The ongoing Russia-Ukraine war has further aggravate liquidity challenges of most African economies and constrain their capacity to recover from the negative impact of the global COVID-19 pandemic, economic experts have said.
The experts spoke at the margins of the 54th session of the Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development in Dakar, Senegal.
The ECA Sub-Regional Office for Southern (SRO-SA) organised the event in collaboration with the Angolan Government and the United Nations Resident Coordinator’s Office in Angola.
The event provided a platform for African countries to dialogue and exchange ideas and experiences on the actual and potential impacts of the Russia-Ukraine crisis on African economies.
The event was also aimed at stimulating appraisals on the impact of the crisis on the sustainable development of African economies, share experiences and perspectives on how to mobilise resources to counter the shocks of COVID-19 and Ukraine Crisis.
SRO-SA Director, Eunice G. Kamwendo, said African countries were most affected by the pandemic and the combined impact of the COVID-19 and the Ukraine crisis, and were likely to further aggravate liquidity squeeze constraining their recovery.
Kamwendo reminded participants at the conference that as a region Southern Africa contracted the most out of all the sub-regions in Africa due to COVID-19.
“According to estimates by the African Development Bank (AfDB), the region’s gross domestic product (GDP) contracted by as much as 6.3% in 2020, compared to a 2.1% recession for the rest of Africa,” said Ms Kamwendo.
She pointed out that Africa faces a high risk of food insecurity because Russia and Ukraine were major global suppliers of agricultural commodities such as maize, wheat, oils and fertilizers.
“The two countries, combined, provide 30 percent of the world’s wheat and barley needs; supply nearly one-fifth of maize globally, and account for over half of the global market share in sunflower oil, among other commodities,” she said.
The United Nations Resident Coordinator, Zahira Virani, said the war in Ukraine was forcing Africa to revisit its economic recovery strategies.
“Angola is leading the side event because Angola is in a unique position of facing adverse impacts and opportunities at the same time,” she said.
She said the African Continental Free Trade Area (AfCFTA) provided a great opportunity for intra trade and new markets for the country.
Angola Minister of Economy and Planning, Mario Augusto Caetano Joao, informed the meeting that to counter shocks, Angola engaged deep reforms and changes in its business model, by prioritizing local production and diversifying from focus on oil production to heavy investments in agri business, fisheries, and transport, to give the country a comparative advantage.
“Ten years ago, Angola’s oil dependence was 43% and now oil dependency is only 20% showing that the investments are bearing fruit and the country’s economy has stabilized despite the crisis,” he said.
Uganda Minister of State for Finance, Planning and Economic Development, Amos Lugoloobi, encouraged Southern African countries to increase local food production to prevent the dependency on wheat.
He gave an example of his country, which has increased the production of its staple food and products such as bananas, maize, cassava, palm trees and potatoes.
Lugoloobi said Uganda was a net producer of its food supplies and export to neighbouring countries, adding that the country also embarked on increasing the production of sunflower oil to counter rising prices and be self-sufficient and able to face shocks.
On policy responses to the Ukraine crisis and COVID-19 pandemic, three other presenters, namely the Deputy Governor of the Central Bank of Tanzania,Yamungu Kayandabila; IMF Country Director in Angola, Marcos Souto,Dr Eklou; Manager for Agriculture and Agro-Industry for West Africa, African Development Bank, Attiogbevi-Somado, and President of South African Chamber of Commerce and Industry, Mtho Xulu, spoke at the event.