Africa Finance Forum | Disruptions in Global Agribusiness Supply Chains: Impact in Africa and Need for Collaborative Action

Corporate Council on Africa

presents

Disruptions in Global Agribusiness Supply Chains:

Impact in Africa and Need for Collaborative Action

 

Date and Time:

Wednesday, April 20, 2022

3:30 - 5:00 pm (EDT)

Venue:

DLA Piper

500 8th Street, NW

Washington DC

(One Block from Gallery Place Metro - Red/Green Lines)

This is an in-person only event - no virtual option available

African countries, which continue to be impacted by the COVID pandemic, are now faced with another economic shock from the war in Ukraine. Increases in global commodity prices, and especially oil which rose above decade-long highs of more than $100 a barrel shortly after Russia invaded Ukraine on February 24, are inflicting heavy costs to many African governments, their agricultural sectors, farmers, and vulnerable food-dependent citizens.

The conflict in Ukraine is severely impacting food security globally, and especially in many African countries that rely on key agricultural imports. Russia and Ukraine are among the top exporters of wheat (almost one-quarter of global wheat exports) as well as barley, sunflowers, and maize while Russia is a key producer of fertilizer. But war-induced disruptions in the agricultural sector in Ukraine and heavy economic sanctions on Russia are raising the price of wheat, fertilizer, and other agricultural products.

Rising consumer prices are likely to impact the countries that are most heavily dependent on agricultural imports from Russia and Ukraine. African countries imported agricultural products worth $4 billion from Russia in 2020. Wheat accounted for nearly 90% of imports, while sunflower oil accounted for 6%. Egypt accounted for nearly half of these imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya, and South Africa.

Russia is the third largest exporter of potash, a key ingredient in fertilizer, after Canada and Belarus. Fertilizer prices in Kenya have doubled from about $30 a bag last year to roughly $60 a bag today. Farmers in Kenya's agricultural zones are complaining that this dramatic increase will significantly push up their production costs. This will likely lead to smaller crop yields, further impacting food prices, food security, fueling social and political tensions. The hike in fuel prices will impact the ability of African farmers to use farm machinery and transport. This will further reduce their ability to grow sufficient crops this year. Africa's hundreds of millions smallholder farmers, who already face challenges in accessing and using the latest and best technology to increase productivity, are now being hit by increased global commodity prices.

All this is happening at time when countries in the East Africa and Horn regions are facing food insecurity due to low rainfall. The United Nations estimates that 20 million people in Ethiopia, Kenya, Somalia, and Djibouti face hunger due to the longest drought in four years, which has killed livestock and ruined harvests. There is a strong probability that this conflict will have negative and long-lasting multiplier effects on African economies and impede their efforts to relaunch as most governments no longer have the fiscal space to retain or even expand the safety net.



As was the case in addressing the impact of the COVID-19 pandemic on Africa, there is a need for U.S.-Africa public-private collaboration to strategically address the impact of the Ukraine war on Africa, its agricultural sector, and people.



Corporate Council on Africa is convening U.S. and African financial institutions, government and private sector representatives at this year's Africa Finance Forum to raise the profile of this crisis and bring together key public and private stakeholders to identify short term solutions to alleviate the economic shock from the war as well as incentivize strategic investment in the agricultural and agribusiness sector in Africa.

For more information, please contact

Biova Kabine bkabine@corporatecouncilonafrica.com.