Ukraine- Russia war impacts on oil prices

Frustrates renewable energy, deforestation efforts

The impacts of the Ukraine- Russia war will likely deter and frustrate African countries’ efforts of transitioning to renewable energy sources.

United Nations Development Programme ( UNDP) Assistant Secretary General and Assistant Administration at the regional bureau for Africa Director, Ahunn Eziakomnwa says this is in addition to the ripple effects of increased oil, food and petrol prices, all of which have a negative impact on domestic livelihood and local economy activity. Speaking during a virtual meet with international development journalists this week on the consequences of the Ukraine and Russia war crisis for Africa, she pointed out that countries in Africa would have to devise means to ensure their trajectory to renewable energy transition is on point and that frameworks are nuanced to synthesise the benefits and costs of renewable energy. “Due to increase in oil prices due to the war in Ukraine and Russia, we have seen a sharp increase in basic commodities and this will likely see some households resorting to unsustainable energy sources, which have a negative impact on the environment and frustrate efforts to mitigate climate change impacts.” She said some communities were forced to go back to using firewood for example, for domestic use and in commercial efforts. “This deters efforts to challenge deforestation and in future can lead to land degradation and reduced biodiversity.” Locally, the government has developed regulations to try and arrest deforestation by implementing strict laws on the cutting of trees and use of firewood, however, many households, in both rural and urban areas, are still utilising firewood, largely due to the high cost of electricity. In Lobatse for example, it is still common for people to use firewood despite it being a fully developed town. A resident, Lesego Kgaodi, who relies on firewood for both domestic use and reselling says paraffin and electricity are too expensive now. “Firewood is cheaper and cost effective so it is a good alternative. It obviously has a negative health impact from the smoke in the air and we heard we are discouraged to cut trees but we have few, if any options. “Everything is expensive nowadays and many of us cannot even afford to pay for an average of P800 for electricity per month for a household of about four people. Paraffin has also gone up and is not as easily accessible as it was before.” Eziakomnwa said now is the time for African governments to invest in energy security and also prioritise this not only based on costs, but the long- term uptake of renewable energy for improved air quality and human health on the backdrop of the climate change crisis. On the macroeconomics side, UNDP Africa senior economist Raymond Gilpin indicated that due to their heavy reliance on overseas export and agriculture as a means of livelihood, African countries are particularly affected by soaring prices in food, fertilisers and fuel, as well as macro- economic instability and trade disruptions caused by the war in Ukraine. “This jeopardises recovery from the socio- economic fallout of the Covid19 pandemic. The long- term consequences of the new global crisis ( Ukraine war) are likely to transcend beyond social and economic outcomes, posing greater risks to peace and stability efforts, a time when sub- Saharan Africa accounts for nearly half of the global deaths caused by terrorism and the witness in the recent number of coups.” He also noted that furthermore, as the war affects inflation and economic activity, global interest rates are likely to rise. “This could worsen Africa’s debt position and create a domino effect of defaults, particularly in countries whose debt repayments are due in 2022 and 2023. Moreover, an increase in domestic interest rates will have a negative effect on both domestic debt and the payment capacity of SMMEs.”