Abuja, Nigeria. 5th September 2022 - AFEX, Nigeria's leading commodities market player on Monday, held a side event at Africa Green Revolution Forum (AGRF) 2022 summit, to advocate for financing for Agri-SMEs in Africa to boost their growth and impact potential in pushing forward sustainable and inclusive production in the sector.

Themed “Finance for Agri-SMEs in Time of Crises: Opportunities and Challenges”, the side event hosted together with Smallholder and Agri-SME Finance and Investment Network (SAFIN) and the International Fund for Agricultural Development (IFAD), provided a platform for different stakeholders to explore coordinated large-scale actions to unlock access to finance for agri-SMEs.

In many contexts, agri-SMEs such as farmer organizations, processors, input providers, producers, and distributors are a critical backbone of the sector and play essential roles along the entire value chain. Therefore, access to finance enables Agri-SMEs to invest in the infrastructure, equipment, and cash flow that help them produce, purchase, store, process, and better market their products.

AFEX CEO, Ayodeji Balogun, during the panel session, said that ‘there is a need to redefine the perception of agricultural risk in Africa. A critical issue that is faced in the production within the sector is the transaction cost between producer smallholders and Agri SMEs. Hence, we are embracing new technology in the field that is aggregating data for over 1000 – 10,000 farmers and bringing better visibility to the fragmented and polarized space.

Over the years, agricultural policies across African countries have that underlining phase where the crux of the policy is rural poverty alleviation rather than competitiveness, growth, or macro-economic transformation, though it is not bad, it just means we will continue to be sub-optimal from a food balance sheet standpoint.

I believe Africa needs to start looking at it from an economic of competitiveness that is aligned towards the macro priorities of the country rather than prime focus on reducing the number of poor people in rural areas and solving that problem.’ He commented.

In another panel session, under the theme “Climate Finance and Technology: Opportunities for Youth, speakers highlighted how Agriculture is at a huge risk of climate change. The issues in agriculture on the continent are all integrated and cannot be evaluated in silos – climate, finance, youth inclusion, and poverty. To create resilience and promote sustainability and equitable food systems, we must invest in climate-smart and efficient seed technologies. Hence, to unlock more capital for Climate Smart Agriculture, it is important to create an ecosystem of service providers that can engage youth in agriculture and provide bundled solutions. This will reduce the barrier to adoption and start-up cost.

According to Hemense Orkar, VP, of Corporate Services, AFEX on the panel of “Learnings from demand-led approaches to value chain development”, Technology (Digital solutions) should be applied to reduce bottlenecks in the value chain whilst taking cognizance of the nuances in the market. It is essential to deploy digital solutions that are specifically tailored to the needs in the value chain rather than copying what may seem to have worked in another clime and pasting that in another market thereby causing more bottlenecks and making the technology doomed for failure.’

Since its inception in 2014, AFEX has built significant platforms and operations to strengthen the resilience of Africa’s food system, especially smallholder farmers with access to finance, infrastructure, and markets as underlying factors. Known for its vision to be a reference point for commodities in Africa, AFEX has reached over 430,000 farmers and has over 100 agri-business registered on its Exchange to enable the next generation of smallholder farmers to escape poverty cycles and boost production levels.

Additionally, as part of its African vision, AFEX has committed to leveling-up Africa’s Agric-tech sector by replicating its infrastructures across the continent in countries like Kenya, Uganda, Cote d’Ivoire, and Ghana. Recently, the trading arm of the company, AFEX Fair Trade Limited launched a $1 million loan program that will enable 5,000 Kenyan farmers to gain access to seed and fertilizer for their crops, to mitigate the ever-rising commodities prices.

Bolstered by an existing supply chain infrastructure of over 100 warehouses and digital trading platforms like ComX and Workbench, which link investors with producers and processors, AFEX’s commitment to the agricultural sector and deep industry knowledge will add crucial expertise to this much-needed activity.