Inflation fuelled by Ukraine war ‘may lead to unrest in Africa’

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

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 pandemic, security risks in several countries and the challenges posed by climate change.”

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

The head of the IMF’s African department, Abebe Aemro Selassie, said he was “very worried” by the twin impact of food and higher fuel costs – something 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. 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 Organisation surged 12.6% between February and March, reaching their highest levels since the index was launched in 1990, the UN’s agency said. The previous record high was set in 2011.

The IMF report placed the spotlight on the price of wheat. Africa is dependent on imports for 85% of its wheat consumption and this dependence is especially high in Tanzania, Ivory Coast, Senegal and Mozambique. In Botswana, Lesotho, Mauritius and Cape Verde, imported wheat, rice and maize, account for more than 40% of calorie intake, the IMF said. –