GAIN Working Paper Series 2 - The role of small and medium-sized enterprises in nutritious food supply chains in Africa

Fighting malnutrition in all its forms is one of the major challenges of the 21st century. Addressing it will require an agricultural transformation. Within Africa, this must include a focus on small and medium-size farms, which provide about 80% of total calories in sub-Saharan Africa, as well as other small actors along the value chain.

This paper aims to inform this transformation by helping to illuminate the role and dynamics of SMEs along African food value chains, including production, processing, and retailing.

Differentiating between fruits and vegetables (FV), animal-source foods (ASF), and cereals and legumes, this paper finds that SMEs are important at each stage of the food value chain and for each commodity type. SMEs are responsible for over half of the production of FV, ASF, and cereals and legumes. For processing of these food groups, the picture is more ambiguous and highly dependent on the commodity and type of processing. At the retail stage, however, 70% to 100% of foods are sold through SME channels.

Overall, the data on SMEs in Africa is scarce. However, it is clear that although the shares of ASF and cereals being processed and marketed by large enterprises and modern retailers are increasing, SMEs still play an important role throughout the African food value chain, including production, processing, and retail and particularly for low-income consumers.

Therefore, SMEs should be included in any public- or private-sector efforts to increase the availability, accessibility, and affordability of nutritious foods.