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Small and medium enterprises (SMEs) in the midstream of agrifood value chains—wholesalers, logistics, and processors—play a critical role to food security and value chain transformation. These enterprises help keep food supplies affordable and stable, provide employment and income for millions of rural and urban workers, and improve food quality and safety for consumers. However, in South Asia, Africa south of the Sahara (SSA), and other developing regions, SMEs often don’t play a role in the food system transformation conversation.

Since October 2020, the eastern Horn of Africa has experienced persistent extreme drought, According to a recent report released by FEWS Net. Extremely dry weather in October-December 2020, March-May 2021, and October-December 2021 has resulted in significantly reduced agricultural and livestock production. For example, in Somalia, the 2021 “Deyr” cereal harvest is expected to be as much as 70 percent below the 10-year average. The region has not experienced three consecutive dry seasons since the 1980s, and the trend has put food security at serious risk.

Africa’s trajectory to emergence and self-sufficiency has seen significant  progress in achieving global and continental milestones such as the Sustainable Development Goals (SDGs) and the Malabo Declaration. However, food security and improved nutrition remain a challenge, and current trends suggest that the continent is not on track to achieve Zero Hunger (SDG 2) by 2030. Evidence suggests that one in five people faced hunger in Africa in 2020 – more than double the proportion of any other region.

The agricultural productivity gap between actual and potential yields in Africa south of the Sahara has been a persistent challenge since the post-World War II independence movement. Despite efforts by governments, international foundations, UN agencies, and private investors, smallholder agricultural production continues to lag behind its potential, and products are often of low and variable quality.

As Ethiopia’s population has become increasingly urbanized over the past decade, more and more households have come to rely on markets, rather than their own farms, for their daily food needs. This dependence means that well-functioning agri-food value chains have become increasingly vital to food security for much of the population.