As a baby, Yanoya was severely emaciated and came close to death until her mother took her to a UNICEF-supported nutrition centre in north-east Nigeria where she ate peanut-based therapeutic foods that rapidly enabled her to put on weight and regain her health. A new investment from the UN Capital Development Fund is set to transform this humanitarian supply chain for the West Africa region by building up the local manufacturing base to create a guaranteed market for local farmers and boost the Nigerian economy while bringing down child malnutrition treatment costs and saving more children’s lives.

Peanuts, also known as groundnuts, are a nutrient-rich legume that when processed into a paste and fortified with vitamins are used by humanitarian agencies as Ready to Use Therapeutic Foods (RUTFs) - a first line of treatment for malnourished children. Although peanuts are grown across West Africa, and often by some of the poorest farming communities where incidences of child malnutrition are seasonally high, sourcing key ingredients locally was not happening due to lack of specialized equipment for processing raw legumes and absence of a local upstream supply chain meeting UNICEF standards. This created an opportunity for UNCDF to step in with a targeted investment in specialized processing equipment that has the potential to boost incomes for local farmers while reducing costs for RUTF suppliers, such as UNICEF.

“This is a model of UNCDF in action, deploying first mover, risk tolerant and impact-aligned capital in a very targeted way to encourage the private sector in challenging markets and improve the function of a vital humanitarian supply chain while simultaneously creating jobs and opportunities,” said Charles Wetherill, Programme Development Advisor at UNCDF.

Yanoya, with her mother, after treatment at a UNICEF nutrition centre where she received peanut-based therapeutic food treatments. Credit: @UNICEF Nigeria / Maina Karabara

Yanoya, recovered from malnutrition after receiving peanut-based food treatments. Credit: @UNICEF Nigeria / Maina Karabara

Investing in the local humanitarian supply chain

Kenyan-owned food producer Ariel Foods FZE, will expand production capacity at its facility close to Lekki Port in Nigeria, thanks to a $2.5 million loan from UNCDF. The loan will finance equipment designed for processing raw materials which enables Ariel to localise more of its supply chain by using more locally grown peanuts in its RUTFs formula and providing a new source of reliable revenue to as many as 1,500 Nigerian smallholder farmers.

The expansion at the Ariel facility is expected to create a new market for locally grown peanuts and other nutrient–rich legumes that is expected to strengthen livelihoods and community resilience in marginalised farming regions of northern Nigeria, already made vulnerable by years of rumbling insecurity. At the same time, UNICEF, other UN partners and humanitarian agencies can expect to see costs for locally produced RUTFs fall, enabling them to stretch budgets and reach an estimated 25,000 more children every year with essential, life-saving nutrition by 2030.

The investment could not come at a more opportune moment. Climate change, growing instability and rising food costs are contributing to a malnutrition epidemic. In 2025, an analysis of data from 14 West African countries found that about 16.3 million children under five are acutely malnourished, including 4.3 million with severe acute malnutrition. This is a marked deterioration from 2024, when some 13.1 million under-fives were found to be malnourished, according to analysis by the Food Security Information Network (FSIN). Areas struggling with instability, such as Chad and northern Nigeria, are reporting some of the highest child malnutrition figures in the region, according to FSIN.

Financing lasting solutions

The UNCDF investment is the result of a three-way partnership with UNICEF, the UN agency for children and the Children’s Investment Fund Foundation (CIFF), which deploys flexible philanthropic capital to finance an array of innovative approaches in the interests of children.

“We wanted [..] to develop a really healthy manufacturer–supplier market. We know that some manufacturers occasionally need access to credit. And we had partnered with UNICEF, and they suggested working with UNCDF [to] provide credit to manufacturers,” said Anna Hakobyan, Chief Impact Officer & Executive Director Nutrition at CIFF. “That’s how the relationship [with UNCDF] started – and it’s been going really well.”

After a detailed on-site due diligence including consultation with government partners, UNCDF identified Nigeria-based supplier Ariel Foods FZE for a loan to cover the acquisition, installation and commission of a processing facility for peanuts and other nutritionally rich legumes, focusing on locally produced raw ingredients. The investment is a pilot under the Nutrition Supplier Finance Facility, a joint UNCDF- UNICEF initiative.

“This is more than an investment in a single company, it is a market leading investment in an entire system, with positive upstream and downstream effects,” concludes Charles Wetherill. “It illustrates what UNCDF is capable of doing with flexible, risk tolerant and thoughtful capital, in fact, the role we were designed to play within the UN development architecture, and precisely at a time when there is so much appetite for new and more effective models for financing development.”