Accra/Addis Ababa – A recent report from the Food and Agriculture Organization of the United Nations (FAO), the United Nations Economic Commission for Africa (ECA), the World Food Programme (WFP), and the African Union Commission (AUC) sheds light on the significant disparity between the current levels of public and private funding for agriculture and the financing required to enhance Africa’s agrifood systems. The report highlights a persistently rising trend in hunger and food insecurity on the continent, emphasizing the critical need for improved and sustained financial investments.
The latest Africa Regional Overview of Food Security and Nutrition indicates that government expenditure on agriculture, forestry, and fishing in Africa has generally increased since 2018. While this growth is encouraging, it still falls short of the targets required to eradicate hunger and transform agrifood systems, especially amid ongoing fiscal challenges in many nations.
External financing, including official development assistance, saw a modest rise during this period, with less than 27 percent allocated specifically for food security and nutrition.
Alarmingly, private investment remains low. Bank lending to the agricultural sector accounts for less than four percent of total credit, and foreign direct investment (FDI) in food and agriculture is both concentrated and significantly below potential, with annual flows often not exceeding USD 2 billion.
Small and medium-sized agricultural enterprises often struggle to secure funding, as they are too large for microfinance options yet too small for traditional banking solutions.
Unlocking new sources of finance
To catalyze meaningful progress, the report advocates for a robust policy and institutional framework that fosters public-private partnerships and mitigates risks associated with agrifood investments. It presents a roadmap that includes improving access to affordable credit, enhancing the capabilities of small and medium-sized enterprises, and integrating climate finance with blended financial solutions.
“Financing for agrifood system transformation in Africa should provide the financial resources that contribute to the eradication of hunger, food insecurity, and malnutrition in all its forms,” stated the heads of the four cooperating institutions: FAO Assistant Director-General Abebe Haile-Gabriel; ECA’s Deputy Executive Secretary and Chief Economist Hanan Morsy; African Union Commissioner H.E. Moses Vilakati; and WFP Assistant Executive Director Rania Dagash Kamara. “These findings emphasize the urgent need for increased financing to sustainably transform agrifood systems across Africa.”
Hunger on the rise in Africa
For the eighth consecutive year, hunger has risen in Africa. The report estimates that around 306 million people are undernourished on the continent, accounting for more than 45 percent of the global total. Additionally, 892 million individuals are facing moderate to severe food insecurity, a situation exacerbated by conflict, climate disruptions, economic downturns, and escalating social inequalities.
The average cost of a healthy diet in Africa now stands at USD 4.41 purchasing power parity (PPP) dollars per person per day, marking a 5.5 percent increase since 2023. This figure exceeds the extreme poverty threshold of 2.15 PPP dollars per person per day, indicating that a significant number of individuals classified as non-poor also cannot afford a nutritious diet. Shockingly, 67 percent of Africa’s population could not afford a healthy diet in 2024, compared to about 32 percent globally.
Stunting among children under five years old in Africa was reported at over 30 percent in 2024, despite some improvements. In contrast, wasting among the same age group was at 5.4 percent, below the global average of 6.8 percent.
Recommendations for action
Enhanced and more strategically directed financing must be paired with bold policy reforms, innovative financial instruments, and a collective effort to ensure inclusivity, particularly for women, youth, and smallholder farmers, as highlighted in the report.
Among the opportunities identified is the strategic application of blended finance. From 2020 to 2023, Africa recorded 99 blended finance deals within the agrifood sector, amounting to USD 3 billion. However, many of these agreements primarily benefited large companies, leaving smaller, more nutrition-sensitive enterprises struggling to obtain capital.
The report also emphasizes climate finance as an underutilized resource. In 2021/2022, Africa received USD 44 billion in climate finance, a 48 percent increase from two years earlier, yet this figure is still well below the USD 250 billion annual target required to meet the continent’s climate objectives. Aligning climate finance with food system transformations through innovative financial mechanisms and scalable partnerships will be vital for building resilience.
The findings stress that reversing trends in food insecurity and achieving nutritional targets will demand a significant increase in financing from all sources, including public, private, domestic, and international avenues. The report urges governments and development partners to work together in coordinating investments, prioritizing inclusive and sustainable policies, and bolstering Africa’s agrifood systems as sources of growth, health, and resilience.
Importantly, the report highlights the role of key continental frameworks, such as the African Union’s Comprehensive Africa Agriculture Development Programme (CAADP) and the African Continental Free Trade Area (AfCFTA), in creating a supportive environment for financial flows.
Key Takeaways
- A significant increase in funding is urgently needed to transform agrifood systems and eliminate hunger and malnutrition.
- Africa continues to face worsening hunger and food security, falling behind targets set by SDG 2 (Zero Hunger) and CAADP.
- The focus must be on maximizing existing investments, increasing public funding, and tapping into the private sector’s potential.
Facts & figures
- In 2024, over 306 million people in Africa were undernourished, an increase of approximately 10 million from 2023 and 73 million since the COVID-19 pandemic, accounting for over 45 percent of the global total.
- The Prevalence of Undernourishment (PoU) in Africa was 20.2 percent in 2024, with nearly 59 percent of the population facing moderate or severe food insecurity, double the global average.
- All subregions in Africa witnessed a decline in food security.
- Women in Africa are slightly more affected by moderate or severe food insecurity than men, with rates of 58.2 percent and 57.1 percent, respectively.
- The prevalence of stunting among children under five was over 30 percent in Africa, with wasting at 5.4 percent.
- The average cost of a healthy diet in Africa reached 4.41 PPP dollars per person per day in 2024, a 5.5 percent increase from 2023.
- Over 1 billion people in Africa could not afford a healthy diet in 2024, marking an increase of over 29 million from 2023.
FAQ
What is the current state of hunger in Africa?
Hunger has increased for the eighth consecutive year in Africa, with approximately 306 million people undernourished as of 2024.
How is financing impacting agrifood systems?
The report emphasizes a significant gap in both public and private financing needed to transform agrifood systems and address hunger.
What are the recommendations for improving food security?
Governments and development partners should enhance financing, implement bold policy reforms, and prioritize inclusivity to foster sustainable agrifood systems.
