Business, Finance & Economics

African countries threatened by food crisis attempt to contain prices

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This June 1, 2010 photo shows a woman picking up spilled maize among sacks of grain in a market in the northern Nigerian town of Maiadua, bordering Niger. At the time, thousands of Niger nationals had flooded Nigeria in search of food as a shortage worsened in the West African country.

Credit:

AMINU ABUBAKAR

In response to increased food prices, several African countries have recently reduced or removed import taxes on food staples such as cereals, sugar, and rice.

The actions by Mali, Niger and Ivory Coast reported last week are intended to stave off further price increases and the protests that could accompany them, Reuters reported. The United Nations recently warned of a crisis due to rising food prices fueled by drought and low crop harvests in large exporting nations such as the United States and Russia.

The World Bank also warned late last month of the potential for long-term global health impacts if current droughts affecting major countries leads to another food crisis, along the lines of the global food crisis in 2007 and 2008 that caused social upheaval and violent protest.

"When food prices rise, families cope by pulling their kids out of school and eating cheaper, less nutritious food, which can have catastrophic life-long effects on the social, physical, and mental well being of millions of young people," World Bank Group President Jim Yong Kim said in a statement, according to Reuters.

Countries already struggling with famine are especially at risk. In Zimbabwe, the number of people in need of food aid has increased 60 percent to 1.6 million this year, reports the UN’s World Food Programme, cited by Reuters. Agricultural production has dropped 30 percent from last season, creating a deficit that will need to be filled by an increase in imports. The WFP’s country director in Zimbabwe, Felix Bamezon, last month told Reuters that, "Our field staff are already reporting signs of distress in rural areas, including empty granaries and farmers selling off their livestock to make ends meet."

A greater dependency on foreign food crops is especially concerning for countries like Zimbabwe because it coincides with the increased scarcity worldwide, making it even more difficult to generate income. China and Europe, for example, are expected to decrease their import levels of African goods due to lagging economies. A decrease in exports for African countries combined with the strong dollar on import prices may slow down African economic growth, Reuters reported, causing a "dangerous double whammy," in the words of Mthuli Ncube, chief economist and vice president of the African Development Bank.

High food prices in a slow economy could lead to social upheaval similar to the violent food price protests seen during in 2007 and 2008 in countries such as Egypt, Haiti, and Cameroon.

International organizations and national governments are hoping to use the lessons from five years ago to forestall another crisis this time around. "There is an expectation that this time around we will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007/2008. But if those policies get repeated, anything is possible," Food and Agriculture Organization senior economist and grain analyst Abddreza Abbassain told Reuters.