanding warehousing infrastructure, the funds will be used to upgrade warehouse technology and develop cutting-edge software designed to track post-harvest pricing. These advancements in smart storage solutions hold the potential to extend the shelf life of harvested crops, ultimately increasing the overall volume of food available for consumption.

Myriad of Benefits

The new warehouses will offer an additional storage capacity of 230,000 metric tons, making it possible for up to 200,000 more farmers to access affordable storage and optimise their sales from crop yields. This development has the potential to boost the incomes of smallholder farmers by more than 200 percent, providing them with a fair wage that is essential for their continued operation and the production of higher-quality crops for local consumption.

Agriculture plays a pivotal role in the economies of Nigeria, Kenya, and Uganda, constituting a quarter of their GDP and employing 70 percent of their populations, with 80 percent of these workers being smallholder and subsistence farmers. Currently, these farmers are grappling with economic uncertainty, limited market access, and the unreliability of crop sales. Falling yields and fluctuating incomes due to rising input costs and extreme weather events have added to their challenges.

Beyond warehousing and storage solutions, BII’s investment will also support the development of a soybean processing plant in Ibadan, Nigeria’s third-largest city by population, and a drying facility in Uganda. The construction of these facilities is expected to generate over 700 temporary jobs and more than 80 permanent positions.

Nick O’Donohoe, the CEO of BII, highlighted the importance of backing technology-driven companies like AFEX to reduce Africa’s food import bill, which has reached approximately US$30 billion in recent years. By supporting smallholder farmers and bolstering local food production, this partnership can contribute significantly to decreasing the import cost while increasing farmer incomes.

Ayodeji Balogun, CEO of AFEX Group, expressed his enthusiasm about the investment, emphasising its role in transforming agriculture and enhancing food security across Africa. He noted that the development of technologically advanced warehouses and essential facilities would expand market access and income potential for smallholder farmers, aligning with the UN Sustainable Development Goals (SDGs) on Zero Hunger, Decent Work and Economic Growth, and Responsible Consumption and Production.