AFEX Fair Trade Kenya licensed as the First Private Warehouse Receipt Operator in Kenya

By Phyllis MUCHOKI

AFEX Fair Trade Kenya, a farmer service and supply chain solutions company in Kenya has received a certification for one of its warehouses as a warehouse receipt operator.

The certification marks the first time that a warehouse receipt operator license has been issued to a private-sector company.

Speaking during the visit to the certified warehouse, the Principal Secretary State Department of Trade, Alfred K’ombudo, commended AFEX and said that the government has plans of increasing certified warehouses across the country for the safe storage of farmers’ produce.

“We want to strengthen our Warehouse Receipt System (WRS). This is because it’s key to ensuring that post-harvest losses are greatly reduced and that farmers can rely on well-established and well-managed facilities,” remarked the PS.

This landmark achievement which was done by the Warehouse Receipt System Council (WRSC) at the Soy Mateeny warehouse in Uasin Gishu County, follows several significant milestones that AFEX has recorded since beginning operations in Kenya in 2021.

With 17 warehouses spread across two counties in Kenya, AFEX has registered over 11,000 farmers and traded over 11,000MT of maize. The company also successfully conducted a $1 million input program between March and May of 2022.

The company’s Managing Director, Tabitha Njuguna, indicates that this certification will enable it to do more.

According to Njuguna, “Warehouse receipt systems are fundamental to AFEX’s work in unlocking finance and further strengthening financial inclusion for farmers across Kenya.

The benefits of functional warehouse receipt systems are well documented, especially for farmers. Particularly exciting for us is the ability to improve the livelihoods of farmers who work with us.”

“We look forward to a time when every AFEX warehouse is certified and licensed as a warehouse receipt operator, and we are further enabled to provide services to the market in a way that is transparent and fair. We thank the WRSC for their guidance through this process and look forward to more milestones with the team,” said Njuguna.

The CEO of WRSC, Samwel Ogola, also congratulated the AFEX Fair Trade Kenya team, stating, “The Warehouse Receipt System Council congratulates AFEX Fair Trade Kenya as the first WRS-certified private Warehouse Operator. This certification opens the space for private investment and participation in the Warehouse Receipt System in Kenya.

Last year, AFEX, a Nigerian commodities exchange, and commodities market player announced plans to expand its EAC operations and subsequently launched a $1m loan program that will allow farmers to gain access to seed and fertilizer for their crops, to mitigate ever-rising commodities prices.

Under the program, 5000 Kenyan farmers will be able to take out input loans to access timely inputs and gradually scale their businesses.

With 17 warehouses spread across two counties in Kenya, AFEX has registered over 11,000 farmers and traded over 11,000MT of maize. The company also successfully conducted a $1 million input program between March and May of 2022.

The company’s Managing Director, Tabitha Njuguna, indicates that this certification will enable it to do more. “Warehouse receipt systems are fundamental to AFEX’s work in unlocking finance and further strengthening financial inclusion for farmers across Kenya.

The benefits of functional warehouse receipt systems are well documented, especially for farmers. Particularly exciting for us is the ability to improve the livelihoods of farmers who work with us.” According to Ms. Njuguna.

Launched in July 2020 by Kenya’s Ministry of Agriculture Livestock, Fisheries and Cooperatives (MoALFC), the Warehouse Receipt System (WRS) allows farmers to hold their products in certified warehouses where they can be tested, cleaned, graded, and then stored, with the owners of the commodity receiving a receipt as proof of ownership.

This provides the farmers with the option to sell their produce when prices are favorable, while also serving the purpose of reducing post-harvest losses in the country.

The CEO of WRSC, Samwel Ogola, also congratulated the AFEX Fair Trade Kenya team, stating, “The Warehouse Receipt System Council congratulates AFEX Fair Trade Kenya as the first WRS-certified private Warehouse Operator. This certification opens the space for private investment and participation in the Warehouse Receipt System in Kenya.

Statistics show that rising input costs, shrinking production values, and challenges to land access are some of the factors contributing to the declining farm operator livelihoods in Kenya.

As of November 2021, analysts estimate 7.9 million people in Kenya lacked sufficient food for consumption, which represents 15.4 percent of Kenya’s population.

Nearly nine out of ten Kenyan farmers said their financial situation worsened during the coronavirus pandemic.

According to recent data released by 60 Decibels, Kenyan farmers were being economically squeezed by decreasing demand for their produce and livestock, falling prices, and increasing costs for raw materials and supplies.

The report further found that tough economic pressure on Kenyan farmers may have longer-term impacts – with nearly six out of ten farmers having made unplanned withdrawals from their savings, and over 40 percent recently borrowed money to cover shortfalls in income due to the pandemic, while18 percent of farmers reduced payments on their loans, and 15 percent have sold or pawned assets they own.

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