Weakened by a pandemic that lasted more than two years, we are once again faced with catastrophic risk. The Russia-Ukraine war is a second, full-scale crash test for the world at large.
Despite the geographical distance, Russia's invasion of Ukraine is casting a long and dark shadow across Africa., as there are important ties between Russia, Ukraine, and Africa. Although some African countries may benefit from a shift in global markets away from Russia due to the crisis, the short-term potential impacts on economic livelihoods are worrying and the implications for pan-African solidarity become increasingly uncertain.
BENEFITS FOR NATURAL RESOURCE EXPORTERS
A few countries experience long-term growth opportunities from the crisis. More specifically, Africa's natural gas could reduce Europe's dependence on Russian energy. For example, Tanzania and Senegal sense a growing interest in the country's gas reserves, in support of Europe's energy diversification. Nigeria, already a supplier of liquified natural gas (LNG) to several European countries, is furthermore embarking with Niger and Algeria on the Trans-Saharan Gas Pipeline to increase exports of natural gas to European markets.
Besides natural gas, further sanctions on Russia might benefit other natural resource exporters in the region. For instance, South Africa, the world's second-biggest producer of palladium—a critical input into automobiles and electronics, could see growing demand as a result of international sanctions placed on Russia. Similarly, as a major exporter of gold, the South African rand has been strengthening as a result of rising global prices for this precious metal.
HOUSEHOLD VULNERABILITY FROM FUEL, FERTILIZER, AND FOOD IMPACTS
Despite these opportunities, the war could pose challenges for African households, the agricultural sector, and food security. The rising price of oil on global markets directly impacts transport costs.
Rising energy costs furthermore affect the production of fertilizer, which is often a necessary input for a productive agricultural sector. The costs of urea and phosphate—two major components of, fertilizer—had already risen by 30 and 4 percent, respectively, by the end of 2021. These increases plus fertilizer export bans by China and Russia through at least June 2022, will cause the cost of fertilizer to rise, which will, in turn, elevate food costs.
For several African countries, high dependence on wheat imports from Russia or Ukraine poses a further immediate concern. Africa—north, and south of the Sahara—represent about 36 percent of Ukraine's total wheat exports and is by far the largest regional destination. Kenya, which imports most of its wheat from both Ukraine and Russia, has seen rising food prices in recent weeks that are generating growing anger on social media. Elsewhere in East Africa, importers of wheat from the Black Sea region are already facing extremely volatile social and political circumstances that could be worsened by rising food prices.
REGIONAL SOLIDARITY WILL BE TESTED
Finally, the invasion of Ukraine presents a significant test of the concept of pan-African solidarity and regionalism. In recent months, the set of institutions intended to represent this solidarity—from the African Union (AU) to the Economic Community of West African States (ECOWAS) as well as the Southern African Development Community (SADC)—have been undermined by conflicting views among heads of state.
African governments have shown a growing interest in building relationships with both the West and the East in order to diversify trade, investment, and aid options. There is minimal interest in returning to an era when African leaders needed to show loyalties to a Cold War power. Yet, the key question now is how African governments will maintain their relationships with their diverse set of external partners—and with one another—as the geopolitical context dramatically shifts.
Catherine Muchine ǀ Account Executive ǀ Minseg Mozambique
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