Business Call to Action

View Original

The Business Approach to Accelerating Early Childhood Development

The potential of private capital investments in local businesses to advance the SDGs 

One of the key aspects of Early Childhood Development is proper nutrition, but how can it be combined with an effective, inclusive, and scalable business model? Educate Global Fund (EGF) sought to address this, and in so doing, responded to the SDG Philanthropy Platform call for an “innovative initiative to boost the 4 critical pathways to accelerating ECD in Kenya”. EGF is a private equity fund management company seeking to improve educational outcomes and life chances for children and youth through interventions in health, nutrition, sanitation, energy, and technology. 

Why Invest in Nutrition and Early Childhood Development in Kenya?
“Investment in Nutrition is an investment in “grey matter infrastructure” – the young brains of children. It will ultimately be as important for national and global economic growth, as is investing in roads, schools and ports," said the Global Agriculture & Food Security Program (GAFSP). In general, poor nutrition has been seen to cause the following: a seven-month delay in starting school[1], a 0.7-grade loss in schooling[2], and a 10-17 percent reduction in lifetime earnings – damaging future human capital and causing national GDP losses estimated at 2-3 percent[3]. Furthermore, children in early childhood may lose at least 10 IQ points and suffer a severe impact on their cognitive development because they do not receive the right nutrients and care in first 1000 days of their life[4]. Adequate nutrition, however, can counter these problems and result in better performance for children in school[5] and reductions in school dropout rates[6]. Furthermore, it leads to improvements in cognitive, motor and socio-emotional development[7] in early childhood.

In Kenya, an estimated 1.86 million children under 5 years are stunted (low-height-for-age), 340,000 are wasted (low weight-for-age) and 160,000 are underweight. In East Africa, the number of children under-5 who are stunted is 15.67 million. This presents a larger problem than that in Nigeria, which ranks at the top end of global malnutrition: 11.6 million children under-5 are stunted in Nigeria . Due to the emergence of children’s nutritional status in Kenya, EGF decided to work on Nutrition and Early Childhood Development programme in Kenya and the broader region for East Africa.

Educate Global Fund’s collaboration with local nutrition businesses
Typically, provision of food to children in vulnerable communities and rural areas falls under the remit of the government and/or humanitarian agencies. This dynamic, however, is undergoing major changes. In Kenya (where EGF is based), the national government will take over the WFP school-feeding program in 2018. 1.5 million school-going children in Kenya’s arid and semi-arid areas are supported by this program[8]. There is an opportunity to support the government in providing proper nutrition to these children while including various local businesses across the nutrition value chain. In this way, private capital for public good would help achieve scale and quality in a timely and cost-effective way.
 
EGF seeks to help by investing in and developing a children’s nutrition champion enterprise in the East African region. This would involve a buy-and-build strategy, incorporating local nutrition businesses. To qualify for an investment from us, local businesses would need to demonstrate how capital deployed directly solves a problem for children with an underlying attractive commercial business proposition. Currently, we have identified over 10 businesses at different stages of the investment process from screening to due diligence.
 
The following are some of the businesses in EGF’s pipeline:

  • NutriCo 1 was established in 2005. They produce a vegetable-based porridge that incorporates dried fruit and various other micronutrients. They operate in Kenya and Sudan. Their products have been geared towards eliminating food waste, especially through their innovative use of dried fruit that would otherwise be discarded. They have previously collaborated with Initiative Save Food, The Rockefeller Foundation and USAID.

  • NutriCo 2 was established in 2010 in an informal settlement in Western Kenya. From humble beginnings, the company has managed to achieve revenues of over 1 million USD. The company uses locally-available biofortification to provide affordable, nutritious porridge, categorised as Fortified Blended Food (FBF) which combats anaemia in growing children (including an early childhood formula). They employ a network of about 4,000 women farmers to source agricultural raw materials. In the spirit of the 2008 Copenhagen Consensus (a global series of proposals for confronting 10 great global challenges, malnutrition among them), they avail their products in small packs of $0.4 to schools for school-feeding programmes. They have been able to reach nearly 3 million malnourished children to date.

  • NutriCo 3 was established in 1998 in Central Kenya. They produce maize and porridge flour, and predominantly distribute to local wholesalers in Kenya. They have previously been selected as candidates for the Solutions for African Food Enterprises (SAFE) program. Through their partnership in the SAFE program, they have managed to double their revenues to over 59,000 USD.

  • NutriCo 4 was established in 2016. They produce high-quality complementary foods that address the nutritional needs of infants, children, and mothers. They have previously collaborated with the International Finance Corporation (IFC), the CDC Group and the Netherlands Development Finance Company (FMO).


Alongside the capital commitment, EGF will look to deliver strategic and operational value to support these inclusive local businesses in their efforts to develop innovative new products for children nutrition (especially early childhood), to secure procurement contracts with UN agencies (especially WFP, UNICEF), supermarkets, bilateral humanitarian agencies and the aid community, and to operate at the highest governance and quality standards.

Through this work, the SDG Philanthropy Platform hopes to have a positive impact in supporting SDG 2 (Zero Hunger) and SDG 4 (Quality Education). Furthermore, in collaboration with Business Call to Action, we are currently designing a tool to measure impact integrating Environmental, Social and Governance (ESG), Impact and the Sustainable Development Goals 2030 agenda.

Although it is at an initial stage, we believe that private capital investments in local businesses have great potential to accelerate ECD Impacts and contribute to achieving the SDGs in Kenya, ensuring the following:

  • Maximum developmental potential for children in Kenya;

  • All children are immunized;

  • All children enjoy two meals a day;

  • Free universal education to all children;

  • Children who are strong in mind and body.


Educate Global Fund (EGF) is an investment advisor and asset manager dedicated to Education. EGF seeks to improve educational outcomes and life chances for children in low-income communities with an initial focus on East Africa. In addition to allocating capital, EGF provides operational and strategic support to enterprises with a team based locally in Kenya.

The Sustainable Development Goals Philanthropy Platform (SDGPP or the Platform) is a global initiative that connects philanthropy with knowledge and networks that can deepen collaboration, leverage resources and sustain impact, driving SDG delivery within national development agenda. SDGPP is a global facilitator that enables strong partnerships between philanthropic organizations, the United Nations, governments, civil society, businesses, and other stakeholders.

[1]World Bank Global Monitoring report 2012

[2] Ibid

[3] Ibid

[4] Global Nutrition Report: Actions and Accountability to accelerate the world’s progress on nutrition, 2014

[5] Impact of iron supplementation on cognitive functions in preschool and school-aged children: the Indian experience, (Sesahdri & Gopaldas, 1989)

[6] Early Childhood Mortality in Bihar and Uttar Pradesh (Agarwal et al, 1987).

[7] Early childhood health, nutrition and education, Matthew Jukes, 2006. Background paper for the Global Monitoring Report 2007, UNESCO.

[8]https://www.businessdailyafrica.com/news/WFP-to-stop-feeding-school-children-in-arid-areas/539546-3919792-3ewc8b/index.html