AFEX, Nigeria-based commodities exchange and commodities market player founded in 2014 has announced its expansion into the Kenyan market to boost food security in the country.
According to the company, this expansion came after carrying out a successful pilot phase in Nigeria, the biggest economy in Africa.
As part of the expansion, the exchange company disclosed that AFEX Fair Trade Limited (AFTL) launched a $1 million loan program that will enable farmers gain access to seed and fertilizer for their crops and mitigate ever rising commodities prices.
Similarly, AFEX stated that 5000 Kenyan farmers will be able to take out input loans to access timely inputs and gradually scale their businesses under the programme.
Ayodeji Balogun, chief executive officer at AFEX while speaking about the expansion 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.”
He stated that his experience in building the capital market in East Africa widened his understanding of the challenges associated with fragmented supply chain, inefficient price structure and market volatility, adding that the expansion into Kenyan market aims to meet those needs and help Kenyan farmers to boost national food security and ensure sustainable development for future generations .
Tabitha Njuguna, managing director at AFEX Fair Trade Limited (AFTL) Kenya, stated that the company leverages innovative technology for operational efficiency including logistics services and others to improve yield and productivity.
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“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. So far, we’re delighted to have enabled 70 percent of the 5,000 Kenyan farmers who approached AFEX for input loans and we are committed to empowering many more farmers over the next few months,” Njuguna said.
AFEX stated that the expansion will help in replicating its success in Nigeria in securing better livelihoods for smallholder farmers as part of the company’s broader pan-African growth targets and enabling seamless access to pan-African commodities trading across the continent.
The exchange company which said it was recently named first in the Financial Times (FT) ranking of Africa’s Fastest-Growing Companies in Agriculture & Commodities category 2022, disclosed that it is bringing depth of experience, unique storage and distribution solutions to Kenya, with a goal of trading over 500,000 metric tonnes of agricultural commodities by 2025.
Citing a report from Analyst in November 2021, the exchange company stated that 7.9 million people in Kenya lacked sufficient food for consumption, which represents 15.4 percent of Kenya’s population and the expansion into the market will help in tackling this challenge.
Meanwhile, AFEX also explained that it enables farmers to participate in market opportunities through its platform Workbench which allows farmer transactions with AFEX’s network of warehouses to be executed and recorded, supporting seamless trade across the eight warehouses currently operational in Kenya.
The company disclosed plans to expand to Benin, Togo, Ghana, Côte d’Ivoire, Tanzania, Ethiopia, Uganda, and Zambia within the next 10 years.
