Impact of Russia-Ukraine war on Africa

Ensuring Socio-economic Justice

Dr Mustafa Bothwell Mheta

Sha'ban 20, 1443 2022-03-23

Daily News Analysis

by Dr Mustafa Bothwell Mheta

Russia’s invasion of Ukraine, the fallout of the war and unprecedented sanctions on Moscow are shaking global supply chains and financial markets.

With Russia a major producer of commodities such as oil, gas, aluminium, palladium, nickel, wheat and corn, sanctions and market concerns about the war’s disruption on supply chains have caused commodity prices to soar.

Surging commodity prices will create winners and losers across Africa and the world.

On the economic side, it’s going to be a mixture of fortunes depending on how deep some African countries’ economies have done business with both Russia and Ukraine.

The fact that Russia and Ukraine provide 25% of the world’s grain supply may indirectly lead the African continent, as one of its largest customers, into food insecurity.

On the continent, countries most vulnerable to the conflict are those which import a large share of the wheat, like Egypt.

African countries that import most of their oil from Russia, like Kenya, will feel the impact much more.

However, there are other countries in Africa that export to Russia will benefit from the war.

Nigeria and Angola will be big winners as the supply- induced commodity price boom that began in 2021 will be prolonged because of the on-going war.

Some economists are of the opinion that Africa will be affected in many different ways.

The most pronounced effect will be via the surge in global commodity prices, particularly for oil and wheat.

Sanctions and supply chain disruptions will drive up commodity prices, and in turn inflation, causing spiralling crude oil and cereal prices for governments and consumers.

Increased energy prices will be felt most severely in skyrocketing transport and utilities costs, including electricity, gas and other fuels like kerosene and paraffin.

With Russia and Ukraine accounting for around 30% of the global wheat exports, and Ukraine accounting for 15% of corn exports, disruption to supply due to sanctions and the war will push up the prices of wheat and corn, and of cereals in general.

Most of the wheat consumed in Africa is imported.

Africa’s biggest wheat consumers will be most severely affected.

Countries that consume mostly corn, mainly in southern Africa, tend to grow their own crop, thus, the effect on inflation of higher prices is likely to be much lower.

Since economics go hand-in-hand with politics, this could also spill-over to the political arena and cause serious damage to some African leaders and countries.

Such leaders may not be voted back into power as a result of the war.

People in Africa tend to interpret economic developments in political terms.

But if there is mass hunger, people may not necessarily blame it on the Russia/Ukraine war.

They may misconstrue it and blame corruption on the part of the leadership.

Furthermore, on the political front, Africa will be divided into two blocs like it was in the past cold war (USA vs USSR).

Naturally, some African countries will align themselves with western countries (US and EU) while others with the eastern bloc (Russia and China).

It could be argued that this is the beginning of a postmodern cold war between the East and the West.

Its most dramatic playground may turn out to be Africa and the African Union will have to display good leadership if it wants to avoid the pitfalls ahead.

One can only pray for good and wise leadership to appear in Africa to steer the continent clear and not to take sides between the two power blocs.

If ever there was a time when organizations like the non-aligned movement were needed, it is now.

Aluta Continua!

Dr. Mustafa Mheta, Senior researcher/Head of Africa Desk, Media Review Network Johannesburg, South Africa and Dean: School of Languages at Somali National University (SNU) Mogadishu