Financial and Technical Assistance Helps Vital African Food Businesses Weather COVID-19 Pandemic
Support from Visa Foundation and the Coalition for Farmer-Allied Intermediaries helped food processors in Ethiopia, Kenya, Tanzania, and Zambia weather the crisis
Nairobi, Kenya (June 1, 2022) –TechnoServe, the United States African Development Foundation (USADF), and Partners in Food Solutions announced today the results of an initiative, with funding provided by Visa Foundation, to help African food businesses navigate the COVID-19 pandemic. By delivering resiliency grants and technical assistance to eight small and medium-sized food processors, the initiative helped support stable markets for more than 1,500 farmers (of whom approximately 45% are women), contributed to maintaining 300 jobs and creating new employment opportunities for nearly 100 workers (of whom 55% are women), and supported the production of nearly 2,000 MT of nutritious foods for local consumers.
Food processors manufacturing essential products like flour, milk and yogurt, and therapeutic foods are vital links in the center of value chains, purchasing crops from smallholder farmers and producing nutritious, safe, and affordable food for consumers. Even before COVID-19, however, small and medium-sized African food processors faced numerous obstacles to growth, and the pandemic threatened the survival of these businesses, with dire consequences for their consumers, suppliers, and workers.
In response to this crisis, organizations working with more than 600 African food companies joined together to launch the Coalition for Farmer-Allied Intermediaries (CFAI). The Coalition’s mission is to catalyze a movement around vital small and medium-sized agro-food businesses in order to transform and build more resilient African food systems. In support of CFAI, Visa Foundation provided resiliency grants to eight Ethiopian, Kenyan, Tanzanian, and Zambian food companies in 2021. Leveraging the Alliance for Inclusive and Nutritious Food Processing, part of USAID’s Feed the Future initiative, CFAI members TechnoServe, Partners in Food Solutions, and USADF provided technical assistance to the eight food companies.
This financial and technical support helped the businesses overcome some of the most significant challenges they faced, including disruptions to their markets and sales channels, scarcity of raw materials and rising sourcing costs, adapting manufacturing operations to keep their employees safe during the pandemic, and a lack of sufficient capital to pay workers and suppliers on time. Resiliency grants and technical assistance helped the businesses address these immediate needs and adapt their operations to the changing market conditions.
As a result, the eight food processors were able to increase their annual sales by 70% (from $2 million to $3.4 million), retain and expand their workforce by 15% (86 new jobs, 55% women), purchase 480 MT of crops grown by 1,500 smallholder farmers through on-time payments totaling nearly $240,000, and increase production of nutritious food by 75% (2,370 to 4,180 MT) in 2021.
Without this support, “We would have greatly struggled in maintaining operations and staffing since the cash flow was much affected,” said James Muturi, the founder of Delish & Nutri, a Kenyan company that manufactures peanut powder as an affordable source of protein for low-income consumers. The firm was squeezed by disruptions to its supply chain, which caused a 40% increase in the cost of raw peanuts.
With support from Visa Foundation, Delish & Nutri received a $28,000 grant from CFAI and technical support from TechnoServe, Partners in Food Solutions, and USADF focused on record keeping, grant management, quality control, marketing, and developing an inclusive sourcing strategy. As a result, Delish & Nutri was able to weather the crisis, purchase 19 MT of peanuts from smallholder farmers, and look to the future with optimism. “We now have adequate stocks to process current orders, and the farmers we have purchased from are happy due to timely payments and significant quantities purchased,” said Muturi.
Profiles of the eight companies, the support they received, and the impact of this support can be accessed at: https://www.technoserve.org/resources/helping-african-food-businesses-recover-from-the-covid-19-pandemic/
Founded in 1968, TechnoServe is a leader in harnessing the power of the private sector to help people lift themselves out of poverty for good. A non-profit organization working in 30 countries, we work with people to build a better future through regenerative farms, businesses, and markets that increase incomes. Our vision is a sustainable world where all people in low-income communities have the opportunity to prosper.
USADF is the U.S. government’s independent African enterprise development agency. The agency invests in African grassroots and small- and medium-sized businesses, promotes local economic development, and creates pathways to prosperity for underserved communities. Utilizing a community-led development approach, USADF provides seed capital and local project management assistance to early-stage African enterprises and entrepreneurs addressing Africa’s biggest challenges around food insecurity, insufficient energy access, and unemployment, particularly among women and youth. To learn more, please visit www.usadf.gov or email Comms1@usadf.gov.
About Partners in Food Solutions
Partners in Food Solutions, a consortium of leading global food companies – General Mills, Cargill, DSM, Bühler, The Hershey Company, Ardent Mills and The J.M. Smucker Company – is working to strengthen food security, improve nutrition and increase economic development across Africa by expanding and increasing the competitiveness of the food processing sector. We link corporate volunteers from our world-class corporate partners, who share their expertise with promising entrepreneurs in eleven African countries.