Dr. Ismael Fofana_2023 AGRODEP Annual Conference
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The document analyzes the impacts of the Russia-Ukraine war on global markets, particularly on African economies reliant on primary commodities. It highlights the disruptions in trade, varying terms of trade effects, and the consequent implications for poverty across selected African countries through simulation models. Results indicate that different trading patterns influenced by global commodity shocks lead to heterogeneous poverty outcomes in these nations.
Dr. Ismael Fofana_2023 AGRODEP Annual Conference
- 1. www.akademiya2063.org Russia-Ukraine War Induced Global Market Disruptions and Impacts on African Economies: Lessons From Selected African Countries By Dr. Ismael FOFANA AKADEMIYA2063 Director for Capacity and Deployment 2023 AGRODEP Annual Conference ‘Building Resilient African Food Systems amid Health, Conflict and Climate Disruptions’ Kigali, Rwanda | 21-23 March 2023
- 2. www.akademiya2063.org Three years of major disruptions in the global trade and markets of primary commodities, including agri-food commodities Percentage changes in primary commodity prices 2020-2022, Outlook October 2019 vs. Outlook October 2022 Source: Commodity Market Outlook October 2019 and October 2022 (World Bank, 2022) Note: Price changes for “Coal, Australia” = 366% and “Natural gas, Europe” = 714%.
- 3. www.akademiya2063.org Primary commodities weight heavily in the export basket of most African countries 0 10 20 30 40 50 60 70 80 90 100 Lesotho Tunisia Morocco Madagascar Eswatini Liberia Ethiopia Kenya Sierra Leone Guinea Bissau Egypt Seychelles Togo Niger South Africa Sudan Gambia Tanzania Senegal DRC Rwanda Benin Gabon Cabo Verde Cote d'Ivoire Malawi Guinea Uganda CAR Namibia Zambia Ghana Mauritania Burkina Faso Zimbabwe Mozambique Botswana Congo Chad Nigeria Mali Angola Cameroon South Sudan 0 10 20 30 40 50 60 70 80 90 100 South Sudan Liberia Ethiopia Chad Uganda DRC Sudan Gabon Seychelles Ghana Cameroon Niger Sierra Leone Congo Morocco Malawi Tanzania South Africa CAR Madagascar Tunisia Mali CaboVerde Eswatini Kenya Burkina Faso Zambia Angola Guinea Mauritania Nigeria Egypt Guinea Bissau Rwanda Cote d'Ivoire Togo Gambia Namibia Senegal Mozambique Zimbabwe Lesotho Benin Botswana Percentage share of primary commodities in total imports, 2019 Percentage share of primary commodities in total exports, 2019 Source: Calculations from AATM 2022 database (Akademiya2063 and IFPRI, 2022)
- 4. www.akademiya2063.org Heterogeneity in Terms of Trade Shocks Percentage Changes in Term of Trade 2020 2021 2022 Source: Calculations from Commodity Market Outlook (World Bank, 2022) and AATM 2022 database (Akademiya2063 and IFPRI, 2022)
- 5. www.akademiya2063.org Assessment of the distributional growth and poverty effects Estimate the ramifications of the global trade and market disruption for the broader economy in selected African countries Benin Cote d’Ivoire Ghana Kenya Malawi Mozambique Nigeria Rwanda Senegal South Africa Tanzania Tunisia Uganda
- 6. Analytical Framework • Simulation models (Akademiya2063/ReSAKSS Toolbox) Single-Country CGE Models Micro-simulation Models • World Development Indicators database (World Bank) Macroeconomic data • Statistics on international trade (United Nations) Import and export data • World Economic Outlook (International Monetary Funds) Economic Growth Outlook • Primary commodity price database (World Bank) Annual price predictions for 46 primary commodities (released in April and October) Update the Simulation Models Build the Simulation Scenarios Simulation Tools
- 7. Simulation Scenarios “Baseline” scenario: no major changes in the economies’ trajectories in the absence of the crisis for the period 2022-2024. “Ukraine” scenario: disruptions to the individual country economies resulting from the changes in global commodity trade and markets
- 8. www.akademiya2063.org Countries facing improving terms of trade Countries facing deteriorating terms of trade Growth slowed down with increasing pressure on the balance of payment and foreign reserves Changes in GDP Growth in 2022, Percentage Point Ukraine vs. Baseline Scenario Source: Calculations from simulation results (Akademiya2063, 2022)
- 9. www.akademiya2063.org Countries facing improving terms of trade Countries facing deteriorating terms of trade Shocks in global commodity trade and markets produced heterogenous poverty outcomes Percentage Changes in Headcount Poverty Index in 2022, Ukraine vs. Baseline Scenario Source: Calculations from simulation results (Akademiya2063, 2022) Note: International Poverty Line $1.90 (2020 PPP) -1.5 -1.1 0.0 0.9 -0.8 Nigeria Benin South Africa Mozambique Ghana 0.5 3.1 1.3 0.8 4.4 4.5 1.7 Cote d'Ivoire Senegal Uganda Rwanda Malawi Kenya Tanzania
- 10. www.akademiya2063.org 10 Share of Top Export Commodities in Total Exports, MOZAMBIQUE Coal 17.9 Petroleum oils 6.0 Wood sawn 1.9 Tobacco 5.3 Aluminium 24.5 Copper 2.0 Gold 4.6 Share of Top Export Commodities in Total Exports, BENIN Gold 31.8% Petroleum oils 2.6% Soya beans 9.1% Wood sawn 1.2% Cotton 25.4% Trading patterns diversification leads to different poverty outcomes of global commodity price shocks Source: Calculations from simulation results (Akademiya2063, 2022) Countries facing improving terms of trade Source: AATM 2022 database (Akademiya2063 and IFPRI, 2022) Source: AATM 2022 database (Akademiya2063 and IFPRI, 2022) -1.5 -1.1 0.0 0.9 -0.8 Nigeria Benin South Africa Mozambique Ghana
- 11. www.akademiya2063.org Russia-Ukraine War Induced Global Market Disruptions and Impacts on African Economies: Lessons From Selected African Countries THANK YOU MERCI 2023 AGRODEP Annual Conference ‘Building Resilient African Food Systems amid Health, Conflict and Climate Disruptions’ Kigali, Rwanda | 21-23 March 2023