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Scaling business to tackle malnutrition – making progress but policy action needed

Progress has been huge.  Our company, AACE Foods, now sources from over 10,000 farmers and sells 13 products in Nigerian supermarkets and export markets.  It’s a business approach that tackles malnutrition with both farmers and consumers.  But our experience shows how policy is critical too, if such business models are to thrive and the malnutrition crisis is to be tackled.

In Nigeria alone, where 60% of our population works in agriculture, 33% of children under the age of 5 are stunted and 7% are wasted. 4.7 million people in the Northeastern part of Nigeria are currently food insecure and 3.2 million are facing a food crisis.

Last month, , the 2017 Global Nutrition Report – titled Nourishing the SDGs was released, reinforcing what most of us already know – that the world is facing a malnutrition crisis. According to the report, 88% of countries reviewed are confronted with a serious burden of either two or three forms of malnutrition (childhood stunting, anaemia in women of reproductive age and/or overweight in adult women).

Thankfully, from a solutions perspective, the 2017 Global Report identified five core areas that are integral to the SDGs which nutrition can contribute to and also benefit from: sustainable food production, strong systems of infrastructure, health systems, equity and inclusion and peace and stability. The first area – sustainable food production most resonates with me as I strongly believe that unlocking the sustainable and nutritious food production landscape in West Africa is integral to our ability to address our nutrition crisis and will have a ripple effect on other areas of concern.  This is why we founded AACE Foods.

Clearly, if our smallholder farmers, who bear the brunt of poverty and malnutrition, can generate more profitable and nutritious produce, they can feed their families and educate their children. Linked to formal markets and processing channels, they can catalyze employment which will in-turn foster inclusion, peace and stability.

This can only be achieved when “inclusive businesses,” operate along sustainable value chains within the food landscape. This essentially means that the food processing companies, regardless of their sizes, need to transition from a dependency on imported raw materials to building local supply chains which not only provide high quality and competitively priced produce, but also improve the livelihoods of the farmers.

AACE Foods, an indigenous agroprocessing company based in Ogun State, Nigeria, has been working to build such an inclusive business over the past seven years in Nigeria. In partnership with the International Fertilizer Development Centre (IFDC) through the 2Scale Programme, it was able to identify smallholder farmers and encourage them to form clusters to supply the company with a range of herbs, spices and grains for its production needs. AACE provides microfinance and training support to these farmers, and essentially removes the need for a middle-man or aggregator, which in turn ensures more income for both the farmers and AACE Foods. In addition, the direct relationship between AACE Foods and the farmer allows for traceability to each smallholder farmer engaged in the process. To-date, AACE has worked with over 10,000 farmers in five states in Nigeria and currently has 13 products in the supermarkets and has also exported to the Netherlands and the United States. The company produces nutritious food products such as Soya-Maize, Soso Nourish and Beans flour which all fight moderate malnutrition, and AACE partners with nonprofit organizations, government and private companies to distribute these products to families in Internally Displaced Camps (IDPs) in Northern Nigeria.

AACE’s experiences to-date demonstrate the tremendous impact that can be generated if more companies commit to building inclusive businesses; However, it also reinforces the critical role for an enabling environment for inclusive businesses to emerge and thrive. Governments at local and national levels have to provide incentives that ease the cost of local sourcing and backward integration, without compromising quality. For example, just two of the changes that would unleash more business impact include:

  • Incentives, such as waivers on VAT for companies that source at least 60% of their output from local farmers, with clear systems and structures for ensuring traceability and minimizing abuse.
  • National government investment in road and power infrastructure to encourage companies to source from rural communities, and also reduce post-harvest losses.

There is a real need for decisive action from the private and public sectors! The ramifications of our continued inability to address the nutrition crises collaboratively is best articulated by Dr. Akinwumi Adesina, the President of African Development Bank Africa and 2017 World Food Prize Laurate: economic progress is being undermined by hunger, malnutrition and stunting, which costs at least US$25 billion annually in sub-Saharan Africa, and leaves a lasting legacy of loss, pain and ruined potential. Stunted children today lead to stunted economies tomorrow!

 

This blog post is part of the December 2017 edition of the ‘Monthly Theme’ that reflects recent and future developments in inclusive business.

What progress have we made? Where are the missing links? And what needs to change in 2018 in order to increase momentum on inclusive business? Read the full series to see what thought leaders and practitioners think about these questions.

 

Ndidi O. Nwuneli
Ndidi O. Nwuneli
AACE Food Processing & Distribution Ltd. processes, packages and distributes nutritious and tasty food made from the best of West Africa's fruits and vegetables. It product line consists of spices, spreads, sauces and complementary...

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