Investor Presentaiton
Both Russia and Ukraine are key players in the global agrifood market and account for more than 25 percent of the world's trade in wheat,
more than half the global trade in sunflower oil, and 30 percent of global barley exports. This dominance poses a major challenge for
Africa. In 2020, wheat and maize accounted for 41.6 percent (or $3.5 billion) of Russia's $8.5 billion merchandise exports to Africa. In the
case of Ukraine, wheat, maize, and vegetable fats and oils accounted for 58 percent ($3.8 billion) of exports to Africa.
The surge in prices of food, energy, and other commodities will, however, create winners and losers across Africa. Energyexporting
countries stand to gain from higher than predicted prices, provided these countries have excess production capacity to respond to the
positive price shock and shore up export earnings. For energy and net food-importing countries, higher energy and other commodity
prices coupled with prolonged gridlock in global supply chains could exacerbate inflationary pressures. Given that most African
countries are net energy importers - as they export crude oil and import refined petroleum products due to lack of domestic refining
capacity the overall economic impacts are on the downside.
Indeed, while net oil and other commodity exporting countries could benefit from higher prices, the impact on net energy and
commodity importing peers is likely to offset these gains, resulting in higher inflation and constrained economic activity, this could slow
economic recovery from the impacts of the COVID-19 pandemic. Net crude oilexporting countries with fuel subsidy regimes could
experience fiscal shocks due to the higher price of imported refined petroleum products. Beyond energy and commodity prices,
both Russia and Ukraine are significant sources of raw materials such as platinum group elements, nickel, and neon gas, which are
critical components for manufacturing parts used in the automotive industry, consumer electronics, and renewable energy devices.
For Morocco and South Africa, vehicle production and exports are likely to be constrained by the ongoing global shortages in vital
car parts such as semiconductor chips and catalytic converters, while the supply of chip reliant consumer electronic goods might
experience some delays and elevated prices.
Key messages
Africa's GDP grew by an estimated 6.9 percent in 2021—a strong recovery from the pandemic-induced contraction of 1.6
percent in 2020.
Growth was highest in North Africa (11.7 percent) and East Africa (4.8 percent).
Macroeconomic fundamentals have generally improved, but considerable challenges remain in the medium term, due largely to
the persistence of the pandemic effect and volatility induced by the impact of the Russia-Ukraine conflict.
Africa's low vaccination rates are constraining faster economic recovery and increasing the health impact of COVID-19.View entire presentation