The International Monetary Fund has said that the food crisis currently ravaging Nigeria and other Sub-Saharan Countries has been exacerbated by over-reliance on imported foods.
In a new report titled, “Africa Food Prices Are Soaring Amid High Import Reliance,” the Washington-based lender said staple food prices in sub-Saharan Africa surged by an average 23.9 per cent in 2020 to 22—the most since the 2008 global financial crisis.
According to the report, the increase was commensurate to an 8.5 per cent rise in the cost of a typical food consumption basket (beyond generalised price increases).
The report said that global factors were partly to blame because of the region’s imports of top staple foods, noting that the pass-through from global to local food prices was significant.
It noted that in Nigeria, the prices of both cassava and maize more than doubled, even though they were mainly produced locally.
The report read in part, “We estimate that a 1 per cent increase in the consumption share of a staple food raises the local price by an average 0.7 per cent. The effect is even bigger when a staple is mostly imported, raising the price by about 1.2 per cent. When a country’s net import dependence increases by 1 per cent, the local real cost of a highly imported staple is expected to increase by an additional 0.2 per cent.
“The relative strength of a country’s currency is another driver as it affects the costs of imported food items. We find that a 1 per cent depreciation in real effective exchange rates increases the price of highly imported staples by an average 0.3 per cent.”
According to the IMF, staple food prices in sub-Saharan Africa were also 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.