Since 2015, West Africa’s meals safety has deteriorated: The variety of folks affected by malnutrition elevated from 11.5 p.c in 2015 to 18.7 p.c in 2020, totaling 75.2 million folks. Now, the area, like the remainder of the world, is feeling the results of Russia’s warfare in Ukraine, which embody rising meals costs and market disruptions for cereals and different commodities resembling fertilizers and fuels. What are a few of the doubtless penalties of the warfare in West Africa?
Rising world costs pose the best menace general. With a couple of exceptions, the area imports little or no meals or fertilizer from Russia and Ukraine, insulating it from lots of the present market disruptions and permitting it to exchange some misplaced fertilizer imports.
Commodity Markets in Turmoil
The FAO meals worth index had already reached an all-time excessive of 140.7 in February 2022, earlier than the battle started, as a result of rising costs for vegetable oils, dairy merchandise, and grains. Prices are actually skyrocketing as Russia and Ukraine export a big portion of the world’s cereals, significantly wheat, and the battle disrupts markets for fuels and different commodities. International fertilizer costs, for instance, have risen dramatically: the value of urea, for instance, has doubled from its 2015-2019 common in February 2022.
Indeed, cereals, sugar, vegetable oils, meat, and animals are imported from West Africa, whereas cocoa, cotton, peanuts, fish, and fruits are exported. From January 2020 to February 2022, the costs of palm oil, sugar, wheat, and hen meat elevated, whereas the costs of bananas, cocoa, and groundnuts remained secure. On the agricultural entrance, the one excellent news is that the value of rice (imported) has remained secure (although worldwide worth volatility has lately elevated), and the value of cotton (exported) has risen.
Outside of agriculture, the area advantages from rising commodity costs as a result of it exports a wide range of uncooked supplies, together with gold, tin, oil (which accounts for greater than half of the area’s export earnings), copper, pure gasoline, uranium, zinc, and aluminum.
Evolution of Key Commodity Prices for West Africa
Of course, the results of those varied market shifts on native populations will likely be influenced to some extent by authorities insurance policies. Increases in commodity costs can solely compensate for will increase in agricultural and meals costs if there are redistribution mechanisms in locations, resembling utilizing revenues from mining rents to fund meals subsidies or different types of help. Increased costs are particularly problematic for city households, that are extra reliant on imports like wheat.
Fertilizer imports from Russia, the Economic Community of West African States (ECOWAS) second-largest provider with 12% of the market, are additionally in danger for West African farmers. It is, nonetheless, an opportunity for regional suppliers.
Nigeria, initially, has the power to exchange the lacking imports. Indorama Nigeria and the Dangote Group have invested closely within the fertilizer sector, making the most of the nation’s giant pure gasoline reserves.
Morocco, which provides a 3rd of the ECOWAS fertilizer market, lately invested $1 billion in Nigeria to assemble two phosphate vegetation (capability of 1 million tonnes every). Except for Nigeria, the seven main West African international locations for which knowledge is out there (Burkina Faso, Cote d’Ivoire, Ghana, Mali, Niger, Senegal, and Togo) import solely about 0.24 million tonnes of fertilizer from Russia. Nigeria has the capability to appropriate this imbalance: Dangote has a 3 million tonne capability, Indorama has a 1.4 million tonne capability, and Nigerian consumption is only one.5 million tonnes.
Other forms of fertilizers, however, face challenges. West Africa imports 82 p.c of its potassium, and the overwhelming majority of imports—80 p.c—come from Belarus and Russia for Cote d’Ivoire, Mali, Niger, Senegal, and Sierra Leone. Percentage of the Russian Federation and Belarus in potassium fertilizer imports by nation (West Africa)
Finally, the provision of fertiliser to farmers varies significantly from nation to nation. Only market mechanisms play a task in some international locations, and worth will increase must be felt fully by farmers. In others, the price is borne largely by state budgets by means of subsidy programmes (Nigeria, Ghana, Togo).
The financial penalties of the Russia-Ukraine disaster are overlapping with these surrounding Mali’s coup in 2021. As a end result, the Economic Community of West African States (ECOWAS) has twice imposed an embargo on the nation, successfully closing its borders to all member states aside from commerce in fundamental requirements.
The Malian authorities has retaliated on two events. Some Malian industries, resembling livestock and meat, had already made it unlawful for his or her members to export inside the ECOWAS bloc. Because Mali is among the area’s important livestock suppliers, the suspension of Malian exports has induced market tensions in some international locations, significantly within the meat sector. Meat costs in Dakar, Senegal, have elevated by 25% to 30% for the reason that newest retaliation.
The financial fallout from regional tensions in West Africa, in addition to the Russia-Ukraine state of affairs, exemplifies the perilous hyperlinks that exist between diplomatic sanctions, commerce, and meals safety. These conditions are nonetheless unfolding. Under EU regulation and the United Nations Convention on Trade in Landlocked Countries, Mali is contesting the legality of the embargo.
The present state of affairs poses a problem for ECOWAS, which should keep away from taking actions that jeopardise regional meals safety, which is already weakened by the pandemic disaster. Intra-ECOWAS agricultural and meals commerce must be facilitated somewhat than hampered by export restrictions or embargos; in the remainder of the world, a discount of the widespread exterior tariff, which is already low on meals merchandise, in addition to redistributive measures to assist poor households, must be thought of.