Office of the Special Adviser on Africa - energy

One Year Later: The impact of the Russian conflict with Ukraine on Africa

Rado Ratovonarivo — Wed, 15 Feb 2023 18:04:00 +0000

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Secretary-General António Guterres watches grain being loaded on the Kubrosliy ship in Odesa, Ukraine.

UN Photo/Mark Garten

Secretary-General António Guterres watches grain being loaded on the Kubrosliy ship in Odesa, Ukraine. © UN Photo/Mark Garten

By Bitsat Yohannes-Kassahun

While much can be said about the political and policy intricacies surrounding the conflict, the real and palpable impact on the lives of many ordinary Africans is equally unsettling.

Against a backdrop of soaring food and energy prices and the shrinking basket of global economic cooperation financing, African countries are also contending with how to position themselves within the significant shifts in international energy policies, even as they are approached by various partners who are also grappling with the energy access implications for their own citizens.

The global energy crisis

The 2022 World Economic Outlook paints a stark picture of the state of global energy, stating that it is “delivering a shock of unprecedented breadth and complexity.”

This strain comes as African economies are still trying to emerge from the impacts of the COVID-19 pandemic, for which they did not have enough resources to cushion themselves.

By mid- 2022, global energy prices soared to a three-decade high, and natural gas price costs edged over 300 Euros per megawatt-hour. These high costs for natural gas have come down significantly by February 2023, to less than $100 per megawatt-hour, owing to relatively warm winter temperatures in the northern hemisphere.

European governments largely shielded their citizens from these price shocks by spending over $640 billion on energy subsidies, regulating retail prices, and supporting businesses. African governments, on the other hand, did not have the fiscal space to protect consumers with such wide-scale, much-needed measures to counter rising energy prices.

In addition to pressures from fluctuations in exchange rates, and high commodities prices, inflation reached double digits in 40 per cent of African countries. Moreover, seven African countries are in debt distress as of January 2023, and 14 more are at high risk of debt distress, which makes them unable to implement meaningful countermeasures.

As a result, African households, who, according to the IMF, already spend over 50 per cent of their overall consumption on food and energy, felt the significant impact of the high conflict-induced global energy prices, along with their indirect effects on the cost of transportation and consumer goods.

The global energy crisis also created policy reversals, with many countries now pursuing natural gas and other fossil fuel projects to meet their energy needs.

Natural gas is also getting more traction as a “green investment”, a pivot from the pledges made at the COP26 global climate talks in Glasgow in November 2021 to curtail development financing for natural gas projects.

For African countries, this has meant a renewed interest in and fast-tracking of natural gas and liquified natural gas (LNG) projects, but mainly for export to Europe and others outside the continent.

While this may spell more investments in the energy sector on the continent, the benefit may not necessarily result in energy access for Africans themselves. Instead, this risks further perpetuating commodities-based economies, stunting the continent’s own industrialization ambitions.

Shocks to Africa’s food systems

While Africa has over 65 per cent of the world’s uncultivated land, it is a net food importer, and as such, has been severely impacted by the rise of global food prices, resulting in increased food insecurity.

According to the IMF, staple food prices in Africa “surged by an average 23.9 per cent in 2020-22—the most since the 2008 global financial crisis.”

This has devastating implications for many Africans, where food items occupy the largest share in many household consumption baskets. Food items take up about 42 per cent of African household consumption, reaching as high as 60 per cent in countries affected by conflict and insecurity. In France and the United States, food items represent 13 per cent and 6 per cent of household consumption, respectively, notes the 51�Թ�.

According to the African Development Bank (AfDB), African countries spend over $75 billion to import over 100 million metric tons of cereals annually. In 2020, 15 African countries imported over 50 per cent of their wheat products from the Russian Federation or Ukraine. Six of these countries (Eritrea, Egypt, Benin, Sudan, Djibouti, and Tanzania) imported over 70 per cent of their wheat from the region.

The AfDB notes that the Russian invasion of Ukraine triggered a shortage of about 30 million tons of grains on the continent, along with a sharp increase in cost.

The UN's 2023 World Economic Situations and Prospects Report shows that Africa already had the highest prevalence of food insecurity globally in 2020 with 26 per cent facing severe food insecurity and 60 percent of the population affected by moderate or severe food insecurity according to the Food and Agriculture Organization (FAO).

During the ‘Dakar 2 Summit on Feeding Africa: Food Sovereignty and Resilience’ held during 25-27 January 2023, the AfDB reported that this number rose sharply in 2022, with Africans now representing one-third (about 300 million people) of the global population that is currently facing hunger and food insecurity.

