Impact of War in Ukraine

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    Maputo Corridor, Regional and Continental Integration to Mitigate Food Insecurity from Russia-Ukraine Trade Shocks
    (African Economic Research Consortium, 2023-11-06) Ngepah, Nicholas
    In statistical analyses, food insecurity is usually seen as an outcome of agricultural supply-side and demand-side; demographical factors; and economic condition. The underlying study extends this model to include international trade in food and food-production inputs. It applies appropriate analytical methods to data from United Nations Conference on Trade and Development and Food and Agricultural Organisation Statistics to derive the current findings and policy proposals.
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    Impacts of the Ukraine Crises on Food Security in Kenya and Ethiopia: Options for Regional Trade Collaboration
    (African Economic Research Consortium, 2023-10-06) Geda, Alemayehu; Philliph, Musyoka Michael
    Global economic growth suffered a slowdown from two consecutive crises- Covid-19, which intensified in 2020, and the Russia-Ukraine crisis in 2022. With the effects of Covid-19 still lurking, the Russian-Ukraine crisis started in February 2022, disrupting international oil trade, agricultural inputs and food commodities, especially cereals, with outcomes that most likely put countries a step away from achieving Zero hunger by 2030. The African countries had modest effects from the Russian-Ukraine crisis; the effects have been both through non-agricultural (oil) and agricultural imports - especially fertilizers, wheat and wheat products. Global wheat prices immediately after the start of the crisis shot up from US$ 8 per bushel in March to US$ 11 per bushel (37.5% increase) and remained high through June 2022. It has since subsided to pre-crisis levels, but the effects on food security and welfare are still being felt. The spike in global wheat prices was occasioned by Russia’s blockade of Ukraine’s grain exports, jolting the global supply in the international market. Russian-Ukraine war is still on, a year after, and most likely, the effects on food security and welfare are still manifesting (the recent Russian termination of the ‘Black Sea Grain Initiative; being a case in point). There could also be indirect effects through the rising fertilizer, which affects food welfare from the supply and cost side. This policy brief draws insights from a study on the impacts of the Russia-Ukraine crisis conducted between January and June 2023.
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    The Echoes of Conflict: Analyzing the Potential Impacts of the Russia-Ukraine War on Africa
    (African Economic Research Consortium, 2023-10-06) M'boueke, Samson; Gurara, Daniel; Ngui, Dianah; Shimeles, Abebe
    The recent Russia-Ukraine conflict has brought to the forefront the intricate links and dependencies within global economies. In 2019, Russia stood as the world's third-largest energy producer and was responsible for roughly one fifth of global fertilizer exports. Furthermore, in 2021, both Russia and Ukraine together accounted for 30% of global wheat exports. Given the significant reliance of around fifty countries, especially food-deficient nations in Africa and Asia, on Russia and Ukraine for over 30% of their wheat supply, the ongoing war poses substantial risks. Disruptions in wheat, fertilizer, crude oil, and edible oil supplies can have cascading effects, impacting inflation and growth trajectories across these countries. Specifically, fuel and food grain prices form over one-third of the consumer price index in many African countries. The crisis has already manifested in trade disruptions, surges in food and fuel prices, macroeconomic instability, and heightened security challenges.Our study analyzes the potential repercussions of the war on 44 African nations, focusing on the resulting surges in global prices of food, oil, and fertilizers. The findings project that following these price shocks, most African countries will grapple with challenges like deterioration in commodity terms of trade, rising consumer price inflation, declining real GDP, and a weakened domestic purchasing power of the U.S. dollar. Such impacts could persist for over 3 years. While emphasizing Africa's susceptibility to global commodity price shifts, the study also spotlights a significant opportunity: the potential for Africa to pivot towards reduced import dependency and champion self-sufficiency in key sectors. This narrative underscores the broader implications of global disturbances on African economies and the pressing need for a more resilient economic trajectory.