COVID-19 policy effects on Africa’s food markets

In countries in sub-Saharan Africa, including South Africa, Zimbabwe, Zambia, Malawi and Kenya where partial or nationwide lockdowns were implemented in response to the coronavirus disease (COVID-19) pandemic, the initial responses were met with some policy uncertainty and inconsistency as governments tried to adapt to a rapidly changing situation.

In Zimbabwe, high food inflation and shortages of basic commodities were, however, evident before the pandemic. Currency reforms that allowed a multicurrency system were one of the response measures implemented to alleviate the negative impact of inflation and food shortages. The government also implemented price controls. With 90% of Zimbabwe’s food system going through informal supply chains, COVID-19 restrictions, which initially affected informal markets, saw farmers creating new marketing channels to directly supply poorer and marginal communities.

In Zambia, COVID-19 restrictions are likely to put pressure on prices of major food imports aimed at increasing fresh produce, in particular, due to low volumes on the local market. With livestock feed also a key import, Zambia is expected to start experiencing increases in meat prices. The depreciation of the Zambian kwacha is putting considerable cost pressure on food security in the long term. Staple grain prices, however, will remain stable as the country enters the summer crop harvesting season.

In Malawi, COVID-19 restrictions negatively affected trade, largely in parts of the country’s food system that is dependent on processed food imports. Malawi experienced a demand surge in food after a wave of panic buying led to food shortages in local supermarkets.

Civil society organisations brought an injunction against the government’s lockdown policy, with the case still having to be heard in the constitutional court at the time of writing. This has created some policy uncertainty, and a court ruling in favour of the government could likely trigger another wave of panic buying that could lead to short-term price spikes. However, given the harvest season, staple food prices are expected to remain stable over the long term.

In Kenya, stay-at-home regulations saw a positive uptick in food demand at household level. Food prices have remained relatively stable, and there are no signs of empty shelves in supermarkets yet in key urban markets. Local markets has benefitted from a slowdown in Chinese fish imports.

However, concerns remain about the negative impact of floods and a second wave of locust invasions that are threatening to wipe out crops. The risk of worsening food insecurity could trigger additional measures such as export bans and the relaxations of genetically modified maize restrictions. Current COVID-19 restrictions at ports are slowing down imports, and these could potentially be amended to facilitate imports.

IN SA, THERE HAVE BEEN SOME DISRUPTIONS IN THE FOOD SECTOR

SOUTH AFRICA

In South Africa, parts of the formal and informal food systems remain functional, with the food services industry completely shut in the first phase of a nationwide lockdown. Disruptions in the food system are prevalent, but not severe, and firms have been able to manage these in the short term.

The second phase of the lockdown coincided with exemptions on beef, wool, and cotton auctions, but a ban on alcohol and cigarettes was maintained. Quick service restaurants opened up under ‘Level 4 Lockdown’ to allow take-away services.

Overall, policy responses to COVID-19 in sub-Saharan Africa have largely spared informal food systems on humanitarian grounds and to strengthen food security. In South Africa, the informal food system accounts for up to 30% of the total food sales. However, the share of the informal supply chains is much larger in other countries in sub-Saharan Africa. So far, informal supply chains have proved to be resilient and versatile, but remain uniquely fragile. It is therefore imperative for informal food systems to evolve and adapt to enhance their resilience in the future.

GLOBAL INSIGHT BY DR TINASHE KAPUYA Dr Tinashe Kapuya is the Value Chain Lead at the Bureau for Food and Agricultural Policy. Email him at tinashe@bfap.co.za.