Gilbert Ekugbe
The Lagos Chamber of Commerce and Industry (LCCI) has stated that the ongoing war between Russia and Ukraine would likely make the world’s hunger crisis even tougher to fight.
This is even as a United Nations report found that more than 70 per cent of Africa’s economies are at severe risk from Russia’s war in Ukraine.
The war is supercharging a three-dimensional crisis – food, energy and finance – that is pummeling some of the world’s most vulnerable people, countries and economies,” the UN Secretary-General, Mr. Antonio Guterres said.
The President, LCCI, Asiwaju Michael Olawale-Cole, explained that the countries involved are two of the world’s major suppliers of staple grains like wheat, corn, sunflower, potash.
Olawale-Cole maintained that Nigeria’s food supply has started to feel some pressure as it imported four per cent of its wheat from Ukraine and 27 per cent of wheat from Russia in 2021.
He said that data from the National Bureau of Statistics (NBS) showed that Russia was the sixth major exporter to Nigeria as of the third quarter of 2021 coming only after China, India, the USA, Netherlands, and Belgium in that order.
He however predicted that rising prices would remain a major concern for businesses and households, especially given the challenges associated with insecurity, infrastructure deficit, and foreign exchange fluctuations, all of which are factors that have continually triggered inflation in Nigeria in the past months.
“It is expected that the war in Ukraine which has disrupted supply chains of oil and gas, and food commodities will, in the short-term drive inflationary pressures northward,” he added.
Olawale-Cole added that the agriculture sector showed some evidence of impacts from heightening insecurity and lingering supply chain disruptions as it recorded real growth of 3.58 per cent (year-on-year), an increase of 0.16 per cent points when compared with the Q4 2020, and an increase of 2.36 per cent points from Q3 2021 which recorded a growth rate of 1.22 per cent.
“However, the sector contributed 26.84 per cent to overall Gross Domestic Product (GDP) in real terms in Q4 2021. This is lower than the contribution in Q4 2020 and lower than Q 2021 with 26.95 per cent and 29.94 per cent respectively,” he noted.
He advised government at all levels and trade finance institutions to channel their efforts toward the enhancement of value addition to non-oil exports.
In his words: “This can be supported by the establishment of Special Economic Zones (SEZs) that facilitate agro-processing for export. We also need more investment in export infrastructure, port operation efficiency, tackling the high cost of production, and boosting the supply-side of the foreign exchange market to improve liquidity and ease access to foreign exchange, ” he added.
