Africa suffers devastating fallout from Ukraine war

From fuel to wheat, the invasion of Ukraine is already having a potentially devastating effect on prices across Africa.

In Sierra Leone, a West African country with a population of roughly 8 million people, the maximum cost of a litre of fuel went from 12,000 leones (93c) per litre to 15,000 (€1.16) on Thursday.

"As the geopolitical situation deteriorates in Europe, supply disruption[s] continue to hike oil prices, adversely affecting importing nations," said Sierra Leone's Petroleum Regulatory Agency.

The statement announcing the changes said the decision had been taken in consultation with the ministry of finance, ministry of trade and industry and oil marketing companies. Public transportation fares subsequently rose by roughly 25 per cent.

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"It's really difficult here," said Salifu Bai Kamara, a keke taxi driver in Freetown. He raised his fares, but said many can't afford them.

“Some people cannot pay, and some people beg,” he said.

Freetown residents have been using WhatsApp groups to share advice on where and if fuel is still available, along with memes about the crisis, including one of a man bringing a woman on a date to a petrol station with the tagline “she wanted to have dinner somewhere really expensive”, and another saying “beer is now cheaper than gas: drink, don’t drive”.

People describe queuing for hours for petrol, if it is available at all. Many also rely on fuel to power generators, as the national electricity supply is unstable.

More than 1,000km away, in Ghana, the cost of a litre of fuel went from roughly 6.4 cedis (79c) to 10 cedis (€1.23) a litre in just a few weeks, while the conversion rate for 1,000 cedis went from $150 to $125, said journalist Fentuo Tahiru Fentuo.

“That’s what you get for running an import-dependent economy,” he told The Irish Times.

Ghana has a population of roughly 30 million and was already struggling due to high debt and the economic impact of the Covid-19 pandemic. The country imports almost 40 per cent of its fertiliser from Russia.

Other foodstuffs

In east Africa, the availability of wheat is of particular concern. Russia and Ukraine supply almost 90 per cent of Kenya’s wheat imports, according to figures released by the UN.

That trend is similar or even higher in other countries in the region, reaching almost 100 per cent in Eritrea, more than 90 per cent in Sudan, Rwanda, and Somalia, which is suffering from a devastating drought.

Devan Shah, head of business development at Broadway Bakery, one of Kenya's largest industrial bakeries, said wheat prices were already rising steadily over the past six months due to a range of factors, including increasing transportation costs.

While his company has a stock of wheat to last for the next three months, he said the invasion of Ukraine could lead to a shortage and an accompanying price increase. Even other wheat producers will raise their prices because of the scarcity, he said during a phone interview, and he expects the cost of other foodstuffs to go up too.

“Whatever we can absorb we will absorb,” Shah said, “[But] we would need to pass on the cost at some point . . . Bread is obviously quite a stable product here, an increase in flour prices could affect the bread prices. The prices of bread doesn’t fluctuate as much as the price of flour, but if it goes on obviously that will go up too and that’s going to be a cost for the local Kenyan.”

Maximo Torero, chief economist of the UN's Food and Agriculture Organisation, tweeted last Monday saying it estimates the invasion will drive up wheat prices by another 8.5 per cent, "forcing poor people to eat less food, even as hunger and malnutrition rose sharply due to Covid-19".

“We are in an extremely problematic situation, whose trajectory remains uncertain,” he said. “Russia is a major energy supplier. Farming requires fuel, gas, electricity. Making fertilisers, pesticides, feedstuffs also requires energy. Rising energy prices could lead global fertiliser prices to hike 13 per cent in the next four years, reducing crop yields.”

"War in Ukraine means hunger in Africa," International Monetary Fund managing director Kristalina Georgieva told journalists.