Reshaping the Landscape — Our Survival Story in 2018

by Ayodeji Balogun, CEO AFEX

6 min readJan 19, 2021

Growth kills most SMEs.

There are too many variables at play, and as entrepreneurs, we typically only see the upside. Every business that grows faster than it can grow its talent pool will fail!

We had to de-grow in 2018. If our cash will give us a decent runway, we needed to cut the fat, and go lean. Our 2018 planning retreat was the introduction of what will happen in that year. We plotted a graph showing revenue per employee since inception. Per capita revenue was falling. Volume throughput per warehouse space was also tanking.

While I was convinced we needed to cut down on cost, I was also convinced that cutting people was not the first answer. But considering that we already ran pretty lean operations, the only option left was going mean.

We shut down about 13 warehouses that weren’t making money. We had to let people go too. In 2018, I sacked over 40 employees. About half of them were just for cost, some of which we have recalled back or are in great places today. The other half had just lost interest in the business and couldn’t stomach all the hardship.

I recall a meeting one day, after the first two lay-offs. I told my managers, we still have a problem, and I don’t know who or what. Who do we need to let go? They were hesitant. I gave everyone a sheet and said, write your top 7. We compared notes, and everyone that appeared on all lists received an email for an exit interview.

Surgeries are draining and painful to the patient as well as the doctor and nurses. But the implications of a delayed surgery may be a lost life. I once read a McKinsey article about the greatest regret of CEOs that were laid off. Top on that list was not sacking employees when they should have. It is hard, but part of our job as CEOs.

Unlocking Nigeria’s Agricultural Potential

Two partnerships helped us through the recovery period. One was with OCP AFRICA — We built a great and high impact project together — #Agribooster and made good friends too. Akin Akinwande and Caleb Usoh were cool guys to work with. Caleb not so cool when you are owing to him money but still a great leader and a hyper-objective business person. Sometimes I feel a part of him was made by Dutch. Akin was the good-cop. Big thinker, super smart, and extremely passionate about the sector.

The second partnership was with the Dangote Group on Rice Project. Dr. Ndidi Nnoli-Edozien is one of my demi-gods in business. She is the type of captain on the deck that you want to have. Super smart, hyper-passionate about impact, amazingly charming when you are lucky to meet that part of her. Ndidi moved mountains for us. Robert Coleman is also another important person to our success with Dangote. Rob means well and has invested so much in the development of Agriculture in this country. He is one of the most experienced commercial farmers we have and has been behind the success of many great Ag corporates.

Iruansi joined us at the beginning of the recovery — April 2018. His stay was brief but impactful. He was part of the cleanup and drove a large part of the turnaround. With his classic glasses-face and curious look, his questions can be probing. He will ask “Why”, and then I will go on with some #MBA sweet talk, and then, like an elder in the mix, he will calmly interject with some common sense thinking.

Shola had just left us. He followed the money and got headhunted by our biggest buyer. I am writing this to make him cringe. Kelechi also left to meet his soul mate in the US. I was missing two Generals, and then Iruansi came on board, sort if God sent. He was our Turnaround Manager. The right temperament and wisdom that was needed. Also, he came with a nonMBA approach to things that was helpful. MBAs are trained to make or to break, but sometimes, you just need to nurture, he did that. He asked deep questions, brought meaningful insights, and also discipline too.

After using our “get out of jail card” with our investors, I knew I had to take fundraising seriously. I had been on many rounds with Jendayi, and also had some tips from my #impactinvesting days. But our business was complicated. People that understood Agriculture didn’t understand nor like the Exchanges, while Capital Market Infrastructure investors had no clue about Agriculture. Here was our business model smacked right in between both sectors. It was a hard sell.

Three of our largest partners wanted to buy us but will just shut down the exchange. One person understood what we were up to, he got the model and could see it.

I had approached Mezuo Nwuneli in 2014, we were fresh out of a PowerPoint at that time. They had also just closed FAFIN managed by Sahel Capital but it was too early for a relationship. We mingled for a bit and started talking seriously again in 2018. Mezuo liked us, and he gave some conditions that we didn’t like at the time, but where our absolute truth — three years later, we would come back to this strategy for the business.

  • Separate AFEX Nigeria’s ownership
  • Have a trading business and an exchange

It was a truth too early to be told. We declined.

A November to Remember

Two important meetings happened in November 2018. One in Nairobi, and the other in Lagos. Jendayi met with the President of Alliance for a Green Revolution in Africa (AGRA) and they discussed how to close a partnership we had been negotiating for a year. Ones Karuho, Ph.D. came to the rescue! He closed Project Mainoma that has now reached over 100,000 farmers in Kaduna State.

The second was with Mobolaji Adeoye of Consonance Investment Managers. Mobolaji and Titi Odunfa Adeoye had called me for a reference check, and we got talking about AFEX. They had also invested in 5th Harvest a major player in the post-harvest space in shea nuts. Then we agreed to have drinks.

Myself, Mobolaji, Jendayi, and my very good friend Ayodeji Adewunmi had been on a deal in Rwanda before, but it was fascinating meeting Mobolaji in person. We talked about Agriculture, his Investment Thesis — Trust Infrastructure, and lots more. I liked him. We had the spark. Essentially, we both knew the space, and he had invested in both Agribusinesses and Capital Market Infrastructure businesses, so it was a natural match.

Today, Mobolaji is our Chairman and an investor in AFEX Commodities Exchange. He is also a good friend.

Watch out for the next part in our next post.

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This is the fifth part of an ongoing series on Building AFEX. Please click other stories in the series if you would like to get the whole view.

AFEX Beginnings — Saying Yes and Other Stories

What’s Important in Year One

Invaluable Lessons You Learn in Entrepreneurship

Our #EndSARS Story — The 2017 Struggle

Know your True North

Big Audacious Goals : Introducing Project Black Elephant




AFEX’s infrastructure and platforms drive capital to build a trust economy in Africa’s commodity markets.