It is known that Russia’s invasion of Ukraine on February 24, 2022 is negatively impacting the global economy.
“One year after Russia’s invasion of Ukraine on February 24, 2022, which caused widespread suffering, the global economy is still enduring the consequences – crushed supplies of fertiliser and energy along with more inflation and economic uncertainty in a world that was already contending with too much of both,” an Association Press article online has stated.
The war caused world food prices to go up significantly as supply chains were disrupted by it. Supplies of grains, such as wheat, barley, rice, and cooking oils and fertiliser, from Russia and Ukraine, were blocked and that created scarcity on the world market, pushing prices up.
According to the International Monetary Fund (IMF), consumer food prices rose in wealthy countries from 3.9 per cent to 7.3 per cent in 2022 and from 5.9 per cent to 9.9 per cent in poor countries.
It also caused crude oil prices to skyrocket. According to the president of the Peterson Institute for International Economics, “its impact on the world economy is a passing shock … is a human catastrophe”. The focus of this article is on how the Russia/Ukraine war affected the economies of African countries.
An article I read online has thrown some light on how the Russia/Ukraine war has affected African economies. It was written by the African Defence Forum’s staff and dated March 21, 2023.
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Headed, “Russia’s war on Ukraine still causing pain in Africa” the article began as follows: “Hardly a meal goes by that people don’t feel the effects of Russia’s war on Ukraine.”
“One year after Russia’s invasion, food prices reached elevated levels and inflation is devouring the budget of consumers, governments and relief agencies.”
“The effects of the war are rippling throughout the continent from higher costs of energy and goods, to widespread food shortages. African countries are paying a heavy price.” In Kenya, according to the article, “the cost of cooking oil, fuel, cooking gas and other basic commodities spiked and was followed by price increases of common foods such as corn meal, bread and chapati”.
“For many, the prices have made some foods unaffordable.” Kenyan Institute for Public Policy Research and Analysis has indicated that 14.5 per cent of all foods consumed in Kenya in 2022 were imported. They included 67 per cent of wheat from Russia and 22 per cent of that from Ukraine.
“Food imports put Kenya in a vulnerable position regarding economic shocks in the global market,” the institute stated in its August 2022 report. “Russia/Ukraine war has led to a surge in fuel prices in Kenya, leading to high production and transportation costs and thus affected distribution of food commodities,” according to the report.
In Egypt, the article observed that prices rose by 48 per cent last year. “It’s impossible to support eight people with 3,000 Egyptian pounds,” Madga, a housewife in Cairo, the capital of Egypt, has stated. “Everything is more expensive. Prices have exploded; Chicken now costs 95 Egyptian pounds. Prices of everything have increased. I don’t buy meat anymore.”
The article explained that because Russia is the world’s largest exporter of fertilizer of which a large amount was imported by African countries, in a country like Senegal, farmers could no longer afford fertiliser. Because of that, many harvests have failed in that country.
Fertiliser costs in Senegal doubled in February 2023, in spite of state subsidies. “We needed 32 bags of fertiliser in this field but we could only get eight,” a Senegalese farmer, Dieumb Sall Mbengue,has said.
“We will see the consequences at harvest time.”
A Senegalese fertiliser manufacturing company used 50% of ingredients that came from Russia and Ukraine.
“We are struggling with supply of raw materials because of inflation, freight, shipping and access to supply zones,” said Sedar fertiliser plant director, Modou Thiam.
The same problem goes for Niger. That country also found access to fertiliser difficult.
In that country, bags of fertiliser have gone up from 2,000 CFA ($19.41) to 30,000 CFA ($48.53).
The article quoted Mremba Phezo Dizolele, a senior research fellow on Africa at the Centre for Strategic and International Studies, as saying that painful consequences of the Russian war should be a “wake up call’’ for African leaders to chart a path towards self-sufficiency.
“How can a continent that is home to a large percentage of arable lands – a continent that can feed the world literally be dependent on two countries that are so far away?
“The (African) countries have tried to adopt new ways of doing agriculture or feed themselves but, it has not been as revolutionary as it ought to be, considering all ingredients and all the resources that Africa needs to feed herself.”
For Nigeria, an Associated Press article online stated that food prices in that country went up by 37 per cent in 2022, because Nigeria is a top importer of wheat from Russia.
It stated that 40 per cent of bakeries in Abuja, the capital, shut down after the price of flour jumped up by 200 per cent.
How Russia/Ukraine war Impacts Ghana?
Statistics on the impact of the Russia/Ukraine war on Ghana’s economy are scarce or unavailable. Ghana’s research institutions, such as the Institute of Statistical, Social and Economic Research (ISSER) is yet to come out with its work as to how the war in Ukraine affected living standards and cost of living in Ghana since February 2022.
Statistics provided by the Ghana Statistical Service on inflation are scanty and the actual causes of the astronomical increases in inflation since February 2022 have not been captured.
When Ghanaian experts do not feel inclined to do research and provide facts and figures on the true causes of high inflation in Ghana, how can the country begin to find solutions? Is it too easy for Ghanaian experts to blame the government than to do research to locate the root causes of high inflation in the country?
Inflationary trends in Ghana over the years, before the Russia/Ukraine war, were stable and were towards single digits as indicated by the following figures provided by the World Bank and Trading Economics – 2016, 17.45 per cent; 2017, 12.37 per cent; 2018, 7.81 per cent; 2019, 7.14 per cent; 2020, 9.89 per cent and 2021, 9.97 per cent.
Ghana’s inflation rates started to go up after Russia invaded Ukraine in February 2022. By December, 2022, it had hit 54.1 per cent. In January, 2023, it came down to 53.6 per cent. The US dollar strengthened during the period as its government raised interest rates to contain high inflation in that country.
That weakened the Ghana cedi, and with high global crude oil prices, both served as other contributory factors to high inflation in Ghana.
The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, and the Bali summit of the Group of 20 have acknowledged the fact that the Russia/Ukraine war and the COVID-19 pandemic had raised global inflation and increased the debt burden of developing countries.
As recommended by the senior research fellow on Africa at the Centre for Strategic and International Studies, African leaders must cut out a path that leads to self-sufficiency.
To do that, African countries need to lay the foundation for their economies to take off.
For that, a major agricultural revolution is necessary.
Using the Russia/Ukraine war as a “wake up call”, the ECOWAS and other African regional economic groupings, and the African Union must set the pace by preparing an agriculture-based economic recovery programme supported by the UN Economic Commission for Africa and the African Development Bank.
Without an agricultural revolution in every African country, there is no way that Africa can come out of its dependency on foreign countries for the supply of farm produce such as wheat, maize, rice, cooking oil and others.
Email: therson.cofie@yahoo.com