Russia-Ukraine war likely to affect food security in Africa - PhD candidate

A Ghanaian based doctor of Philosophy (PhD) student with the department of economics (International Trade) at the University of International Business and Economics in Beijing, China, Zankawa Sanusi Kris has observed that the current impasse between Russia and Ukraine has the potential of gravely affecting food security in the African continent.

Commenting on the global sanctions imposed on Russia as

Read full articlea result of the armed hostility, he observed that Russia was currently one of the biggest exporter of fertilizer and Africa countries that largely depend on agriculture to feed their citizens among others are going to have their food systems dislodged.

"Russia is one of the world’s biggest exporters of fertilizer, this war has the potential to dislodge some of Africa’s countries’ food systems, particularly those that are largely dependent on agriculture to not only feed citizens but also to manage their economies.

This also has the potential to increase prices, further exacerbating food insecurity on the continent rolling back some of the important gains made during the previous decades", he said.

He said most African economies rely on diesel as a critical input to agriculture and manufacturing, with Russia and Ukraine accounting for around 30% of the global wheat exports, and Ukraine accounting for 15% of corn exports, and the disruption to supply due to sanctions and the war will push up the prices of wheat and corn.

Africa in his view, import most of the wheat it consumes and Egypt, Ghana and Nigeria will most likely be affected due to its high dependency on imports from both countries.

He added that, some African countries that consume corn mainly in southern Africa might not feel any significant impact since much of their consumption is locally grown. Nevertheless, as prices globally go up a host of other goods and services will be affected.

According to him, the war was currently forcing African citizens to dig deeper into their pockets as many countries are already walking a tight robe as fuel prices surge. Globally, he noted the effect will largely be on commodity prices such as crude oil and wheat.

"The sanctions on Russia will most likely lead to supply chain disruptions driving up commodities prices, and in turn inflation, causing spiraling crude oil and cereals prices for governments and consumers across the continent.

Notably, the cost of crude oil has been on an upward trajectory signaling a record price jump of over 80%, the highest price since 2014 after the announcement of Russia’s invasion. The demand for specific energy products as such diesel and other middle distillates is highly correlated to the economic cycle since they are mainly used in freight transportation, manufacturing, farming, and mining", he pointed out.

He said energy products tend to be the biggest import so a price increase, it has a material effect on the import bill and by implication the trade balance and current accounts, revealing that, petroleum imports accounts for 17-20% of imports in Nigeria, Kenya, Egypt, and Ghana in 2019.

Mr. Sanusi further observed that, the adverse effects posed by the suspension of Russia’s export of natural gas to Western Europe as part of the sanctions due to war will open the door for other oil exporters. Nigeria, noted particularly, already has an agreement with Niger and Algeria to ship liquefied natural gas through the Trans Sahara gas pipeline to Europe.

He said African financial markets will get much tighter making it difficult for many countries to get financing in the international markets as the US and European Union considering locking Russia out of the Worldwide Interbank Financial Telecommunication (SWIFT) – the network used by banks for cross-border payments making it difficult for many African countries to trade with Russia.

He admonished African countries to rake in some gains from the shortages and the price increase by consolidating their fiscal policies and diversifying their investments through Stabilization Funds or Sovereign Wealth Funds to cushion them from future economic shocks and adverse commodity price volatility.