TheCable

AFEX, one of Nigeria’s commodity players, has announced a new $100 million 10-year bond to strengthen food security in Africa. 

The company said this in a statement issued on Thursday.

According to the AFEX, the initiative will produce three million metric tonnes (MT) of food annually on the continent.

The statement added the bond “Food Security Fund (FSF) was created to support and ensure sufficient food production and optimise climate-smart innovations. 

Ayodeji Balogun, chief executive officer at AFEX, said the fund will support the financing of smallholder farming.

“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,” he said

Balogun further said that the insufficient availability of warehouses as well as production has caused a decline in demand and created 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,” he added.

“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.”