The knock-on effects of the war in Ukraine risk plunging African states into a toxic spiral of debt distress, food and energy poverty, a senior UN official has told EURACTIV.
“Disruptions to supply chains in Russia and Ukraine will have pushed imported food prices beyond the reach of many, while the exorbitant price of fertiliser will limit the supply of homegrown foods,” United Nations Assistant-Secretary General Ahunna Eziakonwa said in an interview.
UN officials warned this week that global interest rates are likely to rise because the war affects inflation and economic activity. This could worsen Africa’s debt position and create a domino effect of defaults, particularly in countries whose debt repayments are due in 2022 and 2023.
In 2020, African countries imported $4 billion worth of agricultural products from Russia, 90% of which was wheat. Egypt is the world’s largest importer of wheat, with 80% of its wheat imports from Russia and Ukraine.
Russia’s President Vladimir Putin was quick to blame Western sanctions for the rising costs of energy and disruption to supplies of fertilisers.
“They will exacerbate food shortages in the poorest regions of the world, spur new waves of migration and drive food prices even higher,” Putin said at a food conference in Moscow on 5 April.
Supplies and prices of fertiliser from Russia and Morocco, the main exporters, are under heavy pressure as demand escalates.
Lack of fertiliser, now seen across west and central Africa, will cut productivity and yields and Eziakonwa warned that “the true impact of fertiliser shortages will be seen later in the year and next year.”
In South Africa, for example, fertiliser accounts for 35% of input costs.
“Higher global prices of fertiliser will reduce agricultural productivity, undercutting African countries’ ability to feed their citizens,” said Eziakonwa, pointing out that Russia is a major source of the ingredients used to produce fertilisers and that the war in Ukraine has already led to a 21% increase in the price.
“With costs of fertilisers set to increase even further, African countries face a catch-22 situation,” she added.
Having set out plans to strengthen economic and political ties with African states at a joint summit in February, EU officials are anxious to ensure that the EU does not lose the diplomatic battle in Africa.
The African Union has publicly condemned the Russian invasion of Ukraine but has shied away from introducing its own sanctions regime.
The European Commission is expected to ramp up the size of its €225 million fund for North African states hit by wheat and grain shortages.
The UN official played down the prospects of major economic and social gains being made from increased oil and gas exports from Africa to Europe, pointing out that increased inflation has mean that most low-income African households are now in energy poverty, or have no access to electricity.
“The rising demand for oil undoubtedly presents an opportunity for several African countries, many of which have significant reserves of natural and liquefied natural gas and could help to plug the gap, as Europe seeks to decrease its reliance on Russian energy,” Eziakonwa noted.
But she insisted that “investing and ramping up production and exportation of crude oil in Africa is a not a win-win situation”.
“It will have a devastating impact on Africa’s ability to realize its climate and sustainable development ambitions, setting back the transition to clean energy decades and increasing long-term dependency on polluting energy sources.”
“It is unacceptable that 600 million people in Africa do not have access to electricity – but the answer lies in a just energy transition, which achieves clean energy access for all,” she told EURACTIV.
The EU’s sudden demand for African oil and gas has prompted a change in approach. Prior to the Ukraine crisis, the European Commission had been encouraging African states to move away from fossil fuels towards investing solely in renewable and green energy.
“Ultimately, increasing the production of dirty energy will accelerate the climate crisis, and it will be the poorest and most vulnerable, many of whom live in Africa, who will be hit the hardest,” warned Eziakonwa.
[Edited by Zoran Radosavljevic]