Tensions between Ukraine and Russia have culminated into violent scenes over the past week as Russia invaded Ukraine on 24 February under the leadership of Vladmir Putin. Although the war is happening miles away, Africa is not exempt from its adverse effects. Questions amongst African civilians have arisen since the beginning of the war. Some are displaying concern over what it could mean for countries like South Africa, Kenya and Egypt who are either likely caught in the middle of the two feuding nations or have economic ties, which, given the circumstances, could spell trouble as the war unfolds.
Russia and Ukraine's trade relations with Africa are significant. The two nations play a big part in the agricultural sector. Russia contributes roughly 10% of global wheat exports, and Ukraine contributes about 4%. Looking back at 2020, African nations including Egypt, Sudan, Tanzania, and South Africa imported $4 billion worth of agricultural products from Russia, with wheat accounting for about 90% while Ukraine raked in $2.9 billion. The war could impact grain supply and increase the price of sunflower oil, maize, barley, and soybeans. In addition, Russia's invasion has undoubtedly created a sense of panic regarding global food stability due to imminent disruptions of trade following rising military activity in Ukraine.
Countries such as Egypt, Tunisia, Morocco, Libya, and Algeria face the brunt of increasing bread prices due to the unstable wheat production and supply.
Other Sectors Affected by Inflation
South Africa's direct ties to Russia place the country in a tricky position. Both nations are members of BRICS; therefore, the allyship between the two runs deep, with both countries investing billions of dollars into the other. The timing of the conflict in Ukraine could not have hit South Africans at a worse time as the country has been experiencing a steep increase in petrol prices since 2021. Although Russia is the world's biggest oil producer, EU-imposed sanctions will destabilize markets and reduce business predictability. South African motorists will feel the pinch as oil prices will surge higher.
Chief economist at the Bureau for Economic Research, Hugo Pienaar, highlights a possible positive outcome for the country amidst the war. He stated how the conflict could drive up the price of gold and place South Africa in a position where it could benefit from the disruption of Russia's trade of palladium. South Africa is second to Russia as one of the leading producers of palladium.
According to Patrick Smith, editor of the Africa Confidential publication, the war is an opportune time for African countries to present themselves as alternative oil- and gas producers to Europe. With Russia in a less favorable position to facilitate business as usual, Europe should look to countries like Nigeria and Angola to serve their oil and gas shortages.
For Kenya, unfortunately, the latest developments could impact their foreign currency earnings as Russia makes up one of the five top consumers of Kenyan tea.
The Safety of Africans in Ukraine
African students and citizens in Ukraine could have never imagined the situation they are in currently. Ukraine has for many years attracted young students and workers into their borders with their affordable university fees. In 2020, the country had over 76,000 international students, with Africans amounting to roughly a fifth. However, it has been a struggle for the African natives to evacuate the country as authorities have shut down three airports and the large volume of cars attempting to flee major cities is blocking highways.
There have also been reports of racial discrimination in the past week. For example, Nigerian students have reported that Ukrainian soldiers told them to let Ukrainians cross the border first and not allow any black bodies through. In addition, videos and images have been shared on social media showing evidence of black Africans being denied entry onto trains and threatened with violence.
The unfolding of events has the world at the edge of its seats. As the days roll by, the tensions rise, and the devastation increases. Africa’s fate, unfortunately, lies in the hands of the two feuding nations, virtually powerless until the end of the war. Disruptions to trade will mean that African households will see tougher times financially with the gradual inflation of basic products like bread and gas. On the other hand, the sectors that will benefit from the unstable production of these products may want to take advantage. Only time will tell what the lasting effects of this crisis will be.