Sweden boosts growth of Zambia’s food processing sector with issuance of US$4m grant to TechnoServe

ZAMBIA – Zambia’s food processing sector is set to benefit from SEK 36 million (US$4 million) grant issued to TechnoServe, an international non-profit organization, from Sweden through the Swedish International Development Cooperation Agency (Sida).

The support will be channelled towards the implementation of the Food Enterprises for a Developed (FED) Zambia program, set to run from 2020 to 2023.

The FED program, according to TechnoServe, will support the growth of foundational, small and medium-sized food processing enterprises in Zambia.

The initiative is aimed at strengthening the food processing sector, generating economic opportunities for women, and creating jobs.

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“We’re excited to partner with Sida to help small and medium-sized businesses in the sector drive inclusive growth and generate new opportunities.”

Chileshe Chilangwa – TechnoServe’s country director for Zambia and Malawi

This will be done through customized technical assistance, sector-wide training, and improved access to finance for food processors.

It is expected that the firms receiving customized technical assistance will create 100 new jobs due to the program and increase their revenue by 25-40%.

It is also forecasted that the volume of certified, safe foods sold by the firms will increase by 25%.

The program will also apply a gender lens to its work, with a strong focus on creating economic opportunities for women.

“Women play a vital role in the food processing sector and run many of the small firms that provide flour and edible oil to base-of-the-pyramid consumers and informal markets. At least half of the businesses participating in the FED program will be owned by women, and women will also make up at least half of the attendees in the sector-wide training and receive at least half of the grants disbursed through the program.

“Sweden believes that strengthening the lives of women and youth through financial inclusion is crucial. We know that women are more likely to be financially excluded than men,” Susanna Hughes, head of bilateral development cooperation for the Embassy of Sweden, said.

Food processors play a vital role in economies and food systems due to their position at the center of supply chains.

Competitive food processing firms provide a stable and profitable market for crops grown by smallholder farmers, generate employment for workers, and produce nutritious, affordable food for local consumers.

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“Through our work over the last decade to support processors in Zambia and across Africa, we’ve seen that strong food companies can have a lasting impact on livelihoods, employment, and nutrition.

“We’re excited to partner with Sida to help small and medium-sized businesses in the sector drive inclusive growth and generate new opportunities,” Chileshe Chilangwa, TechnoServe’s country director for Zambia and Malawi, said.

FED program to address technical and business challenges

In Zambia, there are about 1,500 food processing businesses, which generate approximately 60% of the country’s total manufacturing output.

However, most of these food processors are small and face a number of challenges related to manufacturing processes, marketing, sourcing of raw materials, access to finance, and adopting technology.

As a result, the sector still has significant untapped potential for growth. The COVID-19 pandemic has also created an array of disruptions to these businesses’ operations, threatening the survival of many firms.

To support growth in the sector despite these challenges, the FED project will work hand-in-hand with 100 food processing firms, delivering tailored assistance to address the firms’ most significant technical and business challenges.

It will also work with partners to provide sector-wide trainings for stakeholders across the food processing industry.

Finally, FED will administer an in-kind grants fund so that processors can obtain certification, access equipment, and build stronger market connections.

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