The IMF and World Bank warn of the danger of inflation in Africa

Published on : 18/04/2022 – 00:12

As the spring general meetings of the IMF – the International Monetary Fund – and the World Bank open this week, the two institutions are warning of the deterioration in the global economic situation. After the Covid-19 pandemic, the war in Ukraine adds further uncertainty. Inflation has become a global and worrying phenomenon for social stability. For Africa, the picture is bleak. Although economies as a whole will continue to grow, food insecurity and hunger are likely to increase.

In Africa as in the rest of the world, the disease is called “inflation”. Food prices are soaring and as World Bank President David Malpass explained last week, the consequences are tragic. ” It is expected that every time food prices increase by one percentage point, ten million people will fall into extreme poverty », alerted David Malpass.

Inflation started with the Covid-19 pandemic, and accelerated with the war in Ukraine. Russia and Ukraine are two major players in the grain and fertilizer markets and the conflict is disrupting supply circuits, observes Kristalina Georgieva, Managing Director of the IMF. ” Wheat and maize prices are soaring, and leaders in Africa and the Middle East tell me supplies are tight. Food insecurity is a serious concern. We must act now, through a multilateral initiative to strengthen food security she says.

Risks of social destabilization

The IMF and the World Bank are alerting leaders to the risks of social destabilization posed by inflation. Albert Zeufack is the World Bank’s Chief Economist for Africa.

This could lead, as we are already seeing in certain countries such as Sudan and Zimbabwe, to social instability in the cities, where households will experience a fairly significant drop in their purchasing power. We have already registered in some African countries social movements protesting against this inflation. It is possible that this could spread to countries where the political situation is already unstable and where trust between the rulers and the ruled is quite low.

A new tool for vulnerable countries

African countries have already taken steps to mitigate the high cost of living and avoid food riots. But, in the past two years, national budgets have already been called upon to combat the Covid-19 pandemic. And today, the room for maneuver is small. The World Bank is aware of this.

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« We have worked with Angola for example which today has one of the most expansive social protection programs in Africa explains Albert Zeufack. ” I believe that the entire international community should assist Africa in these difficult times, especially since these crises are exogenous to Africa. Whether it’s Covid-19, the Ukrainian crisis or the climate crisis. Africa is not the cause, but suffers the most harmful consequences. »

The IMF has just announced the creation of a new tool for vulnerable countries. Endowed with 45 billion dollars, it should make it possible to strengthen resilience in the face of climate change and pandemics.

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