Food inflation: Zim tops list of hardest hit countries

THE economies of Zimbabwe, Egypt and Guinea are facing significant challenges due to soaring food inflation, placing them among the top 10 countries globally most affected by this roiling crisis. According to the World Bank’s February 2024 update, Zimbabwe leads the pack in Africa, with food inflation at a staggering 26% year-on-year, followed closely by Egypt at 18% and Guinea at 7%.

Real food inflation, calculated as the difference between food inflation and overall inflation, provides a dire picture of the strain on households’ budget in these countries.

The United Nations’ Food and Agriculture Organisation (FAO) noted that Egypt’s food inflation has been on a steady rise since January 2023, reaching a peak of 74% in September 2023, compared to 48% at the beginning of the year.

This dramatic increase is expected to impact on the consumption patterns of staple foods such as bread and rice among Egyptian households even as risks abound on the horizon.

In response to the crisis, the Egyptian government has taken measures to ensure food security, announcing in January 2024 that national strategic reserves of wheat were sufficient to cover consumption needs for 4,8 months (around 146 days).

Despite these efforts, wheat imports for the 2023/24 marketing year are forecast to be lower than the previous year, indicating ongoing challenges in stabilising food prices and ensuring adequate supply.

The situation in Guinea, while less severe compared to Zimbabwe and Egypt, still poses a significant challenge, with food inflation at 7%. This underscores the broader issue of food insecurity and the need for sustained efforts to address the root causes of food price volatility in these countries.

The Institut National de la Statistique de Guinée reported that the cost of food in Guinea rose by 14,90% in December 2023 compared to the same month in the previous year. Food inflation in Guinea has averaged 18,73% from 2005 to 2023, reaching an all-time high of 64,40% in September 2005 and a record low of 1,50% in December 2014.

Food inflation in Zimbabwe worsened by tanking currency

Zimbabwe has been grappling with a challenging economic situation, particularly concerning the steep rise in maize meal prices, as highlighted by data from FAO. After a period of relative stability in late 2023, maize meal prices surged in January 2024, primarily due to the sharp depreciation of the national currency — the Zimdollar — against major world currencies.

The persistent weakness of the Zimdollar has been a driving force behind the steep price growth throughout 2023, pushing Zimbabwe’s national inflation rate to 35% in January 2024, up from 27% in December 2023.

This inflationary pressure has significantly eroded the purchasing power of households, leading to an estimated 3,5 million people being acutely food insecure and in need of urgent assistance until at least March 2024.

The high prevalence of food insecurity is exacerbated by reduced agricultural output from the previous cropping season in 2022/23, particularly in the southern and western provinces of Zimbabwe.