Ayodeji Balogun, Country Manager, Nigeria of AFEX Commodities Exchange Limited tells SAFIN about the company's history and how it provides finance and technology-based solutions for smallholder farmers.
Can you tell us about AFEX and its history?
In mid-2012, African Exchange Holdings Limited contracted with the Government of Rwanda to establish the first node of the Pan-East Africa Exchange, East Africa Exchange Limited (EAX), which opened in early 2013 whilst the first node of the
Pan-West Africa Exchange, AFEX Commodities Exchange Limited (AFEX Nigeria), was incorporated in February 2014.
AFEX Nigeria is an agricultural, finance and technology-based exchange that is providing solutions to challenges faced by Nigerian smallholder farmers around aggregation, storage, financial inclusion as well as providing a ready market for both farmers and buyers to participate in seamlessly with trust embedded. AFEX Nigeria has reached and enhanced the livelihoods of over 100,000 smallholder farmers and aggregated over 120,000 metric tons of grain since inception. Our inclusive approach supports ancillary infrastructure critical to the development of agriculture at large, and we promote the value of the commodities produced as capital with tradable electronic warehouse receipts by increasing the bargaining power of farmers and linking these communities to agronomic education, access to inputs & credit.
So far, it is safe to say that over the years, there has been notable improvements in AFEX Nigeria such as a more structured operations system, the building out and introduction of the WorkBench and ComX Platforms, which enable people to trade online without worrying about settlements. AFEX now also has a more robust farmer base.
Can you tell us a little bit about yourself and your role in AFEX?
My name is Ayodeji Balogun, I currently serve as the Country Manager for AFEX Nigeria and the Business Lead for Africa Exchange Holdings Limited in West Africa, where I am pioneering the development of a private sector led commodities exchange and warehouse receipt system. I started learning trade and business operations as a teenager in my family business. I grew to manage my family owned commodities trading business and as I got older, I also found a haulage business, was part of a mobile service start-up and also part owner of an agribusiness venture. All these that I got into early on gave me a great appreciation of the potentials of agribusiness and commodity investing.
My core job at AFEX is to build the business across West Africa for the countries that we are keen on – building businesses that provide solutions to barriers that make the smallholder farmers in Africa competitive, and providing solutions to the barriers that make them lack access to agriculture, which makes financing agriculture to be least on the list of sectors that gets financing from the money and capital market.
My job requires me to raise the capital to do this working with my board and management team and build a business that people would love to go to everyday, while ensuring that it will be able to create value, create shared prosperity for all the stakeholders and become a business that will be able to outlive us.
What are the most important recent developments in rural finance in Nigeria?
There’s been a lot of focus on financial inclusion at the core and how to expand the players, with respect to accessibility of finance, to include people in the rural agrarian communities. There’s also been a lot of focus from the government on how to finance primary production understanding that teaching the farmer how to farm in itself does not solve the problem if he does not have the capacity to buy what he needs to improve his production activities. Also, there’s been a shift from a lot of the development finance from a very donor / grant centric capacity development approach to a more market enabled support system that focuses on how you can make the farmer an economic actor and then make him a player in the market system hence providing a more sustainable mechanism for providing support and grants.
Why did AFEX decide to join SAFIN?
We joined SAFIN to gain a trusted network and avenue to share our experience in using our methods to affect the current systems in Nigeria, but also to leverage on other partners to attain our short and long-term goals – in essence, tapping into the network effect of working with other partners to provide financing for smallholder farmers.
How is AFEX contributing to the work of the network?
I am the Chair of the SAFIN Steering Committee. We are working with other players in the space on developing an investment prospectus for three crop value chains; maize, soybeans and cassava; in Nigeria, and will be needing the effort and support of the secretariat. AFEX has also been a co-convener for a number of SAFIN member meetings in Nigeria and participates in the broader content development, which aims to expand the body of knowledge on how to finance smallholder farmers using tools like blended finance, capital market structures, etc. but also bringing these agendas to the fore of the discussions in major Agri-Finance convenings.