The International Monetary Fund has said higher food prices as a result of the Russia-Ukraine war might cause unrest in Nigeria, other Sub-Saharan Africa countries, Latin America, the Caucasus, and Central Asia.
It added that food insecurity is likely to increase in parts of Africa and the Middle East. It disclosed this in a blogpost titled, ‘How War in Ukraine Is Reverberating Across World’s Regions.’
It said, “Steeper price increases for food and fuel may spur a greater risk of unrest in some regions, from Sub-Saharan Africa and Latin America to the Caucasus and Central Asia, while food insecurity is likely to further increase in parts of Africa and the Middle East.”
According to it, record wheat prices as a result of the war are concerning for Nigeria, and other sub-Saharan Countries as the region imports 85 per cent of its wheat supplies, with one-third coming from Russia or Ukraine.
The Washington based lender added, “Just as the continent was gradually recovering from the pandemic, this crisis threatens that progress.
“Many countries in the region are particularly vulnerable to the war’s effects, specifically because of higher energy and food prices, reduced tourism, and potential difficulty accessing international capital markets.
“The conflict comes when most countries have minimal policy space to counter the effects of the shock. This is likely to intensify socio-economic pressures, public debt vulnerability, and scarring from the pandemic that was already confronting millions of households and businesses.
“Record wheat prices are particularly concerning for a region that imports around 85 per cent of its supplies, one-third of which comes from Russia or Ukraine.”
It said the entire global economy would feel the effects of slower growth and faster inflation. According to it, higher prices for commodities like food and energy will push inflation up, and erode the value of incomes.
The IMF said, “Russia and Ukraine are major commodities producers, and disruptions have caused global prices to soar, especially for oil and natural gas. Food costs have jumped, with wheat, for which Ukraine and Russia make up 30 per cent of global exports, reaching a record.”
It added that Africa and the Middle East may benefit from high oil prices. Although it said, economies dependent on oil imports will see wider fiscal and trade deficits, with more inflation pressure.
The report also added, “Beyond global spillovers, countries with direct trade, tourism, and financial exposures will feel additional pressures. Economies reliant on oil imports will see wider fiscal and trade deficits and more inflation pressure, though some exporters such as those in the Middle East and Africa may benefit from higher prices.”