The Ukraine Crisis Impacts Africa too
Amb Gurjit Singh

The Russian ‘special military operations’ in Ukraine, starting 24 February,with the intention of making Ukraine amenable to Russian rather than NATO overtures, has created a crisis in Europe. Besides the rising oil and gas prices it is creating a backlash in global economies. The negative impact on growth rates as well as prospects of stable development for the post-pandemic recovery is perceptible.

Africa seems far from the scene of action and held its summit with Europe in February even as the crisis was building up. Now, besides the rise in energy prices there is a real impact on wheat and sunflower oil prices in the main. A serious impact on Africa is anticipated.

The AU-EU Summit spoke about ‘A prosperous and sustainable Africa and Europe’ and announced an Africa-Europe Investment Package of Euro 150 billion to support a joint objective for 2030 to fulfil Africa’s Agenda 2063. The investment is to build diversified, inclusive, sustainable and resilient economies. It is unlikely that they thought of agricultural food support in real terms.

The reaction of African countries to the Russian action is interesting. South Africa, a BRICS partner of Russia, was muted in 2014 when Crimea was annexed.Now it has called for restraint and to avoid violent conflict. It sought action by the UN Security Council to play its role. In the UNSC the three African members cohesively supported the Western-led resolution against Russian action. Kenya was the most eloquent. Gabon and Ghana voted in unison.

The African Union also spoke about ending the conflict. The current Chair of the African Union, Senegal President Macky Sall, and the Chairperson of the African Union Commission, Moussa Faki Mahamat, expressed ‘concern at the very serious and dangerous situation created in Ukraine’. Many African countries remain mute due to ‘growing security links with Russia.

The Russian Wagner group operates in several African countries like Libya, Central African Republic (CAR) and Mali. It is reported that these groups have been recalled to Russia for operations in Ukraine. The Wagner group emerged from the crisis in Crimea. Their pull-out may impact the perceived security of several African countries.

The voting by African countries in the UN General Assembly (UNGA) was less cohesive than in the UNSC. Of the 54 African members of the UNGA 17 abstained including Angola, Burundi, Senegal, South Sudan, South Africa, Tanzania, Uganda, Namibia, Mali and Mozambique, Morocco, Ethiopia, Cameroon, Guinea, Togo and Guinea-Bissau and did not participate in the vote raising the real abstentions and absence to 23, a whopping 42%. Five countries totally voted with Russia including Eritrea from Africa. Opposing Russia were Kenya, Ghana, Gabon, Rwanda, Djibouti, Congo, Somalia and the Democratic Republic of Congo. These do not show any definite trend as counties from the same region voted diffenrtly. South Africa abstained, Nigeria and Egypt supported the resolution; Ethiopia was absent. African Union Chair Senegal abstained as did incoming Chair of the Non-Aligned Movement Uganda.

Globalisation has consequences and no more is European conflict insulated from causing tremors among developing countries.

The trade of agricultural commodities between Africa and Ukraine and Russia is significant. In 2020, African countries imports of agricultural produce from Russia was $4 billion 6% of this was sunflower oil and 90% wheat. These two commodities are the bulk of Russian agricultural exports to Africa. Half these exports were to Egypt. Other major importers were Sudan, Nigeria, Tanzania, Algeria, Kenya and South Africa.

Ukraine, which is also a significant global player in agricultural commodities, exported about $3 billion of agricultural produce to Africa in 2020. 48% of this was wheat, 31% corn. About 20% of its exports to Africa were sunflower oil, soya bean and barley.

Russia produces about 10% of the world’s wheat, while Ukraine grows 4%. These are not well recognised facts and thus their impact is invisible. Together they rival the combined wheat production within the European Union (EU). EU wheat production in 2022 is 125 million tonnes, 2.7% lower than 2021. Russia as the world’s largest wheat exporter has a share of 24% among the top 20 exporters. Ukraine has a share of 9% and is globally the 5th largest exporter.

The exports from Ukraine and Russia in 2020 were about 26% of global wheat exports with Russia exporting 18% and Ukraine 8%. Where corn is concerned. Russia and Ukraine together produce about 4% of global production but have a larger share of exports due to lower domestic demand. Their combined exports are 14% of total world exports in 2020.

Similarly, forsunflower oil, Ukraine, exports accounted for 40% of world exports and Russian exports were 18% of the world's sunflower oil trade. The disruption of this could cause significant problems in the wheat, sunflower and maize trading in the world.

Even prior to the breakout of the conflict, international commodity prices were already increasing. Africa which is an overall importer of wheat, sunflower oil and many other commodities is worried that this conflict and disruption comes even as drought threatens several regions of Africa. This could create food inflation at a time when the continent is struggling to get back its dynamism in a post pandemic phase. In January 22, the FAO food price index had increased by 1%. From December 2021 It now reached an average of 136, which is the highest level since April 2011.

Oil seeds-based extractions and dairy commodities were mainly the cause for this increase, but now maize, wheat, soybean and sunflower are all showing increases of 10% to 25% over last year.

For Africa, therefore, the agricultural impact of the Russia-Ukraine conflict will be immediately felt as world agricultural prices increase. The shortage of wheat and sunflower oil in the main and possible blockages in the Black Sea ports will lead to a run on these commodities. China, India, West Asia will become important buyers who will try and assuage the price risks.

This will particularly impact Africa whose dependency on imported food grains has been a problem for many years. Traditional wheat exporting countries such as the US, Australia and Canada will benefit but will need to step up to meet African demand. Even if the conflict is controlled soon, the impact of rising prices and trade disruption is likely to have a longer-term effect.

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>


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