Since 2015, West Africa's food security has deteriorated: The number of people suffering from malnutrition increased from 11.5 percent in 2015 to 18.7 percent in 2020, totaling 75.2 million people. Now, the region, like the rest of the world, is feeling the effects of Russia's war in Ukraine, which include rising food prices and market disruptions for cereals and other commodities such as fertilizers and fuels. What are some of the likely consequences of the war in West Africa?
Rising global prices pose the greatest threat overall. With a few exceptions, the region imports very little food or fertilizer from Russia and Ukraine, insulating it from many of the current market disruptions and allowing it to replace some lost fertilizer imports.
Commodity Markets in Turmoil
The FAO food price index had already reached an all-time high of 140.7 in February 2022, before the conflict began, due to rising prices for vegetable oils, dairy products, and grains. Prices are now skyrocketing as Russia and Ukraine export a large portion of the world's cereals, particularly wheat, and the conflict disrupts markets for fuels and other commodities. International fertilizer prices, for example, have risen dramatically: the price of urea, for example, has doubled from its 2015-2019 average in February 2022.
Indeed, cereals, sugar, vegetable oils, meat, and animals are imported from West Africa, while cocoa, cotton, peanuts, fish, and fruits are exported. From January 2020 to February 2022, the prices of palm oil, sugar, wheat, and chicken meat increased, while the prices of bananas, cocoa, and groundnuts remained stable. On the agricultural front, the only good news is that the price of rice (imported) has remained stable (though international price volatility has recently increased), and the price of cotton (exported) has risen.
Outside of agriculture, the region benefits from rising commodity prices because it exports a variety of raw materials, including gold, tin, oil (which accounts for more than half of the region's export earnings), copper, natural gas, uranium, zinc, and aluminum.
Evolution of Key Commodity Prices for West Africa
Of course, the effects of these various market shifts on local populations will be influenced to some extent by government policies. Increases in commodity prices can only compensate for increases in agricultural and food prices if there are redistribution mechanisms in places, such as using revenues from mining rents to fund food subsidies or other forms of assistance. Increased prices are especially problematic for urban households, which are more reliant on imports like wheat.
Fertilizers Issue
Fertilizer imports from Russia, the Economic Community of West African States (ECOWAS) second-largest supplier with 12% of the market, are also at risk for West African farmers. It is, however, a chance for regional suppliers.
Nigeria, first and foremost, has the ability to replace the missing imports. Indorama Nigeria and the Dangote Group have invested heavily in the fertilizer sector, taking advantage of the country's large natural gas reserves.
Morocco, which supplies a third of the ECOWAS fertilizer market, recently invested $1 billion in Nigeria to construct two phosphate plants (capacity of 1 million tonnes each). Except for Nigeria, the seven major West African countries for which data is available (Burkina Faso, Cote d'Ivoire, Ghana, Mali, Niger, Senegal, and Togo) import only about 0.24 million tonnes of fertilizer from Russia. Nigeria has the capacity to correct this imbalance: Dangote has a 3 million tonne capacity, Indorama has a 1.4 million tonne capacity, and Nigerian consumption is only 1.5 million tonnes.
Other types of fertilizers, on the other hand, face challenges. West Africa imports 82 percent of its potassium, and the vast majority of imports—80 percent—come from Belarus and Russia for Cote d'Ivoire, Mali, Niger, Senegal, and Sierra Leone. Percentage of the Russian Federation and Belarus in potassium fertilizer imports by country (West Africa)
Finally, the availability of fertiliser to farmers varies greatly from country to country. Only market mechanisms play a role in some countries, and price increases should be felt entirely by farmers. In others, the cost is borne in large part by state budgets through subsidy programmes (Nigeria, Ghana, Togo).
The economic consequences of the Russia-Ukraine crisis are overlapping with those surrounding Mali's coup in 2021. As a result, the Economic Community of West African States (ECOWAS) has twice imposed an embargo on the country, effectively closing its borders to all member states except for trade in basic necessities.
The Malian government has retaliated on two occasions. Some Malian industries, such as livestock and meat, had already made it illegal for their members to export within the ECOWAS bloc. Because Mali is one of the region's main livestock suppliers, the suspension of Malian exports has caused market tensions in some countries, particularly in the meat sector. Meat prices in Dakar, Senegal, have increased by 25% to 30% since the latest retaliation.
The economic fallout from regional tensions in West Africa, as well as the Russia-Ukraine situation, exemplifies the perilous links that exist between diplomatic sanctions, trade, and food security. These situations are still unfolding. Under EU law and the United Nations Convention on Trade in Landlocked Countries, Mali is contesting the legality of the embargo.
The current situation poses a challenge for ECOWAS, which must avoid taking actions that jeopardise regional food security, which is already weakened by the pandemic crisis. Intra-ECOWAS agricultural and food trade should be facilitated rather than hampered by export restrictions or embargos; in the rest of the world, a reduction of the common external tariff, which is already low on food products, as well as redistributive measures to help poor households, should be considered.
