Lebanon has been suffering from a continued currency devaluation since October 2019. The Lebanese Pound (LBP) has already lost 80% of its value. According to the Central Administration of Statistics (CAS), the price inflation of consumer goods reached 150.3% and the food price inflation index hit 228.6% between April 2020 and April 2021.
The main critical issue is translated in the country’s high dependency on imports, where 80% of its food needs are covered through imports. During the same phase of inflation, the salaries in LBP remained stable to some extent, which led the World Bank to anticipate that Lebanon is likely to witness an increase in poverty, unemployment and insecurity and that the impact will be felt most severely by the vulnerable segments of the population.
Furthermore, at a production level, producers and farmers selling locally are selling goods in LBP. The currency devaluation shifted the price of raw material and input supplies, therefore, increased the cost of goods drastically. In addition, the price increase of inputs is leading to a significant reduction in agriculture activities translating into a loss of income for a significant number of Lebanese. This will be reflected in a lower supply of agricultural produces and a higher price in the market.
Nonetheless, the agricultural sector has the growth potential and presents a socio-economic opportunity amid the current crisis to secure basic food needs, create jobs that secure livelihoods, and produce agri-food products that can compete internally and abroad, supporting economic development.
The SAFI project is developed with the mission to select and support up to three eligible SMEs per cycle, working on innovative products or services that can substitute an imported product, or have the potential of export and create jobs for vulnerable communities.