Africa is not safe from future price shocks unless
investment in agriculture is stepped up, analysts said this
week although a repeat of the 2008 crisis, when food
commodities prices hit peak levels and millions of people in
Africa were threatened with acute hunger, is unlikely.
Aly Abou-Sabaa, director of agriculture and agro-industries
of the AfDB, said in an interview on Wednesday: In
general, weve seen a reduction in food prices, but they
are still high compared to earlier levels, and still above the
affordability level of low-income populations. Even the price
of fertilizer is still much higher than before the
Sustained high food prices can heighten political
instability, especially in food importing countries already
weakened by conflict, others warned.
Economist Jean-Philippe Stijns of the OECD Development
Centre said: The increase in food prices is a trend that
could derail the recovery and create social tension over
In 2008, poor harvests, high fuel costs and soaring demand
for food commodities from China and India caused a dramatic
hike in food prices in 2008, prompting strikes and riots in
several African countries.
Governments responded quickly with fuel subsidies, export
bans and a reduction of customs fees to ward off social
tension, but these measures absorbed significant amounts of
foreign exchange and continue to place pressure on government
expenditures to this day.
Favourable weather and slower economic growth in Asia has
eased the pressure on food commodities in the world market, and
food and energy prices have dropped since reaching peak
However, in most African countries prices are expected to
remain high over the medium and long term, the UN Food and
Agriculture Organization (FAO) said in a report published
earlier this month.
The cost of the typical food basket is now some 80%
more than what it was in 2002, the report said.
Donor countries widely agree that a policy shift towards
renewed investment in agriculture can boost food commodities
production in Africa. The global context should serve as a
wake-up call for immediate action, according to the
There is a particular opportunity to dramatically
increase smallholder productivity and production, it said
in the report.
But there are many underlying structural problems that hold
back the development of the sector, Abou-Sabaa at the AfDB
said. The greatest challenges for African countries are
poor rural infrastructure, lack of access to markets, and low
prices paid to farmers at the farm gate.
Other major constraints are issues of land ownership
and a lack of sustainable resources of irrigation
At the height of the food crisis, the AfDB released funds
for fertilizers to help produce crops as fast as possible while
some countries received budget aid to cope with increased food
imports. Even though the pressure has eased, Abou-Sabaa said
the sense of instability remained.