Higher food prices to slow Sub-Saharan Africa growth to 3.6pc

The World Bank has projected the Sub-Saharan African economy to grow 3.6% this year from 4% recorded last year on account of emerging COVID-19 variants, global inflation, supply disruptions and climate shocks.

The bank says the region’s recovery from 2020 recession triggered by coronavirus pandemic is being pulled back by the rising global commodity prices, which are increasing at a faster pace since the onset of the conflict between Russia and the Ukraine.

“As African countries face continued uncertainty, supply disruptions and soaring food and fertilizer prices, trade policy can potentially play a key role by ensuring the free flow of food across borders throughout the region. Amid limited fiscal space, policymakers must look to innovative solutions such as reducing or waving import duties on staple foods temporarily to provide relief to their citizens,” said Albert Zeufack, World Bank Chief Economist for the Africa.

The prevailing war in Eastern Europe has bore negative impact on African economies which are heavily dependent on fertilizer, wheat, corn and seed oil imports whose prices continue to skyrocket as result of the conflict and maybe halted should the situation persist.

Russia and Ukraine are world’s top exporters of food staples with the former being the world’s largest exporter of fertilizer.

According to the World Bank, the high fuel and food prices will translate into higher inflation across African countries, hurting poor and vulnerable citizens, especially those living in urban areas well as reduce foreign financial inflows.

“One point of concern is the increased likelihood of civil strife as a result of food and energy-fueled inflation, particularly in this current environment of heightened political instability,” said the bank.

South Africa’s growth expected to decline by 2.8% dragged by persistent structural constraints while  Angola and Nigeria, Africa’s top oil exporters are expected to grow 2.7% and 0.2% supported by rising global oil prices.

The multilateral lender says “resource-rich countries, especially their extractive sectors, will see improved economic performance due to the war in Ukraine, while non-resource rich countries will experience a deceleration in economic activity.”

Eastern Africa region is projected to grow 3.1% this year from 4.1% last year and settle around 3.8% in 2024.

Rwanda and Seychelles are expected to register the biggest decline in 2022, down by 4.1%, and 3.3% respectively.