Can Markets Work For Nutrition? Lessons From Nigeria
Nigeria's economy has raced to become the largest in Africa. But the country is also ahead on a tragic statistic: it has the highest rates of stunting in Africa, meaning children suffering because they don't get the nutrients they need to be healthy. Indeed, malnutrition is estimated to kill 350,000 children each year.
Today, more players than ever are trying to steer the country away from undernutrition. Nigeria’s federal government joined the global Scaling Up Nutrition movement in 2012. Meanwhile, organisations such as the Global Alliance for Improved Nutrition are making the case to Nigeria's burgeoning private sector. Large partnerships are going for national impact - like a decade of fortifying basic foods like wheat flour and vegetable oil with key vitamins and minerals.
Yet despite these efforts, Nigeria's food systems are failing the poor. Research by Sahel Capital and IDS in several cities found there were no complementary food products with enough nutrients at an affordable price. Poor people are left to water down the products they feed to children 6-24 months or rely on foods that lack the nutrients children need. The result can be a lifetime of ill health.
Can businesses tackle the nutrition problem on their own?
Why aren't nutrient-rich products affordable to the poor? Lots of Nigerian food companies produce porridges, pounded yam mixes and custards. Indeed, case studies identified companies that made products fortified with micronutrients. The problem is that companies can't make them – and deliver them – at a price affordable to poor people.
Why not? Because reaching poor consumers entails high costs for companies; shipping products to urban slums and rural areas is expensive and requires building new distribution chains. Meanwhile, convincing consumers that products are nutritious is also expensive, especially since Nigerian consumers tend to be suspicious of claims on food labels. (There are lots of fakes on the market.) Businesses struggle to overcome these problems on their own.
How can policy get around market problems?
Yet, although the problems are daunting, Nigeria’s experience provides important lessons about what can be done. The Federal government, State governments, donors and NGOs have backed strategies to encourage businesses to make nutritious foods and to bring them to the people who need them.
Though not all strategies have been successful, the lessons are clear: the most successful programmes worked because they specifically avoided some of the big constraints on businesses. Rather than trying to resolve systemic problems like poor regulation or bad infrastructure – which would require huge resources and major reforms, successful efforts found ways to work around these problems. Here are some examples:
Using non-profit distribution to reach the most vulnerable people
One of the most effective ways to encourage businesses to produce nutrient-rich products – and to make sure they reached the most vulnerable people – has been for government or non-profit agencies to buy products and distribute them.
By taking on distribution, public agencies can cover the high costs of delivering to poor people, while also eliminating the problems of convincing consumers to pay for nutrition. They can also guarantee the quality of the product. These systems have suited those businesses that have participated; they provide a secure source of demand and allow the business to focus on product development and manufacturing.
Bringing companies on board for fortification
Other strategies can also side step the key problems. For instance, laws requiring all manufacturers to add vitamins and minerals to products like wheat flour mean companies don’t have to compete with each other on fortification. Instead, the government makes all players to pay the costs.
A key benefit of this approach is that consumers don’t even have to know that products are nutritionally-enhanced, since they already eat these foods anyway.
But fortification also faces major challenges. A recent survey showed that, despite a decade of support, regulatory agencies haven’t been able to crack down on companies that break the law. Only about a third of products contained the amount of nutrients required. The Nigerian experience highlights just how daunting it is for relatively weak institutions to regulate large industry.
What can we learn about making markets work for nutrition?
With our partners in Nigeria, we are focusing on the big problems and what strategies government, businesses and partnerships can use to address them.
Nigeria is unique. In addition to the largest population and the biggest economy, the country has a private sector with unparalleled levels of dynamism and complexity, while its layers of public institutions face corruption on a staggering scale.
Yet other countries have much to learn from Nigeria, as do development partners and others looking to work with business on food and nutrition. Our research examines what partnerships and approaches have worked and why - looking at approaches from distributing to the most vulnerable people to aligning agricultural policies behind nutrition.
The big message is that public-private partnerships need to be a lot more specific about which business problems they want to address, and how, if they hope to improve nutrition for the poorest people. In the coming months, we’ll be sharing our findings and inviting those across the sector to share their experiences. In the meantime, please read about our key findings and share your perspectives below.
This blog was previously published on Globalisation and Development and is reproduced with permission.
Dedicated to the memory of Professor Isaac O. Akinyele, a leader in the field of nutrition, and co-author of research mentioned in this post.