President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, said the bank had decided to shore up Africa’s food security with a $1.5 billion Africa Emergency Food Plan in the wake of the Russia/Ukraine conflict, which is being projected to trigger a global food crisis. Adesina stated this yesterday during a meeting with President Muhammadu Buhari at the State House, Abuja.
In his response, Buhari said his administration was keen on protecting the country’s food security, explaining that the government shut the country’s land borders for about two years to encourage Nigerian farmers. He said much had been achieved through the plan.
The World Bank in its latest Commodity Markets Outlook Report released yesterday, noted that the war in Ukraine had dealt a major shock to commodity markets, altering global patterns of trade, production, and consumption in ways that would keep prices at historically high levels through the end of 2024.
The AfDB president said the food plan was awaiting the ratification of the bank’s Board. He also disclosed that owing to the Ukraine conflict, the price of wheat had gone up about 60 per cent, saying it would affect about 20 per cent of Africa’s food production.
Briefing Buhari on steps taken by AfDB to avert food crisis in the continent, Adesina said the Russia-Ukraine war would create global problems, and particularly for Africa, which imports a huge percentage of its food from the two countries.
He said, “Already, the price of wheat has gone up about 60 per cent. Maize and other grains will also be affected. There may be fertiliser crisis, as there would be about two million metric tons deficit. And that will affect food production by about 20 per cent. Africa will lose $11 billion worth of food, and coming shortly after COVID-19, that would be rather serious.”
To prepare against the rainy day, Adesina said AfDB had developed a $1.5 billion Africa Emergency Food Plan, which is now before the bank’s Board for approval.
He said, “We were not ready for COVID-19, but we are now planning to avert food crisis on the continent. There is a plan to help farmers cultivate wheat, maize, rice, sorghum, and soybeans. It will mitigate the impact of the Russia-Ukraine war.”
Talking specifically on Nigeria, the former Minister of Agriculture said in the wet season of 2022, at least five million smallholder farmers would be helped to cultivate one million hectares of maize, one million hectares of rice, and 250,000 hectares of sorghum and soybeans, respectively.
“In total, our support will help Nigeria to produce 9.5 million metric tons of food,” he explained.
He listed states to benefit from the assistance to include Kano, Ogun, Oyo, Kaduna, Imo, Cross River, and the Federal Capital Territory.
The AfDB head added, “Mr. President, you have a passion for agriculture. We are behind you strongly, and we want to ensure Nigeria won’t feel the impact of the food crisis.”
Buhari lauded AfDB for planning ahead of whatever negative consequences might come from the Russia-Ukraine conflict in terms of food security.
The president appreciated Adesina, “for knowing our weaknesses and our strengths, and for planning and working ahead.”
Buhari added, “We are very much aware of the need for food security, and to encourage our local farmers. That was why we closed our borders for about two years to curb smuggling. We made some progress.”
Meanwhile, the World Bank reported a major shock in commodity markets, which altered global trade patterns, production, and consumption in ways that would keep prices at generally high levels through the end of 2024.
The report noted that the increase in energy prices over the past two years had been the largest since the 1973 oil crisis.
Price increases for food commodities – which Russia and Ukraine are large producers – and fertilisers, which rely on natural gas as a production input, had been the largest since 2008.
“Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s,” World Bank’s Vice President for Equitable Growth, Finance, and Institutions, Indermit Gill, said, adding, “As was the case then, the shock is being aggravated by a surge in restrictions in trade of food, fuel and fertilizers.”
Gill stated:, “These developments have started to raise the spectre of stagflation. Policymakers should take every opportunity to increase economic growth at home and avoid actions that will bring harm to the global economy.”
According to the report, energy prices are expected to rise more than 50 per cent in 2022, before easing in 2023 and 2024.
Non-energy prices, including agriculture and metals, were also projected to increase almost 20 per cent in 2022, and would also moderate in the following years.
The report said, “Nevertheless, commodity prices are expected to remain well above the most recent five-year average. In the event of a prolonged war, or additional sanctions on Russia, prices could be even higher and more volatile than currently projected.
“Because of war-related trade and production disruptions, the price of Brent crude oil is expected to average $100 a barrel in 2022, its highest level since 2013 and an increase of more than 40 per cent compared to 2021.
“Prices are expected to moderate to $92 in 2023—well above the five-year average of $60 a barrel. Natural-gas prices (European) are expected to be twice as high in 2022 as they were in 2021, while coal prices are expected to be 80 per cent higher, with both prices at all-time highs.”
Wheat prices were forecast to increase more than 40 per cent, reaching an all-time high in nominal terms this year. That, it stated, would put pressure on developing economies that rely on wheat imports, especially from Russia and Ukraine.
Metal prices were also projected to increase by 16 per cent in 2022 before easing in 2023, but would remain at elevated levels.