Keynote Presentation: "The Russia-Ukraine War and Global Commodity Market Disruptions: Nutrition, Food Security and Poverty Effects among most Exposed African Countries". Dr. Ismael Fofana, Director of Capacity and Deployment, AKADEMIYA2063

1. THE RUSSIA-UKRAINE WAR AND GLOBAL COMMODITY TRADE
AND MARKET DISRUPTIONS
Nutrition, Food Security and Poverty Effects among most
Exposed African Countries
By
Ismael FOFANA
AKADEMIYA203
Director for Capacity and Deployment
www.akademiya2063.org
AFRICAN UNION 2022 YEAR OF NUTRITION:
Strengthening resilience in nutrition and food
security on the African continent
Nutrition and Food Security Dialogue Series
Dialogue #3: “Impacts of the Russia-Ukraine War on Nutrition,
Food Security, and Poverty in Africa: Challenges and
Opportunities to Building Resilient Food Systems”
Virtual Event - July 26, 2022

2. www.akademiya2063.org
WHEAT MARKET DISRUPTION
o Exposure and contagion
o Income equity, food price inflation and consumption effects
VEGETABLE OILS MARKET DISRUPTION
o Exposure and contagion
o Income equity, food price inflation and consumption effects
FERTILIZER MARKET DISRUPTION
o Exposure and contagion
o Effects on fertilizer use and crop productivity
o Effects on agricultural output and GDP growth
LOCAL FOOD MARKET ADJUSTMENT
o Effects on local food staples prices
o Effects on energy prices
REGIONAL TRADE OPORTUNITIES
o Trade overlap and regional trade expansion potential
o Country competitiveness and exploitation of the regional trade potential
THE UKRAINE CRISIS AND AFRICAN ECONOMIES
Impact on most exposed countries (Cont.)

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GLOBAL COMMODITY MARKET DISRUPTION
o Changes in global commodity prices
o TOT effects of global commodity market disruptions
o Growth and employment effects
o Poverty and food security effects
THE UKRAINE CRISIS AND AFRICAN ECONOMIES
Impact on most exposed countries

4. -40
-20
0
20
40
60
80
100
120
140
160
Coal,
Australia
Crude
oil,
Brent
Natural
gas,
Europe
Natural
gas,
U.S.
Liquefied
natural
gas,
Japan
Cocoa
Coffee,
Arabica
Coffee,
Robusta
Tea,
average
Coconut
oil
Groundnut
oil
Palm
oil
Soybean
meal
Soybean
oil
Soybeans
Barley
Maize
Rice,
Thailand,
5%
Wheat,
U.S.,
HRW
Bananas,
U.S.
Meat,
beef
Meat,
chicken
Oranges
Shrimp
Sugar,
World
Logs,
Africa
Logs,
S.E.
Asia
Sawnwood,
S.E.
Asia
Cotton
A
Index
Rubber,
RSS3
Tobacco
DAP
Phosphate
rock
Potassium
chloride
TSP
Urea,
E.
Europe
Aluminum
Copper
Iron
ore
Lead
Nickel
Tin
Zinc
Gold
Silver
Platinum
Energy Agriculture
Beverages
Agriculture Food Oils
and Meals
Agriculture
Food Grains
Agriculture Food Other
Food
Agriculture
Raw
Materials
Timber
Agriculture
Raw
Materials
Other Raw
Materials
Fertilizers Metals and Minerals Precious
Metals
Variation 2021/2022 Before Crisis Variation 2021/2022 After Crisis
(April 2022 Forecasts, Ukraine Scenario)
The Ukraine crisis has affected nearly every global primary commodity market
(October 2021 Forecasts, Baseline Scenario)

5. Export price index change
Less than 5 Percent Points for most countries
Import price index change
More than 5 Percent Points for most countries
Deterioration in Terms of Trade (ToT)

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Assessment of growth and food security effects
among ten most exposed African countries
TWO SCENARIOS
Baseline scenario: No major changes in the economies’ trajectories, yielding
growth, employment, poverty, and food consumption levels in the absence of
the crisis for the period 2022-2024.
Ukraine scenario: Disruptions to the individual country economies resulting
from the changes in global commodity markets and terms of trade effects
Benin, Ghana, Kenya, Malawi, Mozambique, Nigeria, Senegal, South Africa, Tanzania, Uganda

