Côte d’Ivoire mobilises over $88m to combat soaring prices

By Maureen Songne
Posted on Thursday, 10 March 2022 18:31

At a market in Adjamé, one of Abidjan’s communes, 18 June 2020. © Reuters/Thierry Gouegnon

After Algeria and Senegal, Côte d'Ivoire is introducing legislation to manage inflation, which is affecting the entire region.

On 4 March, during the 8pm news on the national public channel, Souleymane Diarrassouba, Côte d’Ivoire’s minister of trade and industry, announced that a series of measures would be implemented to deal with increasing food inflation.

Between January and March 2022, the prices of petroleum products, particularly diesel, will be partially subsidised thanks to a budgetary envelope of 55bn CFA francs ($91m). With regard to food products, a price ceiling will apply for a period of three months on refined palm oil, sugar, milk, rice, tomato paste, beef and pasta. The list of consumer products and services whose prices are regulated will be extended.

The impact of the conflict in Ukraine

The Ivorian government also wants to have more control over price developments, so that they will depend on local decisions rather than on price fluctuations on international markets.

To achieve this, “prior information” will be provided during the six months preceding any increase in the price of staple foods, followed by “consultation.” To promote the domestic market, exports of staple food products (plantain, cassava, yams, etc.) will be subject to authorisation.

The food sector actors will receive an allowance and the public will be told once the illegal roadblocks have been dismantled. Finally, the government will make additional efforts to inform consumers about the evolution of prices of products and inputs on the international market.

For the same product, says the Ministry of Trade and Industry, inflation varies considerably from one region to another. This phenomenon is said to be due to “a combination of endogenous and exogenous factors.”

The price of oil has risen sharply because of the war between Ukraine and Russia. On 7 March, the price of Brent crude oil increased by 17.8% to reach $139.13 a barrel, the first time this has happened since the 2008 crisis, when it reached an all-time high of $147.50. The cost of maritime transport has also soared, with freight rates rising sharply.

On the domestic front, poor rainfall has “disrupted the agricultural calendar”, resulting in “a shortage of local food supplies.”

Better than Mali or Benin

Inflation in Côte d’Ivoire is also affecting most countries in West Africa and the Maghreb to varying degrees. In a bulletin published at the beginning of March, the Central Bank of West African States (BCEAO) pointed out that the rapid rise in prices in the West African Economic and Monetary Union (Uemoa) zone is mainly linked to food products.

Considering that this rate rose from 6% in December 2021 to 6.5% in January 2022 in Uemoa, Côte d’Ivoire has been rather spared (5.6%) compared to its neighbours such as Mali (8.7%), Benin (7.9%) and Togo (7.5%). World prices for the main food products are reaching record highs, such as those for oil, which have risen by 54% year on year.

Algeria and Senegal have also announced measures to contain the inflationary surge in consumer foodstuffs.

  • At a Council of Ministers meeting, Algeria’s President Abdelmadjid Tebboune decided to freeze taxes on certain food products, which are included in the 2022 finance law.
  • In Senegal, 50bn CFA francs ($83m) have been mobilised to subsidise local rice producers. A reduction of 100 CFA francs ($0.17) on the price of oil, 25 CFA francs on a kilo of “unflavoured broken” rice and 25 CFA francs on sugar has been announced.

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