Fertilizer costs

Supply chain disruptions of primary farm inputs, including fertilizer imports from Russia, Ukraine, and Belarus, further threatened Africa's food security. The World Food Programme (WFP) reported that global fertilizer prices have risen by 199 per cent since May 2020, with prices for fertilizers more than doubling in Kenya, Uganda, and Tanzania in 2022.

The WFP notes that "while this is partly a consequence of the war in Ukraine, prices of food, fuel, and fertilizers had already reached record highs by the end of 2021.” The “Black Sea Grain Initiative,” brokered by the 51�Թ� and Türkiye and signed in July 2022, has eased some of the “fertilizer crunch” by allowing the movement of fertilizer exports from Ukraine to the rest of the world.

Looking ahead to the 2023-2024 growing season, the price and availability of fertilizers for farmers in Africa will determine how the continent will counter widespread food insecurity.

According to the World Bank, Africa's food production is already hampered due to low fertilizer usage, with "an average fertilizer application rate of 22 kilograms per hectare, compared to a world average that is seven times higher (146 kilograms per hectare)".

The Bank estimates that fertilizer exports from major African suppliers, namely Ukraine, Russia, and Belarus, which remain disrupted, will impact Africa’s food production and exacerbate food security throughout 2023.

Moreover, the World Bank notes that other fertilizer producers are banning exports of these critical inputs to protect their own farmers, leaving African farmers without many options.

Conclusion

As the world reflects on the various shocks created by the year-long conflict, Africans must grapple with the short-term inadvertent threats to their economies, food systems, and well-being. Indeed, UN Secretary-General, Antonio Guterres, speaking at the Global Food Security Call to Action in May 2022, warned, "If we do not feed people, we feed conflict.”

With some decisive leadership, there are some strategies that can ease the burden on struggling economies:

For example, re-allocating the $100 billion IMF Special Drawing Rights to support African countries and restructuring both private and public debt would give these countries the fiscal space to weather the crisis.
There is also a ray of hope in countering the long-term impacts of the conflict. The most strategic one is the political will of African governments to refocus on agriculture. At the Dakar 2 Summit, many African Heads of State and Government were keen to bolster public spending on agriculture to build a self-sufficient and resilient African food system. In his opening remarks at the summit, President Macky Sall of Senegal remarked, “From the farm to the plate, we need full food sovereignty, and we must increase land under cultivation and market access to enhance cross-border trade.”
Indeed, implementing the African Continental Free Trade Area (AfCFTA), which promises efficient cross-border trade, would allow the seamless movement of the approximately 30 million metric tonsof fertilizer that Africa produces each year. This production is twice the amount of fertilizer that the continent currently consumes.
Similarly, the AfDB plans to invest $ 10 billion "to make Africa the world's breadbasket." Such an investment can go a long way in replicating technological solutions, such as Ethiopia's use of heat-resistant crops to boost its wheat surpluses. The country plans to be a wheat exporter to other African countries in 2023.
On the energy side, accelerating sustainable, reliable, and affordable energy access, be it for industrial development, employment for the continent’s youth, or ensuring its food security, everything invariably lies in Africa having a balanced energy mix.

The series of interlocking challenges these past few years have made one issue very clear. Africans must have a unified stance to avoid yet another cycle of commodities-based exploitation of the continent’s energy resources, and work to ensure Africa's universal energy access.

The author is a programme management officer and cluster lead on energy and climate with the Office of the Special Adviser on Africa at the 51�Թ�

Front Page Article:

Africa’s Practical Realities for COP 27 and Beyond: The food, energy and climate nexus

Anonymous — Mon, 20 Jun 2022 19:52:00 +0000

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Adobe free stock. adobestock_117163695.jpg_.jpg. nirutft

Africa’s Practical Realities for COP 27 and Beyond: The need for a nexus approach between Africa’s food systems, energy access and the continent’s fight against climate change

Agriculture is the backbone of Africa’s economy and holds tremendous potential as an engine for future growth and job creation in the continent.

The sector employs 65 to 70 per cent of Africa’s workforce and accounts for roughly a third of the continent’s gross domestic product (GDP). Women make up more than half of Africa’s farmers and produce about 90 per cent of the continent’s food.

Africa has the lowest productivity per capita in the world because farmers, for the most part, lack access to key agricultural inputs and rely on hand tools for land preparation and harvesting. Investing in key inputs for smallholder farms, including access to energy, has significant potential to transform the sector’s productivity. Promoting agricultural production is widely regarded as one of the most effective ways to drive inclusive growth and reduce poverty.