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Term of Trade Effects
Countries facing improving terms of trade
• Benin
• Ghana
• Mozambique
• Nigeria
• South Africa
TOT+
-15
-10
-5
0
5
10
15
20
25
30
Benin
Ghana
South
Africa
Nigeria
Mozambique
Benin
Ghana
South
Africa
Nigeria
Mozambique
Benin
Ghana
South
Africa
Nigeria
Mozambique
2022 2023 2024
Export Price Index Import Price Index
Import and Export Price Indices, Percentage Point Changes between Ukraine and Baseline Scenarios

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Term of Trade Effects (Cont.)
Countries facing deteriorating terms of trade
• Kenya
• Malawi
• Senegal
• Tanzania
• Uganda
TOT-
-15
-10
-5
0
5
10
15
20
25
30
Kenya
Malawi
Uganda
Senegal
Tanzania
Kenya
Malawi
Uganda
Senegal
Tanzania
Kenya
Malawi
Uganda
Senegal
Tanzania
2022 2023 2024
Export Price Index Import Price Index
Import and Export Price Indices, Percentage Point Changes between Ukraine and Baseline Scenarios

9. Income and Price Effects
ToT deterioration increases inflationary pressures and reduce output and income growth
TOT+
Change in consumer price index, Ukraine vs. Baseline 2022
-0,2
-0,5
3,6
-0,3 -0,5
Benin Ghana Mozambique Nigeria South Africa
1,1
2,4
-0,6
1,8
3,6
Kenya Malawi Senegal Tanzania Uganda
Countries facing improving ToT TOT- Countries facing deteriorating ToT
Change in consumer price index, Ukraine vs. Baseline 2022
0,9 0,8
-3,0
1,4
-0,8
Benin Ghana Mozambique Nigeria South Africa
-5,0
-4,5 -4,4
-2,4
-3,0
Kenya Malawi Senegal Tanzania Uganda
Change in Household Income, Ukraine vs. Baseline 2022 Change in Household Income, Ukraine vs. Baseline 2022

10. Household Consumption Effects
Declining consumption in countries facing deteriorating ToT
TOT+
Change in Household Final Consumption,
Ukraine vs. Baseline 2022
Countries facing improving ToT TOT- Countries facing deteriorating ToT
1,2
1,4
-5,2
1,6
0,3
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
Benin Ghana Mozambique Nigeria South Africa
Change in Household Final Consumption,
Ukraine vs. Baseline 2022
-5,3 -5,2
-3,4
-3,0
-5,2
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
Kenya Malawi Senegal Tanzania Uganda

11. Food Consumption Effects
Rising cost of food and declining food consumption
TOT+
Changes in FOOD price index, Ukraine vs. Baseline 2022
Countries facing improving ToT TOT- Countries facing deteriorating ToT
0,8
2,3
3,7
0,5
-0,5
Benin Ghana Mozambique Nigeria South Africa
3,4
2,2
0,6
1,5
3,7
Kenya Malawi Senegal Tanzania Uganda
Changes in FOOD price index, Ukraine vs. Baseline 2022
0,2
-0,4
-3,9
0,6
-0,2
Benin Ghana Mozambique Nigeria South Africa
-5,3
-3,9
-3,0 -2,8
-3,9
Kenya Malawi Senegal Tanzania Uganda
Changes in FOOD consumption, Ukraine vs. Baseline 2022 Changes in FOOD consumption, Ukraine vs. Baseline 2022

12. Poverty Effects
Rising cost of living and increasing poverty in countries facing deteriorating ToT
TOT+
Headcount Poverty Indices in 2022,
Changes Ukraine compared Baseline Scenarios
Countries facing improving ToT TOT- Countries facing deteriorating ToT
-0,8 -0,7
1,6
-1,2
0,0
Benin Ghana Mozambique Nigeria South Africa
3,9 3,9
2,4
0,6 0,5
Kenya Malawi Senegal Tanzania Uganda
Headcount Poverty Indices in 2022,
Changes Ukraine compared Baseline Scenarios

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CONCLUSION
Economywide impact indicates four categories of countries:
ü A group with negative terms of trade effects that recover
relatively early by 2024 (Kenya, Malawi, Uganda)
ü A group with negative terms of trade effects that will not have
recovered by 2024 (Senegal, Tanzania)
ü A group with positive terms of trade effects but negative
poverty and food security outcomes (Mozambique)
ü A group with positive terms of trade and positive poverty and
food security outcomes (Benin, Ghana, Nigeria, South Africa)
TOT-
TOT-
TOT+
TOT+

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CONCLUSION (Cont.)
Income Growth and Food Security Outcomes Driven by:
üExternal Trade Structure
üDiversification of Trading Patterns
üIndustry Labor Intensity
üIntersectoral Connectivity

15. The End