The Echoes of Conflict: Analyzing the Potential Impacts of the Russia-Ukraine War on Africa

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M'boueke, Samson
Gurara, Daniel
Ngui, Dianah
Shimeles, Abebe
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African Economic Research Consortium
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.