Rising prices stoke risk of unrest in Africa, says IMF

Surging food and energy prices stoked by the war in Ukraine may lead to "social unrest" in Africa, the International Monetary Fund (IMF) warned Thursday.

Most countries south of the Sahara are already seeing a slowdown in economic growth from last year, and the impact will be amplified by the rising cost of cereals and fuel, it said.

"The war in Ukraine has triggered a sharp increase in energy and food prices that could undermine food security in the region, raise poverty rates, worsen income inequality, and possibly lead to social unrest," the Fund said in its annual Regional Outlook for Africa.

"The war compounds some of the region's most pressing policy challenges, including the social and economic scarring effects of the Covid-19 pandemic, security risks in several countries, and the challenges posed by climate change."

GDP growth in African countries in 2021 was 4.5 percent, an upward revision from the earlier estimation of 3.7 percent, but this is expected to slow to 3.8 percent over 2022, the IMF said.

The head of the IMF's African department, Abebe Aemro Selassie, told AFP he was "very worried" by the twin impact of food and higher fuel costssomething that was particularly felt in the great majority of African countries that are not oil or gas exporters.

"This is a shock that hits in a laser light, directed at the poorest," he said.

"Fuel price increases feed into transportation costs, and people providing goods and services will raise their prices because they are now facing higher input costs," he said.

Food prices monitored by the Food and Agriculture Organization (FAO) surged 12.6 percent between February and March, reaching their highest levels since the index was launched in 1990, the UN's agency said on April 8. The previous record high was set in 2011.

Boeing reported a $1.2 billion firstquarter loss Wednesday, hit by a series of new one-time costs on its Russia business, the Air Force One presidential jet and the new 777X plane.

The big US aerospace company now expects first deliveries of the 777X in 2025, resulting in a $1.5 billion hit to earnings. Results were also dented by costs of $1 billion connected to Air Force One and a second military aircraft, the T-7 Red Hawk, and $212 million related to the conflict in Ukraine.

The loss marks the latest round of disappointing results for the commercial jet maker, which has also suspended deliveries of its 787 jet due to a series of production issues.

Revenues came in at $14 billion, down eight percent, and-as with profits-missing analyst estimates.

Work on the 777X began in 2013, but the timeframe has been repeatedly pushed back as Boeing works to address certification questions from US air safety regulators. Under the most recent schedule prior to Wednesday's deliveries, Boeing was to commence deliveries in late 2023.

Asian markets sank Monday on growing concerns of a sharp hike in US interest rates as officials struggle to contain runaway inflation, while oil was hit by expectations Chinese demand will dry up owing to Covid lockdowns.

The losses extended a sell-off across the world last week fuelled by comments from Federal Reserve boss Jerome Powell indicating officials will hike borrowing costs by half a point next month and possibly several times more by year's end.

Investors have been fleeing risk assets as they become worried that the tightening-to fight inflation at more than 40-year highs-will knock the pandemic economic recovery off course and dent companies' bottom line.

With earnings season under way, a close eye is being kept on what firms say about the impact on and the outlook for business in light of inflation, forecast rate hikes, supply chain snarls and the Ukraine war.