Far from Kyiv, Africa faces an economic collapse from the war in Ukraine


DFrom Nigeria to Malawi, African countries are already suffering from the economic blow of Russia’s invasion of Ukraine, raising prices for basic necessities and oil, raising the risk of poverty worsening across the continent.

Global oil prices have exceeded $ 100 a barrel, reaching their highest levels in the decade at the beginning of the war, doubling fuel prices in Africa, especially Nigeria, the most populous country on the African continent.

Three weeks after the start of the war, costs have risen, raising concerns about food security in particular, as Ukraine and Russia are major suppliers of wheat and grain for Africa.

Fertilizer prices are skyrocketing due to sanctions on Moscow. Threats to African crops that could further boost food costs.

“War in Ukraine means hunger in Africa,” IMF Managing Director Cristalina Georgieva said on Sunday.

For Julius Adeware, a Nigerian bakery, rising fuel prices are a disaster. Like many in Nigeria, he relies on petrol generators. This is because the National Grid is only supplying power for a few hours a day these days.

“We haven’t had electricity since yesterday and we’re running on a generator,” laments Julius at a bakery in Lagos, the economic center. “Production costs have increased significantly.”

Nigeria, Africa’s largest oil producer and largest economy, has to import most of its fuels due to its inadequate refining capacity and fragile domestic markets.

Recently, several local airlines have announced that they must cancel their flight due to lack of fuel. And the price of the pump has more than doubled to reach 1.60 euros / liter.

“We don’t know how to get out of it because 70% of the industry depends on fuel,” Lanre Popoola, regional chairman of the Nigerian Association of Businessmen (MAN), told local media. rice field.

Considerable challenges

The war in Ukraine will have different economic implications for different African countries, explains Amaka Ankh, an analyst at consulting firm Eurasia Group. She first mentions inflation in raw material and oil importers such as Nigeria. Nigeria is also subsidizing fuel and expanding its deficit a little further.

Others, such as Ghana, who are heavily taken care of, will face higher borrowing costs, Ankh said.

But in the long run, gas-producing countries such as Tanzania, Senegal and Nigeria could benefit from reduced imports of Russian gas from Europe, says Danielle Resnick of the Brookings Institution. ..

“Despite these possibilities, in the short term, the Ukrainian invasion can pose challenges to African families, the agricultural sector, and food security,” she claims.

Especially in Ethiopia, 20 million people affected by droughts and conflicts need food aid.

According to official figures, Kenya, the third largest economy in sub-Saharan Africa, typically imports one-fifth of its grain from Russia and 10% from Ukraine.

And already, prices are rising. A 50 kg fertilizer bag costs 6,500 Kenyan shillings (52 euros) compared to last year’s 4,000 shillings (32 euros).

According to the government, prices of soap, sugar, salt, cooking oil and fuel are skyrocketing in Uganda.

“Victims of war”

“Most commodities are produced locally, but some raw materials are imported and their prices are determined by shocks in the international market,” Uganda’s finance minister, David Bachty, told AFP. ..

Rita Kabak, a 41-year-old vendor in the capital Kampala, says she spends an average of € 1.25 a day on food and other basic necessities.

“But that’s not enough anymore. I’m spending more than double now.”

Concerned about inflation from Russia’s invasion of Ukraine, Mauritius Central Bank raised the key rate to 2% for the first time since 2011.

Mauritius Prime Minister Pravind Kumar Jugnout said in a television speech, “It’s a shame that other clouds appeared when the sky cleared after Covid-19.”

In Malawi, the prices of bread and cooking oil have risen by about 50%.

“This war has nothing to do with us and it is unfair that we have to pay such a high price,” protests Fasani Phili while buying her bread in the capital Lilongwe. did.

“Every time a war breaks out somewhere in the world, we are not always victims.”

03/16/2022 13:53:05-Lagos (AFP)-© 2022 AFP