The Food Security Fund (FSF) was recently launched by AFEX, one of Nigeria’s commodities market players. The fund, to the value of $100 million, will for the next decade support the financing of 250 000 hectares of land for both commercial-scale and small-scale farmers.
The states of Kano, Ogun, Cross River, the FCT and Kaduna will be covered by the fund.
“The launch of The Food Security Fund is another really important milestone as we chart our journey building the physical and technology-enabled infrastructure for the continent’s commodity sector,” said Ayodeji Balogun, CEO at AFEX, via a statement.
“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.”
Fund will impact other countries too
While the main focus of the fund is to boost food security in Nigeria, it will also have an additional impact across other countries such as Rwanda, Uganda, Tanzania, Côte d’Ivoire and Ghana. The FSF will also focus on exploring and optimising climate smart solutions and high yield agronomy protocols in order to ensure that more food is produced and land is managed efficiently.
Restricted output has resulted in a 300 000 tonne gap in seed demand and a 10 million tonne shortfall in grain demand, as well as higher food import costs and lower capacity utilisation of processing factories.
AFEX believes it is well-positioned handle the fund, having worked with capital markets players to issue loan instruments for over 200 000 smallholder farmers to date.