The African Development Bank (AfDB), has reported that around 15 million individuals in Africa were plunged into poverty in 2022 as a result of elevated food and energy costs.
Nevertheless, the AfDB noted that the influence of rising energy prices on poverty was more pronounced than that of food prices.
This disparity arose because the escalation in energy costs directly impacted household earnings, whereas the adverse effect of elevated food prices was somewhat counteracted by augmented household income from net sales.
“In Africa, the additional number of people falling into extreme poverty due to energy price inflation is estimated at 10.2 million, bringing the combined poverty effect of soaring food and energy prices to about 15 million people,” the bank noted.
This information was detailed within the African Development Bank’s (AfDB) 2023 West Africa Economic Outlook report, which highlighted a notable 10% surge in the region’s average poverty rate from 2019 to 2022.
The report also identified that, in comparison to a counterfactual scenario, the international poverty rate, defined by the US$2.15-a-day poverty line, saw an upturn in nine West African countries.
Among the observations, it was noted that the average household well-being diminished in 12 out of 14 countries, collectively resulting in an average actual income decline of 0.82%. The AfDB underscored that this decline disproportionately affected the more economically disadvantaged households.
“The fall in real household per capita income due to high global food and energy prices has impacted household welfare and exacerbated poverty and inequality in African countries,” AfDB reported.
The report cautioned that prolonged increases in the prices of food and energy could yield lasting ramifications for prosperity in numerous African nations, further exacerbating issues of poverty and inequality.
In response, the Bank urged African governments to adopt proactive measures encompassing monetary, fiscal, and structural policies to counter the repercussions of mounting inflation and subdued economic growth.
The AfDB also advocated for heightened support towards fostering a pro-growth structural transformation, which is crucial for sustaining rapid, sustainable, and inclusive economic expansion.
As Russia initiated its invasion of Ukraine from February to March 2022, crude oil prices escalated by approximately 20%, surging from $93.5 per barrel per day (bpd) to $112.4 bpd. Throughout the period from March to October 2022, the average stood at $102.8 bpd in Africa.
In a similar trajectory, wheat prices experienced a surge of approximately 28%, climbing from $364.9 per metric ton (mt) in February 2022 to $446.5 per mt in March 2022. Between March and October 2022, the average price was $427.2 per mt.
Similarly, fertilizer prices also underwent an increase of around 22%, soaring from $547.1 per mt in February 2022 to $668.9 per mt in March 2022. The average price from March to October 2022 settled at $624.9 per mt.