AFEX's currently creating wealthy farmers, boosting investments — Balogun

By Gabriel Ewepu

On this interview, the Chief Government Officer, AFEX Commodities Change Restricted, Ayodeji Balogun, disclosed efforts made by his firm in creating rich farmers in Nigeria and boosting investments alongside varied worth chains within the final 5 years, as he speaks on different salient points within the agricultural sector.


Are you able to give a quick background of AFEX Commodities Change Market?

AFEX has been working in Nigeria since 2014, and so we now have a 5-year historical past and legacy of with the ability to present storage and collateral administration for commodities utilizing world-class processes but in addition top-tier expertise that manages the bottom itself. Over the previous 5 years, AFEX has constructed over 60 warehouses throughout Nigeria. We satisfaction ourselves on the most important community of economic storage companies and as a licensed commodities change and warehouse receipt system operator, we even have the warehouse receipt system and collateral administration that offers the market confidence.

5 years into doing enterprise, and constructing the ancillary infrastructure essential to help commerce and handle danger within the sector, we at the moment are centered on providing up our infrastructure as a service to varied gamers and enabling the bigger capital market to faucet into the actions within the commodities market with ease. Basically, we’re constructing a technology-driven capital market infrastructure, which can unlock different funding capital to finance tradable low-risk agriculture and different commodity sorts.

Why is AFEX specializing in agric commodities?

We started our operations with agriculture commodities as a result of it’s an enormous and essential downside. Farmers stay in a vicious poverty cycle primarily as a result of they’re financially excluded. They continue to be minimize off from the formal financial system, and nearly all their property exist in money or close to money. This prevents wealth creation, particularly, in an inflationary financial system, and ends in the continued actuality of smallholder farmers, who produce over 90 per cent of meals in Africa, remaining the poorest and most under-served group in Africa’s financial system. The commodity change mannequin supplies the infrastructure for fairer and extra clear commerce by providing up its platform as a shared useful resource for key teams of individuals to take part in. When a clear and honest market system that determines what the true worth of commodities are, which basically covers the function of a commodities change, it helps to advertise investments, it helps with transparency, and it helps with an equitable distribution of worth throughout the system. We, nevertheless, absolutely intend to develop to different commodity worth chains keeping track of the place we are able to have probably the most affect alongside the creation of worth for all our stakeholders.

What commodities is your focus and why did you select them?

We give attention to Maize, Sorghum, Soybean, Paddy Rice, Cocoa and Ginger.

What has been the affect of AFEX on farmers’ profitability?

In AFEX’s expertise working with farmers throughout the nation over the previous 5 years, when a farmer can entry loans and a bundle of services and products (farm enter, schooling, micro-insurance, storage as a service and many others), he will increase his revenue by 400 per cent over three years, reaching over $2,000 in financial savings. When a farmer will get skilled on the fitting agronomic practices, and has entry to credit score for 2 consecutive seasons, their yield will increase by as much as 100 per cent, and their home maintain financial savings will increase by about 200 per cent after masking baseline prices. By the third 12 months, they’ve sufficient money to purchase or lease a second plot. They domesticate their major plot with their financial savings after which plant the brand new subject primarily based on proceeds from the loans. By the third harvest, their financial savings sometimes enhance by over 400 per cent.

What number of Nigerian farmers have up to now benefited from this your Commodities Change Market?

We’ve got 113,000 farmers immediately and over 200,000 farmers not directly.

With the rise in meals costs, what do farmers stand to achieve out of your commodities change market?

Our worth proposition to farmers has at all times been two-fold: entry to finance and entry to markets, that are two large issues that smallholder farmers in Nigeria have traditionally been unable to surmount. By partaking with the Change, farmers will have the ability to achieve entry to finance in type of inputs like fertilizers, seeds, and crop safety merchandise whereas additionally being enabled to entry help by way of extension companies that impart information on good agronomic companies.

On the finish of the season, the farmers also can entry bigger markets by the Change as their merchandise will be aggregated with that of different smallholder farmers and furnish the orders of Change shoppers on the processor aspect. This course of is a clear one the place farmers can get info on costs and decide for themselves when to promote contemplating that our storage infrastructure additionally permits the farmer to retailer their produce in AFEX warehouses which have sure high quality parameters that make sure that the grains retain their worth.

What do you suppose the federal government ought to do to cut back meals costs?

Agriculture planning is at all times within the mid to long run, and lowering meals costs is a matter of making certain that our provide is ready to meet up with the demand for meals. We’ve got at all times advocated for a data-led technique that may allow us to trace these early. Information must be out there and immediately it’s not out there at a scale that we’d like as a rustic. When it’s, policymakers will want to have the ability to then make knowledgeable selections round it, and so we’d like a data-strategy for agriculture in place which can allow satisfactory planning each for coverage on the authorities stage and advocacy and execution for lively gamers within the sector. We additionally have to amplify dry season farming to make sure that we’re increasing our crop output. CBN is already driving this, however extra stakeholders should be concerned.

How have your warehouses impacted in tackling post-harvest losses?

We’ve got about 45 warehouses throughout 15 states within the nation and these warehouses are open and supply storage as a service for the farmers that means that as a substitute of a farmer to hire warehouses or preserve his grains in his home, the place he’ll lose 20 – 30 per cent of the amount over time, you will have a state of affairs the place you may deliver it right into a warehouse and he will pay for the three luggage he’s storing for 3 months and he shops it. So, it’s saved as a service after which takes off the burden and the danger of storage off the farmer.

What’s your sustainability plan in retaining your relationship with farmer teams, cooperatives, and communities?

We’re staying centered on farmer engagement; utilizing our outreach construction to get extra farmers to make the most of the Change’s choices from enter financing to storage and grading companies. We don’t see our relationship with the farmers as transactional we see it as a neighborhood we’re constructing, and so belief is central to that system, however so is making certain that they see a lot wanted worth within the bundle of companies that we’re offering for them and are in a position to document progress year-on-year.

With the affect of the present financial recession that has occasioned hyperinflation, do you will have plans to cushion the results on farmers underneath your purview by way of farm enter and transportation of their produce?

We have already got a course of in place through our outreach construction, which allowed us to profile farmers and embrace them in our methods after which we disbursed loans in type of inputs and actively supplied help for them by the manufacturing cycle as much as harvest after we at the moment are triggering our compensation buildings, but in addition enabling the farmers to get entry to a marketplace for their leftover commodities.

Vanguard News Nigeria

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