In Nigeria, 56% of total household expenditure in 2019 went on food. Indeed, the food economy is the largest economic sector in West Africa. It is also a major provider of jobs. In urban areas, one out of three people work in food economy jobs, the majority of which are in marketing and food-away-from-home. These jobs, many of which are held by women and youth, include vendors in small shops and street markets and hawkers selling street food.
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These are central to the urban food marketing system, providing the bulk of the urban food supply. In particular, poor urban households are dependent on these distribution networks, often purchasing small quantities on a daily basis and relying on street food vendors because of the high costs of preparing one’s own food and the lack of facilities to prepare and store food at home. Food-away-from-home represented 25% of food expenditure in urban areas in Nigeria in 2019.
Farm operations, mainly in rural areas, may be spared the worst as the majority of farmers are smallholders that rely heavily on family labour. However, for medium and large holdings, labour shortages may result as a knock-on effect of the virus.
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There is also the risk that the pandemic could decrease consumer demand, due to loss of income, and increase food waste due to limited food storage capacities. Additionally, governments may decrease subsidies or the distribution of inputs as they shift resources towards mitigating the impacts of the virus.
The reality for off-farm sectors is immediate. Mobility restrictions imposed by governments to stop the spread of the pandemic have more direct effects on the thousands of Micro Small Medium Enterprises (MSMEs) in food supply chains.
These MSMEs are mostly informal. The informal sector represents 80%-90% of the economy in West Africa, with employees lacking formal registration and safety nets such as unemployment insurance.
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The COVID-19 crisis highlights the interconnectedness and vulnerability of societies and systems at the global level but also of activities perceived as more ordinary, like getting food from farm to table. Strengthening the resilience of food systems in Africa should be a priority.
ICTs in food systems
Revolutionising the use of information and communications technologies (ICTs) in food systems could help mitigate the risks generated by crises such as COVID-19. Start-ups such as WeFly Agri, AgriPredict or INVESTIV that promote the use of drone technology or self-driving tractors, are good examples of how ICTs can be used in food systems to help farmers.
Information services that help minimise the negative effects of a crisis by, for example, telling farmers how to protect crop spoiling, could in the short term, help producers limit food losses when they lack food storage facilities.
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Connecting the various actors in the agricultural value chain through digital marketplaces such as Farmcrowdy would ensure the management of supplies from small family farmers, the management of stocks and the marketing of agricultural products and their transport.
Increased digitalisation and online banking could help speed up payments and facilitate transactions in a region with low banking penetration, and spur investments by supermarkets and fast food chains in home delivery services.
For street vendors, and MSMEs in the food economy, the struggle with current COVID-19 restrictions is very real. Most of them have or will cease their activities and for those able to continue, a decrease in demand will severely hit their revenues.
The food economy will continue to be the leading economic engine in West Africa, but only if we design smart strategies to revive the sector after the crisis.
West African governments have launched safety net programmes to support people suffering from loss of activity. However, existing social protection coverage in West Africa is very low (4% in Burkina Faso, 14% in Liberia, 6% in Nigeria). Because social protection systems were not in place before the crisis, the ongoing responses are not well organised and the most vulnerable people are not reached.
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Social protection systems – especially those put in place before a crisis hits – increase resilience and allow societies to cope with emergencies in the immediate term and to mitigate the long-term impacts. Effective fiscal policies, and incentives to encourage the formal registration of MSMEs in the food economy are key to achieving this objective.
Leave no-one behind: data and partnerships
Social protection policies and the provision of ICT services are only effective when they target the needs of their beneficiaries. However, data gaps in many sectors including agriculture are widespread and have left governments across Africa guessing about how to design public policies.
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More and better data are needed across the entire food system, particularly in the off-farm sector. The thousands of MSMEs that connect and link this $260bn economy are called the “hidden middle” due to the almost complete lack of data and information about them.
Better data is crucial to inform policies that seek to make value chains more inclusive, focusing on vulnerable groups such as youth and women. For this reason, agricultural, household, business and labour force surveys must be conducted regularly and question banks must be updated continuously to incorporate the trends and evolutions observed in food systems.
Administrative data and the use of big data also matter. Partnerships between chambers of commerce, co-operatives, traders’ associations and local governments are crucial for creating dialogue platforms that monitor and determine how best to handle the common challenges faced by actors in the food system.
Bottom line: This health crisis will leave its mark on the economy but it can be seen as an opportunity for food systems to improve their resilience and risk management. The food economy will continue to be the leading economic engine in West Africa, but only if we design smart strategies to revive the sector after the crisis.
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