Africa: World Bank warns of civil unrest as donors focus on Ukraine

Supply shocks, including the Ukraine-Russia conflict, are stoking inflationary pressures on the continent and this is eroding the urban poor’s purchasing power, according to Albert Zeufack, the World Bank’s chief economist for Africa.

A further cause for concern highlighted by the multi-lateral finance institution is the likelihood of aid agencies cutting emergency funding from conflicts in West Africa and droughts in East Africa while redirecting the support to Ukraine.

Speaking at the release of the World Bank’s Africa’s Pulse report on Wednesday 13 April, Zeufack said: “The most vulnerable populations’ consumption basket, especially in our cities, includes more imported food. This is where there could be a risk of social strife as these urban populations are seeing their purchasing power being considerably reduced.”

Knock-on effects

Disruptions in the supply of sunflower seeds and seed oil caused by the Ukraine-Russia conflict are exerting upward pressure on the price of palm oil – a staple in Sub-Saharan African households, notes the World Bank in the report.

“One number that keeps me awake at night is that Africa imports more than $40bn worth of food every year while having the potential to be the bread basket of the world. This is an opportunity for us to rethink our agriculture and to boost its productivity,” Zeufack said.

From March 2021 to February 2022, more than four out of five countries in Africa experienced year-on-year food inflation exceeding 5%, while nearly half recorded double-digit food inflation, shows data analysed by the World Bank.

“Of the 43 economies with the highest poverty, a third are fragile and conflict-affected countries. Households in these countries face multiple deprivations, including monetary,” wrote World Bank economists in the report.

Where the fault lines lie

The World Bank points to Sudan, where widespread protests have broken out in cities, including Khartoum, over rising fuel, electricity and bread prices, as an example of how economic fragility and political instability drive civil strife.

The institution states that rising insecurity and conflicts in the Sahel region – Burkina Faso, Chad, Mali, Mauritania, Niger and north-eastern Nigeria – could hamper the economic recovery seen in most Union Economique et Monétaire Ouest Africaine countries, while creating instability in the entire subregion.

“The situation in the Sahel is worsening with an increasing incidence of coups. This instability would increase uncertainty and hold back investment, especially FDI [foreign direct investment], which the subregion needs the most. The conflict could negatively affect the governance of the … [monetary union] as a bloc, damage institutions, and create more countries affected by fragility, conflict, and violence and failed states,” the World Bank said.

Furthermore, persistent conflicts could bring more instability and threaten the African Continental Free Trade Agreement, the World Bank has warned.

Donor dollars

In addition to the economic- and conflict-induced hardships, the institution has cautioned about a reallocation of donors’ portfolios away from the continent to increase assistance to Ukraine in the near term.

“Aid organisations are reporting that donors have cut assistance to Burkina Faso by 70% to support operations in Ukraine – with disastrous consequences for the more than 1.7 million people fleeing from jihadist violence,” the World Bank said.

In Somalia, the conflict in Ukraine “may create funding problems for a drought that has affected a third of the population,” according to the World Bank.