Looming food crisis getting scarier as IMF, WB, AfDB warn Ghana and others
Adnan Adams Mohammed
The rate at which the Bretton Wood institutions and regional blocks are warning of looming food crisis in Ghana and other African countries is becoming scarier.
This is based on the fact that, within the past two weeks; the World Bank Group, International Monetary Fund (IMF), African Development Bank and other regional block institutions have consistently warned against food crisis in Ghana, Africa and other part of the world, especially the developing countries.
Last week, the World Bank indicated that, the world faces a “human catastrophe” from a food crisis arising from Russia’s invasion of Ukraine. The Bank is worried at the rate in which food prices are rising, saying it would push hundreds of millions of people into poverty and lower nutrition, if the crisis continues. The World Bank calculates there could be a “huge” 37% jump in food prices (inflation). But, the IMF has been blunt on the food crisis issue, alarming a direct warning to Ghana and other African countries, justifying that, Russia’s invasion of Ukraine has pushed food and energy-related commodities to record levels on the global market.
“Together, these factors will disproportionately hurt the poor, especially in urban areas, and will increase food insecurity”, IMF worried in its Regional Economic Outlook Report released last week.
The report maintained that, food prices, which account for about 40 percent of consumer spending in the region, are rising rapidly.
The Fund estimates that, around 85% of Africa’s wheat supplies are imported. Higher fuel and fertiliser prices also affect domestic food production. This, IMF is worried could hurt economies in the region already struggling, like Ghana, whose economy is already on its knees.
This calls for emergent measures and actions to immediately put in place buffers to avoid the history of 1983 repeating itself. The ‘hunger of 1983’ was devastating according to historians such that it necessitated a food rationing among the population.
Already, Ghanaians are witnessing a record high inflation spurred by leapfrogging food inflation. According to the Ghana Statistical Service (GSS) reported that, March 2022 inflation hit the highest in nearly 13 years to record 19.4%.
“The higher inflation was pushed largely by food prices”, the Government Statistician announced fortnight ago.
According to the figures, food inflation recorded a rate of 22.4% in March 2022, compared to 17.4% in February 2022. Stapple (commonly consumed)0 foodstuffs such as: Oil and Fats (28.2%), Water (27.1%), Cereal Products (25.0%), Vegetables (23.8%), Fish and Other Seafood (23.7%), Fruits and Nuts (22.1%), Soft Drinks (20.5%), Live Animals, and Meat (20.2%) recorded inflation rate, higher than the national average.
Consequently, the Group President of African Development Bank, Dr Akinwumi Adesina, last week, passionately indicated that “Africa must prepare for the inevitability of a global food crisis” while speaking about Africa’s priorities, as a guest at the Atlantic Council’s Africa Center, fortnight ago.
The AfDB chief called for an increased sense of urgency amid what he described as a once-in-a-century convergence of global challenges for Africa.
The continent’s most vulnerable economies had been hit hardest by conflict, climate change and the Covid-19 pandemic, which had upended economic and development progress in Africa. According to the AfDB, Africa, with the lowest GDP growth rates, had lost as many as 30 million jobs on account of the pandemic.
Highlighting the impact of the Russia-Ukraine war on Africa, Adesina noted that, the war’s ramifications spread far beyond Ukraine to other parts of the world, including Africa. He explained that Russia and Ukraine supply 30% of global wheat exports, the price of which has surged by almost 50% globally, reaching identical levels as during the 2008 global food crisis. He added that fertilizer prices had tripled, and energy prices had increased, all fueling inflation.
“Tripling costs of fertilizer, rising energy prices, and rising costs of food baskets, could worsen in Africa in the coming months. 90% of Russia’s $4 billion exports to Africa in 2020 was made up of wheat; and 48% of Ukraine’s near $3 billion exports to the continent was made of wheat and 31% of maize.
“To fend off a food crisis, Africa must rapidly expand its food production.”
The African Development Bank is already active in mitigating the effects of a food crisis through the African Food Crisis Response and Emergency Facility – a dedicated facility being considered by the Bank to provide African countries with the resources needed to raise local food production and procure fertilizer.
“My basic principle,” Adesina said, “is that Africa should not be begging. We must solve our own challenges ourselves without depending on others…” The Bank chief spoke about early successes through the Bank’s innovative flagship initiative, Technologies for African Agricultural Transformation (TAAT) program, a program operating across nine food commodities in more than 30 African countries.
TAAT came to the rescue during the drought in southern Africa in 2018 and 2019, deploying heat-tolerant maize varieties which were cultivated by 5.2 million households on 841 thousand hectares. As a result, he said, farmers survived the drought in Zimbabwe, Malawi and Zambia, allowing maize production to expand by 631,000 metric tons to a value of $107 million.
TAAT has helped to rapidly boost food production at scale on the continent, including the production of wheat, rice and other cereal crops. TAAT has already delivered heat-tolerant varieties of wheat to 1.8 million farmers in seven countries.
“We are putting our money where our mouth is. We are producing more and more of our own food. Our Africa Emergency Food Production Plan will produce 38 million metric tons of food.”
According to Adesina, wheat-tolerant varieties were now being planted across hundreds of thousands of hectares in Ethiopia and Sudan, with extraordinary results. In Ethiopia, where the government has put the TAAT program to work in a 200,000-hectare lowland irrigated wheat program, farmers are reporting yields of 4.5 to five times per hectare. Adding that, TAAT’s climate-smart seeds were also thriving in Sudan, which recorded its largest wheat harvest ever – 1.1 million tons of wheat – in the 2019-2020 season.
The Pan-Africanist called for urgent and timely need for a strong replenishment of the African Development Fund – the Bank Group’s concessional lending arm that supports low-income African countries. He said the Fund has connected 15.5 million people to electricity and supported 74 million people with improved agriculture; it has provided 50 million people with access to transport; built 8,700 kilometers of roads; and provided 42 million people with upgraded water and sanitation facilities.
World Bank president, David Malpass, in an interview with BBC economics editor Faisal Islam fortnight ago also warned of a knock on “crisis within a crisis” arising from the inability of developing countries to service their large pandemic debts, amid rising food and energy prices.
“This is a very real prospect. It’s happening for some countries, we don’t know how far it’ll go. As many as 60% of the poorest countries right now are either in debt distress or at high risk of being in debt distress,” he said.
“We have to be worried about a debt crisis, the best thing to do is to start early to act early on finding ways to reduce the debt burden for countries that are on have unsustainable debt, the longer you put it off, the worse it is,” he added.