2024

Sierra

United

World

West Africa is currently enduring a severe economic crunch, with a sharp rise in hunger among its populace. The World Food Program estimates that nearly 55 million people in the region will soon face difficulties feeding themselves, marking a 12% increase over last year and 4 million more than earlier forecasts. 
This crisis is propelled by rampant inflation and significant currency devaluations. 
Trade sanctions on military regimes are also making things worse, aggravating the food shortage, as stated in a recent announcement by a United Nations agency. Ollo Sib, a senior researcher at WFP, <a href="https://www.bloomberg.com/news/articles/2024-04-12/inflation-economic-turmoil-drive-west-african-food-crisis?srnd=undefined&amp;embedded-checkout=true" rel="nofollow noopener" target="_blank">pointed out</a>, “The economic situation is now a major force driving the food crisis, especially in countries like <a href="https://www.cryptopolitan.com/its-time-we-talk-about-nigeria-and-its-naira/" data-type="post" data-id="511215">Nigeria</a>, Ghana, and Sierra Leone, where inflation hits hardest.” 
<h3 class="wp-block-heading" id="rising-costs-and-economic-policies">Rising Costs and Economic Policies</h3> 
Staple grain prices have soared to ten times their five-year average due to the plummeting value of local currencies and escalated fuel and transport costs. This year, the region faces a daunting 12 million ton deficit in cereal production. Pandemic-era restrictions on food exports have also hampered trade, reducing food availability. Sib elaborated, “The spike in food and transportation costs is creating a long-term impact, as all these countries depend on imported food.” 
Nigeria, the most populous country in Africa, reports over 26 million people struggling with food security, up from 25 million last year. Eastern Chad, usually sufficient in food, now reports record food insecurity levels due to the influx of refugees escaping the civil war in Sudan. 
The International Monetary Fund (IMF) has called on Nigeria to urgently address its escalating food insecurity, with nearly 10% of its population affected. The country’s ongoing economic reforms, such as eliminating fuel subsidies and loosening currency controls—though popular with investors—have accelerated inflation to the highest rate in nearly 30 years. 
<h3 class="wp-block-heading" id="economic-performance-and-projections">Economic Performance and Projections</h3> 
The IMF stresses, “Addressing rising food insecurity is now a critical policy priority.” Nigeria’s recent move to implement a cash transfer system for vulnerable households is a significant step, though its success depends on effective implementation. Amid a food price inflation rate of 35.4%, Nigeria has seen protests and looting in various parts, including Abuja. Over 40% of its population lives in extreme poverty. 
To combat inflation and stabilize the currency, Nigeria’s central bank has increased interest rates to a record 22.75%. The naira has lost about 70% of its value against the dollar since mid-2023. More hikes in borrowing costs are expected. 
The World Bank has flagged that sluggish growth in Nigeria could dampen the entire sub-region’s economic outlook. The lender’s report predicts an increase in economic activity in Western and Central Africa, from 3.2% in 2023 to 3.7% in 2024, and further to 4.2% by 2025–2026. However, growth is hindered by Nigeria’s lower-than-average performance. Excluding Nigeria, the sub-region could grow by 4.4% in 2024 and 5% in 2025–2026. 
Meanwhile, the West African Economic and Monetary Union is expected to see growth rates of 5.9% in 2024 and 6.2% in 2025, bolstered by strong economic activities in Benin, Côte d’Ivoire, Niger, and Senegal. 
The World Bank notes that Nigeria’s growth is anticipated at 3.3% in 2024 and 3.6% in the following years, as reforms slowly take effect. It also expects a stabilization in the oil sector with a recovery in production and slightly lower prices, leading to a more stable macroeconomic environment and sustained growth in the non-oil economy.

West Africa’s economy has never been as bad as it is right now

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Alte articole publicate pe 14 apr. 2024

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