From rising fuel and food prices to inflation and supply chain disruptions, the Russia-Ukraine war, since escalating on February 24 2022, has taken its toll on Africa's economies and food systems, with varying implications for rural and urban populations across various commodity sectors.
In response to the conflict and its impact on African countries, AKADEMIYA2063 has developed a comprehensive research series to provide evidence-based simulations on the ramifications of the crisis. Hinged upon data, analytics, and past crisis patterns, the AKADEMIYA2063 Ukraine Crisis Brief Series spans global market disruptions in country terms of trade, the resulting growth and employment effects, as well as poverty and food security impacts.
The in-depth analysis of AKADEMIYA2063 scientists primarily tackles (i) the sectoral effects of the crisis at the continental level, covering disruptions in the wheat, oilseeds and vegetable oils sectors and their effects on incomes, inflation, equally analyzing disruptions in the fertilizer sector and the impact on productivity, agricultural sector value added, incomes and food security, and (ii) the transmission of the global commodity price shocks to domestic markets, underscoring opportunities to expand regional trade in response the crisis.
The overall analysis takes a closer look at selected African countries due to their dependency on Ukraine, Russia, and Belarus (URB) in commodity trade, with a focus on ten countries, namely Benin, Ghana, Kenya, Malawi, Mozambique, Nigeria, Senegal, South Africa, Tanzania, and Uganda, in addition to Burkina Faso, Rwanda and Zimbabwe which serve as the basis for the discussion on price transmission.
A critical component of AKADEMIYA2063's research is the elaboration of policy implications which emerge from the analysis for each of the sectors mentioned above, fashioned to inform high-level decision-making and policy innovation toward Africa's economic recovery. For instance, an analysis of trading patterns indicates that while nearly all African countries face a more than 5 percentage point (pp) increase in the overall import price index, the change in the export price index is below the 5 pp mark for as many as 50% of African countries. This suggests that countries with the highest ratio of import/export price index changes and lower foreign exchange reserves will be under stronger financial duress. A key recommendation emerging from the analysis encourages the adaptation of policy responses that have worked under COVID-19 to provide some guidance in dealing with the effects of the Russia-Ukraine war.