The private sector if well engaged could be a powerful force in the global fight against malnutrition| February 1, 2017 12:49 am
In a number of African countries, annual costs from the consequences of child undernourishment, can amount to as much as 17% of national GDP. Insufficient energy intake, along with vitamin and mineral deficiencies, lead to conditions such as underweight, stunted growth, and anaemia, making severe malnutrition one of the largest culprits in terms of child deaths. Those children who do live often carry these conditions into adulthood, continuing to suffer from consequences that are then frequently passed onto the next generation. But the consequences are far-reaching: prevalent undernutrition puts extreme strain on public health systems and significantly reduces individuals’ cognitive and physical capacity to learn and work. Such conditions are associated with poorer educational outcomes and lower productivity and incomes relative to non-affected populations, making it increasingly difficult to break the vicious cycle. While major progress has been made in the fight against malnutrition, there is still a strong need to innovate and scale up successful programmes, especially to achieve the sustainable development goals (SDGs) of ending global malnutrition by 2030.
Bottom of the pyramid (BoP) populations are both the most vulnerable to malnutrition and the hardest to reach. Despite this, they represent an enormous market: estimated at $429 billion annually, the BoP is the dominant consumer market of the Africa region by both size and collective purchasing power. Over half of BoP household spending goes into food, however, large knowledge gaps, misinformation, and unclear or missing labelling often lead to consumption of less nutritious foods. Poor access to and availability of product quantities at an affordable price point further prevent BoP consumers from purchasing nutritious products, although they are both able and ready to pay more for the nutritious products they value.
Despite alarming losses from malnutrition and the large potential benefit from serving the BoP market, several countries have yet to capitalize on a key resource: the private sector. With among the highest rates of malnutrition in the world, West African nations have made significant progress relative to other African sub-regions in reducing the number of undernourished citizen in the past 25 years. However, governments, civil society organisations and donors have driven this action against malnutrition and most national nutrition policies include few provisions for private sector engagement. As such, business engagement in nutrition is nascent and largely limited to large-scale, mandatory fortification and a few specially targeted foods.
Innovative BoP-inclusive business models for nutrition in the private sector are relatively unknown as there are several challenges preventing the private sector from engaging in the scale up of nutrition. Such challenges are on both sides of the public-private sectors, and will require simultaneous attention. On the one hand, the private sector lacks knowledge on how to engage and suffers from a ‘what’s in it for us?’ type of mentality. The development of a clear business case is further discouraged by a lack of incentives such as risk sharing, tax exemptions or government subsidies. Moreover, Micro, Small and Medium Enterprises (MSMEs), who primarily make up the private sector, are further constrained by high costs of nutritional value addition, transport and capacity building that drive-up prices, which alongside supply and quality constraints make it difficult to be competitive and sustainable. On the other hand, most governments have a limited history of Public Private Partnerships (PPPs) in nutrition, and as they start to recognise the great potential of private sector collaboration in the fight against malnutrition, they are asking how they should best engage with the private sector, and what concrete areas for collaboration might exist.
The private sector has already shown its ability to be innovative and solve problems in other critical areas of development such as ICT and Health. Best practices from this can inspire innovative cross-sector collaboration and engagement in the scale up of nutrition. For example, the Cola Life partnership distributes medicine along Coca Cola’s rural distribution routes and leverages the private sector’s ability to innovate and improve health outcomes, and M-Diabetes of the “Be Healthy Be Mobile” public private partnership in Senegalese mobile services to distribute information on non-communicable diseases and raise awareness among the population. The nutritional sector has equal potential for similar public private collaborations that leverage the technical skills and resources of the private sector, boost local business and ultimately enable a steady supply of safe nutritious foods. Although challenging, some promising examples exist of multinational companies that attempt to design BoP solutions in food and nutrition. While still nascent, these include e.g. Cargill, Hershey’s and Ajinomoto who seek to partner and collaborate with local entrepreneurs, governments, impact investors, donors and NGO’s to develop nutritious products and strengthen MSME capacity to ensure steady and quality supply.
To address many of these challenges, there is a strong need across governments to drive a responsible business-inclusive nutritional agenda where the private sector is invited to the table to co-develop policy and implementation roadmaps. The development of country platforms where public and private stakeholders can convene and co-create will enable a common understanding across sectors, and a first step towards creating a more enabling climate for public-private collaboration. Particularly, the private sector can be brought on board to co-determine areas of collaboration and identify critical policy and regulatory bottlenecks. Moreover, to generate the necessary incentives for private sector engagement it is crucial to develop and publicise business cases for investments in nutrition, e.g. through national investment promotion centres and to facilitate finance e.g. through impact investing. Additional ways for the private sector to engage in nutrition include: leveraging existing infrastructure of government programmes to distribute products e.g. national school feeding and social security programmes; seeking supply agreements with UN procurement and government agencies to ensure steady demand; making investments in new business models and products through CSR or as core business; strengthening supply chains through local capacity building and developing quality guidelines for MSMEs; or making investments in advertisement and publicity campaigns to educate and ensure consumer awareness .
With nutrition high up on global agendas and West African governments increasingly recognizing the potential for private sector collaboration, now is the time to act and leverage momentum. Through its capacity to innovate and achieve scale, the private sector can be a strong asset in the region’s efforts to scale up successful programmes, improve nutrition and end hunger. However, it is critical that the private sector is engaged responsibly to avoid unfair competition and spread of quasi/non-nutritious products. The Scale up Nutrition Business Network (SBN) is an example of a novel solution to the problem. It is a unique platform that provides the tools to build awareness of the importance of nutrition in the business community and engage with companies to advance nutrition; a promising step towards responsible private sector engagement and a demonstration of the type of initiatives needed to scale up nutrition in West Africa and beyond. To date, twelve countries within the SUN Movement have launched or are building national business networks, including Nigeria and Cameroon in the West and Central Africa. This presents an opportunity to explore and build a regional Scaling up Nutrition Business Network support mechanism to further leverage insights and catalyse impact across countries, sectors and activities. Increased private sector engagement in nutrition would be a win-win situation for the private sector companies, the BoP populations most at need, and the national economies that would benefit from reduced costs of problems arising from malnourishment.
Kathrine Madsen is a consultant in the Dalberg Dakar office. Dalberg Advisors is a leading global strategy consulting firm focusing on development issues.