The Impact of Global Energy Crisis and Rising Food Prices on Africa

Introduction

The global energy crisis and rising food prices have had a significant impact on African countries. This article explores the consequences of these challenges and their implications for the continent’s development. It also highlights the renewed interest in natural gas projects in Africa and the potential risks associated with this trend.

The Global Energy Crisis and Policy Reversals

The global energy crisis has led many countries to pursue natural gas and other fossil fuel projects to meet their energy needs. This shift in policy represents a reversal of the pledges made at the COP26 global climate talks in Glasgow. Natural gas is now being considered a “green investment” despite concerns about its environmental impact.

African countries have also joined this trend, showing a renewed interest in and fast-tracking of natural gas and liquefied natural gas (LNG) projects. However, these projects are primarily focused on export to Europe and other regions outside of Africa. While this may attract more investments in the energy sector on the continent, it may not necessarily result in improved energy access for Africans themselves. Instead, it risks perpetuating commodities-based economies and hindering Africa’s own industrialization ambitions.

Shocks to Africa’s Food Systems

Despite having over 65 percent of the world’s uncultivated land, Africa remains a net food importer. The continent has been severely impacted by the rise of global food prices, leading to increased food insecurity. According to the IMF, staple food prices in Africa surged by an average of 23.9 percent between 2020 and 2022, the highest increase since the 2008 global financial crisis.

The implications of these rising prices are devastating for many Africans, as food items occupy a significant share of household consumption. In fact, food items account for approximately 42 percent of African household consumption, reaching as high as 60 percent in countries affected by conflict and insecurity. In comparison, food items represent 13 percent and 6 percent of household consumption in France and the United States, respectively, according to the United Nations.

The Cost of Food Imports in Africa

African countries heavily rely on food imports, leading to substantial expenditure. According to the African Development Bank (AfDB), African countries spend over $75 billion annually to import more than 100 million metric tons of cereals. In 2020, 15 African countries imported over 50 percent of their wheat products from the Russian Federation or Ukraine. Six of these countries, namely Eritrea, Egypt, Benin, Sudan, Djibouti, and Tanzania, imported over 70 percent of their wheat from the region.

The Russian invasion of Ukraine triggered a shortage of approximately 30 million tons of grains on the continent, causing a sharp increase in costs. The implications of these high food import bills are significant, as they strain the economies of African countries and contribute to food insecurity.

Food Insecurity in Africa

The UN’s 2023 World Economic Situations and Prospects Report revealed that Africa had the highest prevalence of food insecurity globally in 2020. According to the Food and Agriculture Organization (FAO), 26 percent of the African population faced severe food insecurity, while 60 percent were affected by moderate or severe food insecurity.

These alarming statistics highlight the urgent need to address food insecurity in Africa. The continent’s heavy reliance on food imports, coupled with rising global food prices, exacerbates the problem and leaves many vulnerable populations at risk.

Conclusion

The global energy crisis and rising food prices have had a profound impact on Africa. The pursuit of natural gas projects and the reliance on food imports have created new challenges for the continent’s development. While investments in the energy sector may bring benefits, they must not come at the expense of energy access for Africans themselves. Similarly, efforts to address food insecurity must focus on promoting sustainable agriculture and reducing dependence on imports. Only by addressing these underlying issues can Africa achieve its industrialization ambitions and ensure the well-being of its population.