/Food, energy and finance systems in Africa: The triple crisis of war

Food, energy and finance systems in Africa: The triple crisis of war

A recently released UN report says more than 70% of Africa’s economies including food, energy and finance, are at severe risk from Russia’s war on Ukraine.

The UN’s Global Impact of war in Ukraine on food, energy and finance systems report [see below] calls for immediate and efficient use of all existing mechanisms to help countries directly suffering from the war and its consequences.

The African Development Bank (AfDB) is one of several international organisations – including UN specialised agencies and development lenders – that are considering plans to boost food production in Africa.

UN secretary-general Antonio Guterres announced the establishment of a 32-member UN Global Crises Response Group in March. The members of the Group are heads of the various organisations. In its first brief, released last week in New York, the Group found that 41 African countries face maximum exposure to at least one emergency caused by the war.

“The war is supercharging a three-dimensional crises – food, energy and finance – that is pummelling some of the world’s most vulnerable people, countries and economies,” warned Guterres.

Global conflict interferes with long supply chains
Preliminary analysis suggests that as many as 1.7 billion people in 107 economies are exposed globally to at least one of the three risks highlighted by the Global Crises Response Group. Guterres said actions plans recommended by the Group target Africa in particular as African countries are among the most vulnerable to the looming crises.

AfDB President Dr Akinwumi Adesina said their proposed emergency food plan would build on the success of existing programmes such as the Bank’s Technologies for African Agricultural Transformation (TAAT) initiative. TAAT has already provided 11 million farmers across 29 African countries with technologies such as drought-resistant maize, heat-resistance wheat and higher-yielding seed varieties.

Adesina said the AfDB’s plan could help 40 million farmers increase their harvest of heat-tolerant wheat varieties, rice, soybeans and other crops to feed around 200 million people.

“If ever there was a time to drastically raise food production in Africa, it is now,” said the AfDB President.

Prices of food, energy and fertilisers have risen sharply around the world. This increases the risk of global instability as Russia and Ukraine usually act as one of the world’s biggest breadbaskets, producing about 30% of the globe’s wheat and barley, 20% of maize and more than half of the sunflower oil.

Gas market rebounded in 2021, but effect of climate change continues

Fertiliser is an inadvertent casualty of war
Russia is the world’s top natural gas exporter and second-largest oil exporter. Russia and its neighbour Belarus export around 20% of the world’s fertiliser. While gas prices surged during 2021, several companies reported temporary curtailment of ammonia and fertiliser production, according to the IEA’s Gas Market Report Q4-2021. The most recent Gas Market Report Q1-2022 says “the current gas supply tensions and high prices also have strong negative impact on the non-energy uses of natural gas, especially for fertilisers.”

Natural gas accounts for 70% of global ammonia production, which is the starting point for all mineral nitrogen fertilisers. The price of urea more than doubled between September 2021 and March 2022. China and Russia – the world’s two major exporters of urea – restricted exports in late 2021 in order to maintain supply and food security for their own domestic markets. Sanctions on Russia further strain fertiliser availability and global future crop yield.

“We need to really have a sense of urgency. Restrictions need to be abolished. There should be no hoarding of any of these products and most importantly, we need to use immediately the financial instruments available,” said Guterres.

While biogas can be used as a source of fuel to produce electric energy, organic residue does have the potential as a growing medium and fertiliser for plants. The business case for biogas in Africa is a topic of discussion at Enlit Africa this year.

By Theresa Smith