NEAR EAST AND NORTH AFRICA Regional Overview of Food Security and Nutrition 2024: Statistics and trends

The Arab region¹ continues to face serious food security and nutrition challenges and is increasingly away from meeting Sustainable Development Goal (SDG) 2 of Zero Hunger. The prevalence of undernourishment reached a new height: 14 percent in 2023, meaning that there were 66.1 million hungry people in the Arab region. Moderate or severe food insecurity in the same year affected 39.4 percent of the Arab population (186.5 million individuals), a 1.1 percentage point increase from the previous year, and 15.4 percent of the population (72.7 million people) faced severe food insecurity in 2023. ¹ This report covers the 22 Arab States: Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syrian Arab Republic, Tunisia, United Arab Emirates and Yemen. The 22 Arab States include 19 (Near East and North Africa) NENA countries as well as three additional Arab states: Djibouti, Comoros and Somalia.

Malnutrition continues to be an issue of high concern. In 2022, the prevalence of overweight among children under 5 years of age and among adults was around double the world average. From 2017 to 2022, the cost of a healthy diet increased by 28.2 percent, and almost one-third of the region’s population could not afford a healthy diet in 2022.

Increased financing of sustainable agrifood systems is critical to meeting SDG Targets 2.1 and 2.2, which aim to end hunger, food insecurity and malnutrition in all its forms, as well as to support the implementation of the Paris Agreement adopted by the United Nations Climate Change Conference in 2015. Increased flows of investment and repurposed public support are two of the key drivers in the transformation of agrifood systems and can spread their positive impacts throughout agrifood, socioeconomic, and environmental systems. Increased financing is a crucial means of the implementation of SDGs.

This report adopts the new definition for financing food security and nutrition that was presented in The State of Food Security and Nutrition in the World 2024, which is comprised of core and extended definitions. The core definition includes the financing flows that support main determinants of food security and nutrition, while the extended definition also includes financing flows that contribute to addressing the major drivers of food insecurity and malnutrition. The report undertakes mapping the current financing of food security and nutrition. Based on its findings, the broader agriculture sector (agriculture, food, forestry, and fishing sectors) in Arab countries received USD 28.4 billion in financing in 2021, the majority of which was bank credit (USD 12.8 billion) and government expenditure (USD 10.4 billion), with a smaller part of development financing for food consumption (USD 4.9 billion) and a tiny share of foreign direct investment (0.3 billion USD). This estimate of current financing does not include consumer spending and financial flows through food trade and retail, which benefit local agrifood systems. It also excludes government spending on social protection and health services, as not all of these expenditures relate to food security and nutrition. Arab agrifood systems will need to better target existing, as well as additional, financial resources for agrifood systems transformation that would improve food security and nutrition while safeguarding livelihoods and protecting the planet.

Increasing the current financing of sustainable agrifood systems will first require repurposing some existing support measures so that they more effectively and efficiently serve agrifood systems transformation and enable the consumption of more nutritious foods and more sustainable products/production methods. Domestic public funding also has the potential to unlock or catalyse private flows on investment to agrifood systems. This report presents how current public support measures can be repurposed along the value chain to transform regional agrifood systems to be more resilient, sustainable and inclusive and to make healthy diets more affordable.

While repurposing public support would offer better financial resource tailoring to the transformation of the Arab agrifood systems, it would still be insufficient for the regional agrifood systems to achieve food security while sustaining livelihoods, safeguarding human health, and protecting the well-being of the planet.

Therefore, unlocking a combination of investment capital and concessional capital that flows together through innovative financing mechanisms will be essential to provide the additional financial requirements for the necessary agrifood systems transformation.

This combination of investment capital and concessional capital flows forms a mutually positive synergy. The presence of concessional capital can mitigate the perceived risks inherent to many investment opportunities in the agrifood systems. It can also create new investment opportunities derived from results-based outcome payments. Concessional capital benefits from playing a catalytic role, where it is positioned to unlock investment capital flows, making it more impactful than conventional concessional grant funding in the absence of investment capital.

The introduction of investment capital from private sources in agrifood systems, which are a public good, must be implemented with intention, through comprehensive analysis, and involve aligning stakeholder objectives to ensure that the agrifood systems well-being is not compromised at the expense of profit motives.

Innovative financing mechanisms that can contribute to increasing funding to agrifood systems include various forms of capital guarantees, results-based financing initiatives, various forms of climate financing, debt swaps, advance market commitments and innovation incubators and accelerators.

This report outlines innovative financing mechanisms, discusses their risks and benefits, and illustrates them with real-world examples. It also discusses sources and typologies of investment capital and concessional capital in further detail.

These innovative approaches and financing instruments can be employed to close the financing gap to meet the SDGs’ food security and nutrition targets, especially in countries affected by the major drivers of food insecurity and malnutrition and in need of increased financing. These instruments can be deployed, tailored to countries’ ability to access financing, to implement the policies and investments that make up the six transformative pathways to build resilience against the major drivers.

Regulatory environments must enable the attraction of capital to innovative financing vehicles and should focus on creating a conducive environment for investment, addressing existing regulatory gaps, aligning with international standards and best practices, and being flexible enough to accommodate new and innovative financing schemes.