How can rising food inflation be managed in sub-Saharan Africa?

Healthcare

Sharing is caring

March 30th, 2022

Higher food inflation has a disproportionate impact on poor families. It’s estimated that there were 264 million malnourished people in the region in 2020.

 

By

Senior Economist, IMF


 

  • Rising food prices are a key driver of inflation in sub-Saharan Africa.
  • Food cost inflation hit 11% in October 2021, ending a period of stability.
  • Higher food prices have a disproportionate impact on poorer households.
  • There were an estimated 264 million undernourished people in sub-Saharan Africa in 2020.
  • Targeted social assistance and insurance are critical measures to boost food security for malnourished people.

 

Inflation is rising around the world. In sub-Saharan Africa, one item is driving the trend more than others: food prices. Food accounts for roughly 40 percent of the region’s consumption basket—a measure of goods and services used to measure consumer price index (CPI) inflation.

 

Food inflation increased throughout 2019, on average, across 20 countries in the region where monthly food price data are available. After remaining stable around 9 percent (year over year) since the beginning of the pandemic, food inflation started to rise again from April this year to some 11 percent in October. The chart below shows how food inflation is outpacing and contributing to the pick-up in overall consumer price inflation in sub-Saharan Africa, which rose to about 9 percent in October, up from around 6 percent in 2019.

 

How can rising food inflation be managed in sub-Saharan Africa?

 

On a global scale, the recent increase in food inflation is attributed to rising oil prices (which raise fertilizer prices and transportation costs), droughts and export restrictions imposed by some major food exporters, and stockpiling in some countries. In addition, pandemic containment measures disrupted production and imports of seeds and fertilizers and caused labor shortages during planting seasons. Importantly, there is diversity across the region—food inflation in Chad is near zero but around 30 percent in Angola. This suggests that domestic factors such as weather and exchange rates are important contributors to food inflation in sub-Saharan African countries.

 

The outlook is highly uncertain. Food inflation and CPI inflation could moderate if commodity prices ease and pandemic-induced global supply chain disruptions resolve. However, high food inflation could persist if inflation expectations become de-anchored or supply chain disruptions continue. Regionwide, average inflation is expected to edge up in 2021 before easing next year depending on commodity prices and the resolution of supply-demand mismatches.

 

Higher food inflation would worsen the situation for the countries already facing food insecurity and shortages with a disproportional impact on poor households. The number of undernourished persons in the region is projected to have increased by 20 percent in 2020, encompassing 264 million people.

 

Fighting food insecurity through targeted social assistance and insurance can help populations cope. Avoiding trade barriers and improving access to finance, seed stocks, insecticide, fertilizer, anti-erosion measures, and irrigation is also important.

 

The figures for the number of countries and corresponding inflation rates were changed several hours after initial publication to update earlier data presented.

 

 

This article was originally published by World Economic Forum, on December 16, 2021, and has been republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License. You can read the original article here. The views expressed in this article are those of the author alone and not of the WorldRef.


 

Explore WorldRef services to learn how we are making your global business operations easier and more economical!

Wind Power Plant | Hydro Power SolutionsEnergy Audit | Thermal Power & Cogeneration | Electrical Systems | Services for Sellers  |  Free Industrial Sourcing   |  Industrial Solutions  |  Mining & Mineral Processing  |  Material Handling Systems  |  Air Pollution Control  |  Water & Waste Water Treatment  |  Oil, Gas And Petrochemicals  |  Sugar And Bioethanol  |  Solar Power  |  Wind Power Solutions