Investing in Postwar Yemen Means Investing in Nutrition Now

Kenyan worker checks the mixing tank on a RUTF production line at Insta Products in Nairobi, Kenya. © Russell Watkins/DFID

Since the outbreak of civil war in Yemen in 2015, malnutrition in the Middle Eastern country has reached critical—and unprecedented—levels. According to UNICEF, the United Nations program that provides humanitarian and developmental assistance to children and mothers in developing countries, nearly half a million Yemeni youth are now suffering from malnutrition and another 2.2 million people require urgent care.

Because severe acute malnutrition has quickly become one of the most common causes of death for children across Yemen, there is an urgent need for therapeutic food that could help save these young lives.

Across the Gulf of Aden, in Africa, a factory on the outskirts of Nairobi called Insta Products produces ready-to-use therapeutic food (RUTF), a high-calorie fortified peanut-based food product. Insta sells these sachets to relief organizations, including UNICEF, which distribute RUTF in conflict-affected areas and other emergency zones, particularly across the East African region and Yemen.

In 2016, IFC invested $7 million in Insta Products—currently the only manufacturer of RUTF in East Africa, and a top five supplier to UNICEF globally. The investment aimed to help the company expand its RUTF capacity and more than double its sales on the back of an increased supply. Half of the loan was contributed by IFC and the other half through the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP), which IFC manages. That in turn will be supported by an additional $4 million loan from Danish government fund IFU. This investment will help support timely delivery of 310,000 additional cartons of RUTF and help treat 300,000 more people from acute malnutrition.


Breaking the Cycle of Poverty—through Better Nutrition

Insta Products’ RUTF is made from a mix of peanut paste, milk powder, sugar, vitamins, and minerals and is packaged in individual sachets that deliver a powerful 500 kilocalories to those suffering from acute malnutrition.

As the company is able to increase production of RUTF, the product will reach more children and help prevent stunted growth and vitamin deficiency. Those harmful effects of malnutrition can inhibit cognitive development and learning capabilities and negatively impact economic productivity into adulthood—reinforcing the cycle of poverty.

That’s why we consider this an investment in “gray matter infrastructure”—building the young brains of children. This is a focus just as important for national and global economic growth as investments in roads, schools, and ports.


Focusing on Nutrition to Build a Nation

Following another GAFSP Private Sector Window nutrition investment in AIFL Rwanda, a fortified cereals manufacturer, the investment in Insta Products represents a significant expansion for GAFSP into offering strategies for better nutrition. Nutrition is fundamental to an individual’s cognitive and physical growth, and is also the cornerstone of all development efforts—improving education, health, income, or equality.

Taking a chance on projects like this—opportunities that other commercial investors have declined—is the mission of GAFSP’s Private Sector Window. GAFSP is a multilateral mechanism that assists in the implementation of pledges made by the global community to support country-led investment plans in agriculture and food security. The program is composed of two windows: the Public Sector Window (administered by the World Bank) and the Private Sector Window (managed by IFC).  The Private Sector Window supports private initiatives to improve productivity and sustainability in agriculture and improve market access and access to finance to the agribusinesses in low-income countries.

As of December 2016, GAFSP’s Private Sector Window funding supported 42 investment projects in agribusiness with a total project size of $1.289 million, deploying $232 million of GAFSP Private Sector Window funding. Every $1 of GAFSP Private Sector Window investment leverages $8 in additional financing.

GAFSP also offers advisory services to build capacity by providing on-the-ground training and advice for businesses and farmers in improving farmer productivity, strengthening standards, reducing risks, and mitigating the effects of climate change. The program is funded by donor partners including Australia, Canada, Japan, Netherlands, United Kingdom, and the United States.

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Published in July 2017


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