Nigeria’s commodity firm, AFEX has launched a new $100 million Fund over a 10-year period to support smallholder farmers.
In a statement issued on Thursday, the company said the fund would strengthen food security in Africa, noting that three million metric tonnes (MT) of food would be produced annually on the continent.
“Food Security Fund (FSF) was created to support and ensure sufficient food production and optimise climate-smart innovations, AFEX said.
“AFEX’s fund will support the financing of 250,000 hectares of land for commercial and smallholder farming, initially consisting of 30,000 hectares in the Nigerian states of Kano, Kaduna, Oyo, Ogun, Cross River & the FCT, before covering markets across East and West Africa with additional impact across Ghana, Côte d’Ivoire, Kenya, Rwanda, Uganda and Tanzania.
According to the firm, insufficient warehouses as well as production has caused a decline in demand and led to a huge gap that is set to be closed through the launch of FSF.
“A significant portion of the funding will be allocated to constructing warehouses. In Nigeria alone, there is only capacity to store 4 percent of annual grain production. Restricted production has led to a 300,000 MT gap between demand and supply of seeds and a 10 million MT gap in demand and supply of grains, increasing food import costs, and declining capacity utilization of processing plants.
“Finance will always be a key component of that infrastructure, and so we’re very excited to roll out this bond to deliver what will eventually be a decade’s worth of impact.
“One of our core missions is to help the continent feed itself, and we deliberately aligned our company goals with the UN SDGs from the outset, in particular, the first and second goals to end hunger and eliminate poverty.”