The Challenge

Nigerian smallholder farmers produce about 90 percent of the country’s food. While they are the nutritional backbone for a population of more than 200 million, many of these farmers face a continuous cycle of poverty and food insecurity. Located in rural and sometimes remote communities, they often lack access to transportation, storage, and market information, forcing them to sell their produce at unfavorable prices in hopes of minimizing post-harvest losses.

The Grant

The Nigerian commodities exchange firm AFEX has endeavored to build infrastructure that helps smallholders overcome these disadvantages. With a $1.65 million co-investment grant from USAID’s West Africa Trade & Investment Hub (Trade Hub) activity, AFEX is establishing a quality enhancement center with a capacity for 100,000 metric tons of grain per year. Along with AFEX’s 30,000 metric ton-capacity warehouses and aggregation centers, the quality enhancement center will provide smallholder farmers with access to quality and quantity checks, packaging, and storage, thus increasing the quality of their produce. The facilities also provide premium market linkages, enabling farmers to connect with buyers via AFEX’s online trading platform, ComX and trade their grain at more favorable prices. In addition to increasing and facilitating international and domestic trade in grain, the partnership provides new private-sector jobs for Nigerian youth and increased incomes for farmers.

The Impact

Initially targeting the rice, maize, and soybean value chains, the project has expanded to include ginger and sorghum producers, as well. To date, AFEX has provided more than $16 million in financing for agricultural inputs to 78,537 farmers in Kaduna, Benue, and Niger states, generated over $25 million in sales of agricultural produce, and created 407 new jobs, with women and youth representing 50 percent of beneficiaries. Toward the goal of improving economic inclusion for smallholders, AFEX launched the electronic payment platform Cudie, named after the word in Hausa for money. The digital wallet integrates rural communities into a network of banks, allowing farmers to securely receive and save their payments in their wallets, thus reducing the inconvenience and costs faced by those outside the formal banking system.