USAID, through Feed the Future, and the Eleanor Crook Foundation (ECF) have announced their intention to support the establishment of the Nutritious Foods Financing Facility (N3F), a first of its kind investment fund that will bolster these critical SMEs and promote well-nourished communities in Sub-Saharan Africa.
The N3F is an initiative of the Global Alliance for Improved Nutrition (GAIN) and Incofin Investment Management.
Coinciding with the UN Food System Summit convened by Secretary General Antonio Guterres in New York, the announcement forms part of a wider initiative of USAID and ECF with the U.S. International Development Finance Corporation to mobilize at least USD 100 million of financing over five years to tackle the root causes of malnutrition in low- and middle-income countries.
A woman buys some food from a street vendor in Nigeria. © GAIN
"This is highly welcome support for the N3F which helps reach the missing middle of funding for SMEs in Africa, which form the backbone of food systems and deliver most food to consumers" said Lawrence Haddad, GAIN Executive Director, "Unless we can crack this financing deficit, large parts of the food system most important to poor consumers will be locked out of change".
The US statement notes that the N3F aims to directly impact diet quality, while advancing equity by prioritizing women-owned SMEs in its investments, promoting food safety and reducing the environmental impact of the food supply chain.
This is highly welcome support for the N3F which helps reach the missing middle of funding for SMEs in Africa, which form the backbone of food systems and deliver most food to consumers.
A USD 50 Million open-ended debt fund with a blended finance structure, N3F will make senior and junior debt investments across the food value chain, from inputs to retail, with a main focus on processing, distribution, and marketing. Investments will be based on clear nutrition criteria and will also take into consideration gender equity and environmental sustainability
"Following this US leadership, we now hope that interested African and European investment agencies will quickly join the N3F so that it can start operations in early 2022" added Haddad.