The Russia Ukraine crisis no doubt is having a far reaching effect globally, but Africa appears to be the most affected. From the soaring cost of food prices to the increase in price of crude oil at the International market, the entire globe including the wealthy countries of the West seem to be cut up in the web of the crisis.
Global Rise in Commodity Prices:
The severity of the Russia Ukraine conflict is hitting hard on global commodity prices such as food and other essential commodities including crude oil, thus exposing humanity to imminent hunger and starvation. This has therefore continued to send prices of grains, cooking oils, fertiliser etc to unimaginable height with Africa being the most affected.
The Economic Intelligent Unit, EIU in its Global Outlook reports that oil prices will remain above $100/barrel for as long as the conflict rages on. The soaring oil price at the International market has continued to impact negatively on the subsidy regime of countries that are unable to refine their crude oil such as Nigeria. “the most serious effect of the crisis on the World Economy will be higher commodity prices as supplies will exacerbate existing market tightness” according to the Economic Times.
Already, Europe is reducing its demand for Russian gas, which will lower Russian output and put further pressure on supplies according to Agarthe Demarais, EIU’s Global Forecasting Director.
Global Grain and Wheat Supply:-
According to an online report, more than a quarter of global wheat exports come from Russia and Ukraine. Wheat is the second most produced grain in the World after corn and it is reported that Russia is the world’s largest exporter of wheat, accounting for more than 18% of International exports.
In 2019, it was estimated that Russia and Ukraine together exported more than a quarter (25.4%) of global wheat consumption as reported by Observatory of Economic Complexity (OEC), as another report by Ukraine’s Ministry of Agriculture rightly stated that about 40% of the World Food Programme’s Wheat supplies come from Ukraine and due to the ongoing Russia invasion of that country, approximately 22 million tons of grain are stranded in Ukraine awaiting export.
First Grain Ship Leaves Ukraine Waters:
Although, the breaking news of the first ship carrying grains from Southern Port of Odesa on Monday 1, August, 2022, since Russia’s blockade of Ukraine Ports on February, 2022, following the agreement from both sides to resume shipments is expected to ease global food crisis and lower price of grain, Africa needs to create its own solutions to global crisis.
A wake–up call:-
A United Nation Development Programme (UNDP) on the impact of the War in Ukraine on sustainable development in Africa’s economies shows that the situation is indeed complicated and diverse. This is coming at a time Africa’s economies are struggling to recover from the effect of the Covid 19 pandemic.
Given that the most visible impact of the Russia Ukraine crisis on Africa is the rising fuel and food prices including inflation and financial instability, the poorest of the poor remain the most vulnerable as large proportion of their consumption expenditure is on food and transportation.
The UN’s Global Crisis Response Group on Food, Energy and Finance predicts a Global cost of living crisis transmitted through rising food prices, rising energy prices and tightening financial conditions. A Global response especially in Africa is therefore urgently needed to bring stability to the commodity markets as well as address the rising cost of debt and also increasing the capacity of the people to cope amongst other solutions which is as follows:-
Prioritising Structural Reforms and Transformation of Africa’s Agricultural Sector:
This can only be carried out through aggressive formulation and implementation of policies and programmes that will enhance its self sufficiency in food production. The revitalisation of the continent’s ailing Agricultural sector should include liberalisation and investment in technology that will boost production.
Also, regional strategic grain reserves and more efficient trade across Africa’s borders can help mitigate the risk of food insecurity. It will also help to make foods and other goods easily accessible and affordable and for export purposes.
Annexing Europe’s Energy Market:-
The conflict between Russia Ukraine is already opening doors of ample opportunities for Africa countries with the Energy potentials to tap into Europe’s viable energy market.
Some Africa energy giants of Algeria, Niger and Nigeria are already making frantic moves by discussing pipeline to Europe. Accessing energy market of top global industrialised economies will enhance Africa’s growth through earnings from gas.
However, several countries with spare capacity are positioning to ramp up their production of oil and gas to meet market shortfalls.
Investment in Clean and affordable energy, technology and financing Micro, small and medium enterprises:-
This will go a long way at addressing the root cause of poverty and inequality and help to reduce the effect of any likely global crisis in the future.
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