Wheat export disruptions from Ukraine have already affected numerous importing countries.
The conflict between Russia and Ukraine has worsened commodity price increases. As a result, farmers in Africa face serious fertilizer shortages. Plans are now afoot to avert a famine in parts of Africa.
The African Development Bank (AfDB) approved a $1.5 billion financing facility for emergency food production, with the aim of averting a looming food crisis.
AfDB president Akinwumi Adesina told Reuters, “Africa should not allow itself to be vulnerable in excessively depending on others, whether it is for vaccines or whether it is for food.”
The Bank will help 20 million farmers around the continent to produce 38 million tonnes of food. Adesina said the bank had already received requests from countries to draw on the fund.
“Once those things come to our board, they are swiftly reviewed and approved, and the money is out at the door,” he said. Many countries are still struggling to rebound as they are facing rising inflation and food shortages aggravated by the war in Ukraine.
Medicine imports
AfDB president goes further to say Africa must wean itself off dependence on medicine imports, saying, “The fact is that when you are dependent on others, you are also very highly vulnerable to any shock of any kind.”
According to the AfDB, Africa imports 80% to 90% of all its medicines for a population of 1.3 billion people.
The institution approved the creation of a pharmaceutical tech foundation. It says the foundation would allow Africa to leverage intellectual property rights, protected technologies and innovations to expand Africa’s pharmaceutical and vaccine manufacturing sectors.
The World Trade Organisation has already agreed on a partial waiver of intellectual property rights to allow developing countries to produce and export COVID-19 vaccines.
Soaring price of fertilizer
The fertilizer costs have reached their highest level since 2010. Fertilizer shortages could result in lower agricultural yields.
According to fertilizer manufacturer Omnia, prices of fertilizer input materials have gone up by between 200% and 400%. Aid agencies have warned that rising input prices could force Africa’s smallholder farmers to reduce plantings.
Omnia supplies fertilizer to both commercial and smallholder farmers in several sub-Saharan African countries, including South Africa, Zimbabwe, Zambia, Mozambique, Kenya and Tanzania.
Russia’s invasion of Ukraine has prompted a global food crisis and fears of worse to come.
African countries are acutely affected by the growing crisis, which has sent prices of grains, cooking oils, fuel and fertilizer soaring. Russia and Ukraine account for nearly a third of global wheat supplies and Ukraine is a major exporter of corn and sunflower oil.
Wheat export disruptions from Ukraine have already affected numerous importing countries.
Nigeria’s annual inflation quickens to the highest level in five and a half years. Food prices, a major headline component for Nigerian inflation, were up 20.6% year-on-year in June. The central bank in May raised the benchmark interest rate by 150 basis points to 13%.
EU initiative
European Union (EU) was planning an initiative that would structurally decrease poorer nations’ reliance on Russian fertilizers. Russia and Belarus are major producers.
However, some fear that plans to invest in plants in Africa would clash with EU green goals. EU warned that supporting fertilizer production in developing nations would be inconsistent with EU energy and environment policies.
The EU has attempted to assist its poorer neighbours in Africa and the Middle East in weathering the crisis by sending new funding, while also trying to persuade them that EU sanctions against Moscow and Minsk are not to blame for the food crisis.
At a summit of EU leaders in June, the EU announced a new program to reduce poorer countries’ reliance on Russian fertilizers by assisting them in developing their own fertilizer factories. However, during that meeting, EU Commission explicitly opposed the text, stressing that financing fertilizer manufacturing in developing countries would be contradictory to EU energy and environmental policy, officials said.
Chemical fertilizer production has a significant environmental impact and necessitates a significant amount of energy. They are, nevertheless, extremely effective in increasing agricultural yield.
G20
The Group of 20 major economies’ finance chiefs pledged to address global food insecurity and rising debt. However, little progress was made amid divisions over Russia’s war in Ukraine.
US Treasury Secretary Janet Yellen said the differences prevented a formal communique from being issued. The G20 will set up a joint forum between finance and agriculture ministers to address the food and fertilize supply issues.
The failure to agree on a communique reflected the weakness of the once-mighty economic grouping, analysts said. Western countries were frustrated that Chinese officials did not attend the meetings in person.
Fertilizer manufacturer Omnia Holdings says African governments are increasing support for smallholder farmers amid fears that input costs could cut crop production and worsen food insecurity.
Aid agencies have warned that rising input prices could force Africa’s smallholders to reduce plantings of staple grains such as maize.