Climate change is intensifying food insecurity across sub-Saharan Africa, where Russia鈥檚 war in Ukraine and the pandemic are also adding to food shortages and high prices.
Climate change is intensifying food insecurity across sub-Saharan Africa, where Russia鈥檚 war in Ukraine and the pandemic are also adding to food shortages and high prices.
Climate events,听, are disproportionately common in the region. One-third of the world鈥檚 droughts occur in sub-Saharan Africa, with Ethiopia and Kenya currently enduring one of the worst in听.听
Countries such as Chad are also being severely impacted by torrential rains and floods.
The resulting rise in poverty and other human costs are compounded by cascading macroeconomic effects, including slower economic growth.听
A听听examines how fiscal and financial policies and reforms such as technology transfer can reduce this damage and help countries adapt.
Food supplies and prices are especially vulnerable to climate change in sub-Saharan Africa because of a lack of resilience to climatic events, food import dependence, and excessive government intervention.
Most people live in rural agricultural and fishing communities that can鈥檛 afford infrastructure to protect them from adverse weather. For example, they depend on rain to water their crops, and less than 1 per cent of arable land is equipped with听irrigation.
Weather-sensitive domestic food production results in heavy reliance on imports, with some 85 per cent coming from outside the region. While food imports can provide a buffer to domestic shocks, inflation spurred by weather shocks in regions where imports are produced can be passed on to consumers.听
Similarly, weather events that raise the cost of transportation are also passed on. The resulting high food-import costs can erode foreign reserves and weigh on exchange rates, contributing to more rapid price gains.
Against this backdrop, governments often try to help by intervening in agricultural production and food distribution. Untargeted interventions can be inefficient and weigh on national budgets, inflate food prices, impede competition, and reduce crop yields.听
For example,听price controls听and numerous and lengthy regulatory processes contribute to shortages by disincentivizing food production, storage, and trade.听
Similarly,听subsidies for fertilizer听and seeds drive overuse and suppress crop diversification.
On the other hand, targeted government involvement can have merit, such听as supporting research听and development in building resilience and agricultural productivity.听
Prioritizing policies around those that best protect the poor will be key amid financing and capacity constraints.
Fiscal and financial policies
Protecting food production and distribution from weather events begins with听climate-resilient infrastructure. This type of public investment also creates jobs and can catalyze private investment.
Consider, for example,听solar power听that facilitates irrigation, water access, and temperature control for food storage. Equally impactful is a听flood barrier听that protects ports and roads critical to food distribution.
Digitalization听is also crucial. It gives farmers access to early warning systems and mobile banking, as well as platforms to purchase fertilizers, seeds, or sell produce, helping to connect small producers to large vendors.
Social cash transfers听that are targeted and far-reaching help people buy food and rebuild after weather shocks. They further allow families and small businesses to invest in resilience-building equipment and technology. By offering people control of the support they receive these cash transfers are more effective at containing inequality than agricultural subsidies.
Access to finance听from private markets can play a similar role to social assistance. Raising it requires developing financial markets, which can take time. In the interim, micro-finance or public-private partnerships can help provide credit to people who currently don鈥檛 have access through banks.
To this end, establishing collateral through advances in听property rights听is crucial. With World Bank support, Mozambique and Tanzania are expanding title and survey registers and developing digital land administrative services.听
A pilot project in Ghana uses听blockchain technology听to improve incomplete or missing land records.
Cost-effective structural reforms
Trade liberalization听and import diversification could help stabilize regional food supply and prices. Zambia鈥檚 big maize harvests, for example, could have helped offset shortfalls elsewhere in Southern Africa if not for a ban on exporting the crop.
Access to larger markets听can incentivize investment in agricultural production networks and value chains. It can also help spread knowledge鈥攕uch as how to plant drought-resistant crops鈥攁nd spur competition.听
One positive step in this direction is the听听among the 54 countries, which covers most goods and services.
Empowered听producer organizations听can reach remote climate-vulnerable agricultural communities. This would help spread new technologies such as digital pest-control devices and high-yield seeds that tolerate heat and drought and improve climate adaptation training and market information.听
Aggregating production听and selling directly to consumers can help to increase negotiating power, which in turn reduces storage costs, lengthens contracts, expands profit margins and opens access to new markets.
By streamlining and better targeting听regulations, governments can help farmers build resilience. For example, appropriate water-use regulations reduce the cost for farmers to establish and expand irrigation systems.听
Along the same lines, efficient听seed registration, like in Kenya, multiplies seed supply and access to resilient seeds.听
Finally,听fertilizer testing, labeling, and registration requirements help farmers access contaminant-free fertilizers appropriate for specific weather shocks, soil, and crops.
Financing, capacity development, and transfer of technology and know-how will be key to supporting the policies outlined above. With mounting debt and limits to raising taxes, countries in sub-Saharan Africa will need grants and concessional finance.听
Development partners can also support resilience-building research and can propagate climate and financial literacy.
The IMF is supporting countries in these efforts including through climate-oriented public financial management advice and lending facilities such as our Resilience and Sustainability Trust.听
Soon to be operational, this new lending facility will provide longer-term affordable financing to address climate change and other challenges.
This article was first published on the听
