Economy

the war in Ukraine, a long-term shock for Africa

Africa has escaped the worst, the food riots or great famines feared because of the Russian war in Ukraine. However, it still suffers from the consequences of this crisis with an increase in the population in a situation of food insecurity and a decline in agricultural production in the long term.

This is the observation made by the authors of the 2023 edition of The African Economy (1), an annual publication by the French Development Agency (AFD) which analyzes the economic state of the continent at the start of the current year. Gathered this January 12 in Paris to present their main conclusions, they paint the image of an Africa “more resilient than expected”, while facing great difficulties. In this collective work, they note that “123 million Africans are now in a situation of acute food insecurity, and this number has increased by 28 million in the last two years”.

The first cause is the rise in the prices of imported food products, which began at the time of the pandemic and accelerated thereafter. Ukraine and Russia supply one third of the cereals and oils imported by African countries. Between 2019 and 2022, wheat and maize prices have doubled in Africa, that of sunflower oil has increased by 50%.

The Ukrainian export resumption agreement negotiated by Turkey, starting in the summer of 2022, has helped ease prices a little. Nevertheless, the increase puts the population of large African cities in particular difficulty, who consume these products while those in rural areas live more from their food crops.

Rise in fertilizers will curb export crops

The heaviest consequence of the war will ultimately only be seen in the medium term. Ukraine and Russia are major fertilizer producers. Half of African supplies traditionally come from these two countries. However, Ukraine is no longer able to export, while Russia is encountering difficulties because of banks and insurance companies which do not want to take the risk of suffering sanctions, even if this trade is exempt from all measures punitive.

Because of these blockages, the price of fertilizers on the African market has therefore tripled in two years. It is a shock with long-term effects for the entire agri-food industry on the continent.

“This will have little impact on domestic production, as smallholders do not use imported fertilizer. On the other hand, there will be consequences for crops intended for export: cotton, cocoa, bananas or pineapples,” explains Bio Goura Soulé, expert of the Economic Community of West African States (ECOWAS) for agricultural issues.

Soaring prices will lead large farms to limit their use in 2023, which will lead to a drop in production. This will reduce export revenues, weigh on agricultural employment and on the tax revenues of States, when they are already in a fragile financial situation.

Diversified economies fare better

The per capita income of African countries will only return this year to the level it had in 2019. “It took four years for the Covid shock to be absorbed on a continental scale”, observes Thomas Melonio, Director of Research at AFD. And the return to growth scenario is not the same for all countries. The economist distinguishes four profiles: countries with a diversified economy and those whose economy is based on oil, or on tourism, or on extractive materials.

Unsurprisingly, those that are doing the best are the diversified countries: Senegal, Niger, Rwanda, Côte d’Ivoire, Benin and Togo, which are among the continent’s growth champions. They are the only ones to have been able to maintain positive growth in 2020, at the height of the pandemic, and quickly regained a sustained pace of development. They ended 2022 with an average growth of 5.1% and should continue at the same pace in 2023. None of the other country profiles are doing as well.

———–

The Sahel, the first growth zone in Africa

The Sahel zone is currently experiencing the highest growth in Africa, with 5.9% expected in 2023, ahead of the Indian Ocean coastal countries (at 5.2%) and East Africa (4.8%).

The share of food supply from imports is 16% on average in Africa, but some countries are more than 70% dependent for their grain supplies. This is the case of Algeria, Congo, Gabon, Botswana and Lesotho.

Africa is the continent with the lowest fertilizer consumption, with 20 kg per hectare per year on average.

Source : WORLD NEWS

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