Africans are beginning to feel the impact of the economic repercussions of the Ukrainian crisis, with the price of fuel, grain, and fertilizer soaring on the continent, from Nigeria to Malawi, raising fears of exacerbating poverty.
Global oil prices rose to their highest levels in almost a decade, exceeding $100 a barrel shortly after Russia invaded Ukraine on February 24, dealing a heavy blow to many sub-Saharan companies.
Ukraine and Russia are major suppliers of wheat and cereals to Africa, while Russia is a major producer of fertilizers.
The impact of the war and Western sanctions on Russia has begun to translate into a rise in the prices of agricultural raw materials and imported grain, according to AFP offices spread across the African continent.
For baker Julius Adewale from Lagos, the fuel price crisis is a disaster. Nigeria’s fragile electricity grid has recently been providing the population with only a few hours of nourishment per day, forcing Adewali to rely on diesel-powered generators for power, but the price is rising.
“There has been no light since yesterday and we have been working with the generator’s electricity since yesterday,” Adewali said as bakery employees stacked loaves of bread.
“The cost of production has increased significantly,” he added.
Nigeria is Africa’s largest oil producer and largest economy, but it has little refining capacity.
The government subsidizes the cost of gasoline, but diesel and jet fuel are sold at market price.
Several local airlines have warned this hair that they are obliged to cancel several flights due to a shortage of fuel for aircraft.
Diesel used to sell for about 300 Nigerian naira (0.72 cents) a liter in Nigeria, but now it’s sold at 730 naira ($1.75) a liter.
“I don’t know how we will cope because 70 percent of the business is on diesel,” Lanre Bubola, regional president of the Nigerian Manufacturers Association, told local media.
“Some companies also work for limited hours on diesel because they cannot afford generators all day long,” he added.
‘War in Ukraine means hunger in Africa’
Amaka Anko, an analyst at the Euriga Group for political risk analysis, considers that, if the crisis continues, African countries that are major importers of fuel and grains will lose, while the exporters of these commodities will gain.
She points out that there are also debt-laden countries like Ghana that will struggle with higher borrowing costs as investors’ appetite for risk decreases.
Gas producers such as Tanzania, Senegal and Nigeria could benefit from Europe’s moves to end European dependence on Russian energy, says Daniel Resnick of the Brookings Institution.
But she considers that the immediate challenge is the suffering of African families, millions of whom struggle to secure their livelihood.
“The war in Ukraine means hunger in Africa,” International Monetary Fund Managing Director Kristalina Georgieva said on Sunday.
The price hikes will exacerbate food insecurity in conflict-ridden Ethiopia, where some 20 million people need food aid.
According to AFP offices, inflation is increasing in many parts of the African continent.
In Kenya, a sack of wheat flour now sells for 150 to 172 Kenyan shillings ($1.3 to 1.5), compared to less than 140 shillings in February.
Sub-Saharan Africa’s third-largest economy usually gets a fifth of its wheat imports from Russia and another 10 percent from Ukraine, according to the government.
In the Ugandan capital Kampala, the Ukrainian crisis has caused the prices of soap, sugar, salt, cooking oil and fuel to soar.
“Most of the basic commodities are produced locally, but some components are imported and their prices are determined by shocks in international markets,” Ugandan Finance Minister David Bhatti told AFP.
“My family of four spends an average of 5,000 shillings on food and essentials, but that is not enough anymore… I am now spending more than 10,000 shillings,” Retah Kabaku, 41, a shop assistant in Kampala, told AFP.
“Victims Whenever a War Breaks Out”
Wary of inflation caused by the crisis in Ukraine, the Central Bank of Mauritius raised the key interest rate to 2%, the first rise since 2011.
“It is unfortunate that, after the sky cleared after Covid-19, additional clouds appeared,” Mauritian Prime Minister Pravind Kumar Jugnauth said in a televised address.
In the Somali capital, Mogadishu, the prices of fuel, cooking oil, building materials and electricity have all risen.
“A week ago, a gallon of cooking oil from 20 liters was $25, today it is $50,” said merchant Muhammad Othman. The price of a liter of gasoline was $0.64 and today it is $1.80. It’s crazy.”
In southern Africa, the prices of bread and cooking oil in Malawi increased by 50%.
“This war does not concern us and it is not fair that we should pay such a high price,” said Vatsani Phiri, an auditor who was buying bread in the capital, Lilongwe.
“We cannot be victims whenever war breaks out somewhere in the world,” he added.