The strength of African food systems depend on small food businesses like the AA Nafaka Store Supply Ltd. in Tanzania.
This small, woman-owned business provides consumers with nutritious food like fortified flours, polished rice, and sunflower oil. It also provides a reliable market for smallholder farmers selling their crops.
But like many other small food businesses, AA Nafaka faced hard times in recent years.
A Business’ Success Stopped by COVID-19
Severina Paul Mwakateba founded AA Nafaka in 2012, excited to help raise the incomes of local farmers and increase the supply of high-quality food available to Tanzanian consumers.
In 2019, AA Nafaka made more than $60,000 in sales, with schools making up an important segment of its customer base. The company had the opportunity to expand even further in 2019 as well, as a result of the installation of additional milling equipment. However, the COVID-19 pandemic would confront the company with serious challenges.
With transportation restrictions and school closures in place, the company experienced both product distribution difficulties and the loss of an important part of its market. With the resulting drop in sales, AA Nafaka had to lay off seven of its employees and decrease its purchases from smallholders and aggregators by 60%.
A New Coalition’s Mission Supports Millions
AA Nafaka’s struggles represented deeper challenges for African food systems. Positioned in the critical middle part of the supply chain, small food businesses had trouble securing raw supplies as well as distributing their products to market. This resulted in lost income for smallholder farmers, less access to healthy food for consumers, and financial pain for millions of small food businesses.
(Read more about the impact of COVID-19 on Africa’s food processing sector.)
To fight this crisis, more than 600 African food companies united in a mission to build more resilient African food systems. The Coalition for Farmer-Allied Intermediaries, or CFAI, was born.
In 2021, the Visa Foundation provided resiliency grants to eight African food processing companies. The grant was bolstered by technical support from TechnoServe and Partners in Food Solutions, working through the Alliance for Inclusive and Nutritious Food Processing program, funded by USAID’s Feed the Future initiative.
Through CFAI, the Visa Foundation gave AA Nafaka a resiliency grant of $45,000. Owner Severina was happy to use the crisis funding to purchase raw materials, pay salaries, and provide employees with personal protective equipment to guard against COVID-19.
How TechnoServe Helped a Small Food Business
Meanwhile, TechnoServe’s business advisors worked with AA Nafaka’s managers to help improve the company’s sourcing and marketing strategies. Like many small food businesses, the company needed to shift its approach in order to survive the volatile market conditions.
TechnoServe also helped Severina and her team to develop an inclusive business plan that would enable the company to more affordably purchase its crops. The team also helped the company to improve the utilization rate of its processing facilities and adapt its marketing strategy.
With this support, AA Nafaka was able to persevere through the challenges of the pandemic and even rehire three of its employees who had been laid off. The company was also able to purchase more than $20,000 of crops directly from 112 smallholder farmers–80% of whom were women. And it purchased roughly the same amount from an aggregator that bought directly from smallholder farmers.
A Solution for African Food Systems
Today, AA Nafaka is working to identify partners to help it implement its new business plan, which includes a sourcing model focused on organized farmer groups. This will allow the company not only to boost its profits and sales volumes, but to increase the supply of nutritious, fortified foods available to vulnerable communities and improve the livelihoods of more than 2,000 smallholder farmers.
Small food businesses like AA Nafaka may each be a small part of African food systems–but they play an essential role. Their success–through interventions like this one–ensure that the entire system thrives.
