The International Monetary Fund (IMF) has said that soaring staple food prices in Sub Saharan Africa is due to its high reliance on imports.
In a report titled ‘Africa food prices are soaring amid high import reliance’, the IMF noted that besides global factors, the import of most of the regions top staple foods—wheat, palm oil, and rice have only helped to push up prices.
The global lender said that prices of locally sourced staples have also spiked in some countries on the back of domestic supply disruptions, local currency depreciations, and higher fertilizer and input costs.
“In Nigeria for example, the prices of both cassava and maize more than doubled even though they’re mainly produced locally.
“In Ghana, prices for cassava escalated by 78 percent in 2020-21, reflecting higher production costs and transport constraints, among other factors,” it said.
The Fund said food prices tend to be higher in countries with weaker fiscal management and elevated public debt.
According to the report, staple food prices in sub-Saharan Africa surged by an average 23.9 percent between 2020-22—the most since the 2008 global financial crisis.
“Using price data from 15 countries on the five most consumed staple foods in the region (cassava, maize, palm oil, rice, and wheat), we find that in addition to global food prices, net import dependence, the share of staples in food consumption, and real effective exchange rates drive changes in local staple food prices.
“Of these, the consumption share of each staple has the largest price effect. This is due in part to income. Better-off households can afford a wider range of foods, but for the poor there are very few substitutes for staples, which make up nearly two-thirds of their daily diet.”
The Bretton Wood Institute noted that staple food prices in the region were also being impacted by natural disasters and wars, rising by an average 4 percent in the wake of wars and 1.8 percent after natural disasters, depending on the magnitude, frequency, duration, and location of events.
The Fund noted that to address the anomaly, there must be policy makers must come up with stronger monetary policy framework that will curb direct and second round inflationary pressures that would control inflation.
These results suggest a mix of fiscal, monetary, and structural reforms could help lower food inflation.
