AFEX, a Nigerian company, has expanded its operations to Kenya.

Following a successful pilot phase, AFEX, Nigeria’s commodities exchange and commodities market platform, has announced its expansion into Kenya.

AFEX Fair Trade Limited (AFTL) has launched a $1 million loan program as part of the expansion to provide farmers with access to seed and fertilizer for their crops, thereby mitigating rising commodity prices. Under the program, 5000 Kenyan farmers will be able to access timely inputs and gradually scale their businesses by taking out input loans.

“This is one of the most dynamic commodities markets in the world,” said Ayodeji Balogun, CEO of AFEX, “and we are excited to work with Kenyan farmers to help them scale their operations.” We are acutely aware that increasing food production is pointless without an efficient and robust warehousing system to support commodity trading, and that technology will be critical to developing Africa’s entire agriculture space in the coming years.

Through its unique platform WorkBench, AFEX enables farmers to participate in market opportunities. Farmers can use the platform to execute and record transactions with AFEX’s network of warehouses, allowing for seamless trade across Kenya’s eight warehouses.

The expansion will enable AFEX to replicate its success in Nigeria in securing better livelihoods for smallholder farmers and enabling seamless access to pan-African commodities trading across the continent, thereby bolstering food security on the continent.

AFEX was recently named first in the Financial Times (FT) ranking of Africa’s Fastest-Growing Companies – Agriculture & Commodities category 2022. AFEX is bringing its depth of experience, as well as unique storage and distribution solutions, to Kenya, with the goal of trading over 500,000 metric tonnes of agricultural commodities by 2025. Analysts estimate that 7.9 million Kenyans, or 15.4 percent of the country’s population, lacked sufficient food for consumption as of November 2021.

Tabitha Njuguna, Managing Director of AFEX Kenya, oversaw the company’s successful pilot phase, during which maize was the main commodity traded. In the coming months, rice, sorghum, and coffee will be added to the exchange.

AFEX identified a number of challenges for local producers in Uasin Gishu County, Kenya’s North Rift region, including access to affordable storage facilities, which resulted in many farmers storing their crops at home. Furthermore, despite high levels of mechanization and relatively large land holdings, producers are cut off from opportunities to sell their produce, often relying on middlemen.

AFEX began its Kenyan pilot operations in the fourth quarter of 2021 and has already achieved significant results, with over 4,000 metric tonnes of commodities traded and an estimated 7,100 customers served.

The Kenya expansion demonstrates AFEX’s commitment to infrastructure across the continent as it exports its business model to key strategic locations. AFEX intends to expand into Benin, Togo, Ghana, Côte d’Ivoire, Tanzania, Ethiopia, Uganda, and Zambia over the next ten years, in addition to Kenya.

AFEX anticipates strong growth and significant measurable impact in Kenya’s relatively more developed agricultural sector, having built itself from the ground up in an agricultural sector widely perceived as difficult for businesses to operate in.

Kenyan farmers have larger holdings on average than their Nigerian counterparts, as well as better developed storage and distribution facilities.

“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, market access,” said Tabitha Njuguna, MD, AFEX Fair Trade Limited (AFTL) , Kenya. We want to remove one of the most significant barriers to farmer growth: access to finance. So far, we are pleased to have assisted 70% of the 5,000 Kenyan farmers who approached AFEX for input loans, and we are committed to assisting many more farmers in the coming months.”

AFEX collaborates closely with smallholder farmers and employs cutting-edge technology to boost yields and productivity. Over 350,000 farmers in Nigeria’s major grain-growing states have received assistance from the company. In Nigeria, AFEX operates 126 warehouses with a total storage capacity of 314,000MT. Since its inception in 2014, AFEX has been dedicated to elevating Africa’s agro-tech sector. AFEX improves food security and efficiency in food production by bridging the gap between agro-processors and investors.

AFEX uses Africa’s resources and talent to create shared wealth and prosperity. Its infrastructure and platform investments are aimed at releasing capital to power a trust economy in Africa’s commodity markets. AFEX has developed and deployed a viable commodities exchange model for the West African market since its inception in 2014, and it is on track to impact one million producers by providing services in productivity and value capture, as well as access to finance and markets. In the next five years, the company will facilitate trade with Africa worth more than USD500 million by implementing an efficient market system.