Russia-Ukraine conflict wreaks havoc on African economies: Expert

Russia and Ukraine are the world’s leading wheat producers.

As the conflict drags on, African countries with trade ties with Russia and Ukraine face wheat and fertilizer supply shortages

Addis Ababa, Ethiopia | Xinhua | The Russia-Ukraine conflict has rocked several countries in Africa, particularly net importers of commodities, a senior economist has said.

Tewodros Mekonnen, an economist at the International Growth Center, told Xinhua that as the conflict drags on, African countries with trade ties with Russia and Ukraine face wheat and fertilizer supply shortages.

“Many African countries use nitrogen-based fertilizer for their food production, and they import about 70 percent of the product from Ukraine and Russia,” said Mekonnen. “So with the supply side being affected, they are facing increased import bills.”

If some compromise by reducing fertilizer imports, food production would shrink and food prices would rise higher, the economist warned.

Data from the United Nations Food and Agriculture Organization showed that the Food Price Index averaged 159.3 points in March, up 12.6 percent from February, when it had already reached its highest level since its inception in 1990.

According to Mekonnen, countries like Ghana, Ethiopia and Kenya are hard hit by soaring energy and food prices. The situation has severely affected their external imbalances and exacerbated inflation at home.

Another example is Egypt, which relies on Russia for its wheat. After the Russia-Ukraine conflict broke out, the African nation has to tackle hikes in bread prices, Mekonnen said, noting that Russia and Ukraine together account for around 30 percent of global wheat exports.

The expert added that the conflict comes at a critical time when many African countries are still struggling to recover from the COVID-19 pandemic and global inflationary pressures.

Ethiopia, with annual wheat imports worth 400 million U.S. dollars and fuel imports valued at 3 billion U.S. dollars, found its food and fuel prices both surging because Russia, as one of the world’s largest exporters of crude oil, is beleaguered by sanctions, disruptions to energy exports and a potential embargo, said Mekonnen.

Though some fuel exporters, such as Nigeria, Angola and Sudan, and mineral-exporting countries might see growing revenues for the moment, Mekonnen suggests that most net commodity importers should work on substituting imports, revamping local production and attracting the foreign direct investment as a way out of the crisis and similar shocks in the future.

*****

Xinhua

The post Russia-Ukraine conflict wreaks havoc on African economies: Expert appeared first on The Independent Uganda:.

Spread the love
Generated by Feedzy