With each passing day, the impact of climate change shifts from predictions to reality.

In the coming years, Africa will experience severe adverse direct effects from climate change due to its high dependence on rainfed agriculture and its limited capacity to adapt. Projections under the Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathway 8.5 suggest that warming scenarios will have devastating effects on crop production and food security. Already the number of undernourished people in the drought-prone African countries has increased by 45.6 per cent since 2012, according to the FAO. In 2022, the UN estimates that 120 million people across the continent face a food crisis.

Africa, therefore, needs a nexus approach to food systems, energy, and climate especially since increasingly, droughts, water scarcity, and extreme weather events are threatening the continent’s ability to feed itself. For example, Africa’s approach to improving efficiency in food systems and agricultural value chains can have double benefits in both climate adaptation and mitigation. In terms of mitigation, lack of energy for storage and postharvest processing infrastructure leads to high postharvest losses, estimated at 30 per cent for grains and 50 per cent for other more rapidly perishable products.

These post-harvest losses cost Africa US$4 billion per year.

In terms of greenhouse gas emissions, this wastage contributes to the global estimated 3.3 billion tonnes of CO2 equivalent of Green House Gases released into the atmosphere per year.

Additionally, inefficient agricultural value chains and increased populations can lead to the expansion of agriculture into forests and wetlands, destroying forest covers, soil degradation, and reducing Africa’s carbon sequestration capacity.

Moreover, forest destruction emits further carbon into the atmosphere. Energy plays a key part in increasing the efficiency of the continent’s food systems.

The COVID-19 pandemic already sent shockwaves to global supply chains, raising the prices of basic goods and shipping costs substantially. The crisis of the Russia-Ukraine conflict is further endangering food systems in several African countries, in the short term due to shortages in commodities imports and in the medium term, potential shortages in agricultural inputs such as fertilizers. These shocks highlight the critical issue of why Africa needs to accelerate industrial development to produce key agricultural inputs and boost intra-African trade.

As we approach COP 27, the Office of the Special Adviser on Africa (OSAA) is advocating for an integrated and wholistic nexus approach to Africa’s food systems, energy access and climate adaptation. Specifically, we reiterate the following policy recommendations:

First, an integrated approach to energy access and agriculture value chains

Increasing productivity and efficiency in agriculture value chains will contribute to minimizing agriculture-related deforestation. Energy is a key enabler for improving yields, water efficiency, and post-harvest storage, as well as for developing aggregated processing technologies and trade-related capacities that support agriculture value chains. However, Africa’s agriculture sector accounts for just 2 per cent of total electricity consumption. Energy demand in agriculture comprises both irrigation and agro-processing. Currently, only 5 per cent of Africa’s farmland is irrigated; irrigation can boost crop yields by up to four times. One way to do so is to use renewable energy on smallholder farms to tap into groundwater available in shallow aquifers.

African farmers also need improved access to local and regional markets to bring their products to markets with minimal losses. This requires innovation in cooling systems and energy-efficient transportation since Africa has low road density and nearly half of the rural population must travel five hours or more to reach the nearest market. The private sector alone cannot offer the solution to resolve these issues. There needs to be an at-scale investment in enabling infrastructures such as rural roads, markets, and incentives for investing in agriculture-related energy infrastructure.

One policy approach is to prioritize the targeted deployment of mini-grids and off-grid capabilities through structured farming cooperatives. Doing so can make these technologies affordable and leverage economies of scale, thus ensuring attractive profit margins for the private sector to invest in rural electrification and improving agricultural value chains.

Second, building climate adaptation through investments in agriculture-enabling infrastructure to minimize loss

Climate-related changes in weather patterns, unreliable rainfall and the effects of drought threaten Africa’s agriculture. Moreover, some of the major food crops in Africa are “vulnerable to temperature increase, rainfall changes, and carbon dioxide increase.” These factors alone make the agriculture sector highly vulnerable to climate-related shocks.

A policy recommendation is that adaptation measures need research and development components to identify resilient crops and staples for African agriculture. It also requires investment in energy needed for scaling up irrigation coupled with localized climate monitoring systems and data to ensure resilience and food security.

In the lead-up to COP 27, we are going to continue exploring the various facets of this nexus and we ask that you join us!

Send your thoughts and comments on what you think is important for Africa to voice in the negotiations.

Let’s build the Africa We Want, let’s build the Africa the world needs!

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