Africa’s quarterly Economic performance and outlook April - June 2022

Abstract

The conflict between the Russian Federation and Ukraine has given rise to global supply chain bottlenecks and commodity price shocks, which have weakened the growth prospects of many African economies. Because the Russian Federation and Ukraine are crucial suppliers of agricultural commodities globally, the prices of those commodities and related inputs, including fertilizer, have risen sharply since the outbreak of the conflict. The combination of rapidly rising food and fertilizer prices and supply chain disruptions has exacerbated domestic price pressures, further worsening already dire food insecurity in many countries. Those challenges come at a time when many African economies are already reeling from the adverse repercussions of the pandemic, climate shocks (as food production in many countries has been adversely affected by floods, droughts and other extreme weather events), and heightened security risks. The result: ballooning import bills for economies that are net food and oil importers, which will reduce economic growth in 2022.