Food Inflation in Sub-Saharan Africa: Causes and Policy Implications

Alper, C. Emre; Hobdari, Niko; Uppal, Ali

doi:10.2139/ssrn.2924352

Cited by 3 publications

(9 citation statements)

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“…The relative strength of a country's currency with respect to its trading partners affects the costs of imported food items in domestic markets. This effect depends on the exchange rate pass-through to domestic prices for tradable staple foods (Alper et al 2016). After the onset of the pandemic, there were initially sharp broad-based currency depreciations in 2020 in our sample, followed by different speed recoveries (Unsal et al 2020).…”

Section: Global Food Prices and Exchange Ratesmentioning

confidence: 80%

“…Many domestic and external factors are related to food prices in Sub-Saharan African economies (Alper et al 2016). Supply factors such as domestic food production, net imports, and transport constraints affect the cost of staple foods in local markets.…”

Section: A Primer On the Drivers Of Staple Food Pricesmentioning

confidence: 99%

“…We now turn to the price effects for imported food staples (Alper et al 2016). The extended specification includes the change in REER interacted with a dummy for highly imported staples, that takes 1 if the net import dependence of a staple exceeds 75 percent and 0 otherwise.…”

Section: B Exchange Rates Effects For Imported Staplesmentioning

confidence: 99%

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Staple Food Prices in Sub-Saharan Africa: An Empirical Assessment

Unsal¹,

Spray²,

Okou³

2022

IMF Working Papers

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This paper analyzes the domestic and external drivers of local staple food prices in Sub-Saharan Africa. Using data on domestic market prices of the five most consumed staple foods from 15 countries, this paper finds that external factors drive food price inflation, but domestic factors can mitigate these vulnerabilities. On the external side, our estimations show that Sub-Saharan African countries are highly vulnerable to global food prices, with the pass-through from global to local food prices estimated close to unity for highly imported staples. On the domestic side, staple food price inflation is lower in countries with greater local production and among products with lower consumption shares. Additionally, adverse shocks such as natural disasters and wars bring 1.8 and 4 percent staple food price surges respectively beyond generalized price increases. Economic policy can lower food price inflation, as the strength of monetary policy and fiscal frameworks, the overall economic environment, and transport constraints in geographically challenged areas account for substantial cross-country differences in staple food prices.

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Section: Global Food Prices and Exchange Ratesmentioning

confidence: 80%

Section: A Primer On the Drivers Of Staple Food Pricesmentioning

confidence: 99%

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Staple Food Prices in Sub-Saharan Africa: An Empirical Assessment

Unsal¹,

Spray²,

Okou³

2022

IMF Working Papers

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“…Studies have further examined the connectedness between oil and food prices in Africa and Nigeria (Rangasamy, 2010; Durevall et al ., 2013; Alper et al ., 2016; Udoh and Egwaikhide, 2012; Binuomote and Odeniyi, 2013; Nwoko et al ., 2016; Fasanya and Akinbowale, 2019; Fasanya et al ., 2019; Tule et al. , 2019; Adeosun et al ., 2021a; Ogede and Ajayi, 2022).…”

Section: Literature Reviewmentioning

confidence: 99%

“…, 2019; Adeosun et al ., 2021a; Ogede and Ajayi, 2022). Alper et al . (2016) showed that high food prices are driven by non-tradable foods, and they further observed an incomplete transmission from world food and oil prices and the exchange rate to local food prices in SSA.…”

Section: Literature Reviewmentioning

confidence: 99%

Revisiting the oil prices–domestic food inflation nexus in Nigeria: the role of global geopolitical risk

Adeosun

Tabash

Anagreh

2023

AJEMS

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PurposeThis study examines the influence of the global geopolitical risk (GPR) on the relationship between oil prices and domestic food prices under the augmented Phillips curve framework.Design/methodology/approachUsing monthly data on Nigeria from January 1995 to December 2021, the authors accommodate symmetry and asymmetry by adopting the linear and nonlinear autoregressive distributed lag, linear and nonlinear Granger causality tests.FindingsThe study establishes the positive and significant effects of both oil prices and GPR on food prices in the long and short run, though with a small magnitude in the short run. The asymmetric model shows that, while oil price shocks (positive and negative) exert a positive influence on food prices in the long-run, the effects of oil price shocks differ when accounting for GPR in the short-run. The coefficients of the interactive term, being the moderator of GPR between oil-food prices, are positively significant across models, suggesting that they jointly influence food prices when assuming linearity. The nonlinear model shows that the positive and negative components of interactive terms exert a positively significant influence on food prices, even though food prices tend to be more reactive to positive oil price shocks. The robustness checks show a unidirectional causal flow from oil prices and GPR to food prices under the linear and nonlinear models.Originality/valueThe authors examine the moderating effect of the newly developed global GPR index of Caldara and Iacoviello (2022) on the oil–food inflation relationship in Nigeria by applying the symmetric and asymmetric approaches.

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Climate Change and Inflation in Eastern and Southern Africa

Odongo¹,

Misati²,

Kamau³

et al. 2022

Sustainability

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This study analyzes the dynamics of key climate change indicators and their implications on food prices in Eastern and Southern African Countries. The study uses descriptive and quantitative analysis of monthly data covering ten countries over the period 2001 to 2020. The descriptive analysis reveals that the sampled countries have experienced various climate change events with increasing intensity in the last two decades. Additionally, three of the countries in the sample ranked in the list of countries most affected by extreme weather events in 2019 are at risk of either frequent events or rare but extraordinary catastrophes. The quantitative analysis showed that supply shocks measured using rainfall amounts and imported food price inflation are the main determinants of food inflation, whereas oil prices, subsidies, and imported inflation are the key determinants of overall inflation. At a macro level, the analysis shows that all countries have various climate change policy initiatives in place but are still vulnerable to climate change risks. This implies a need for sector-specific climate change policy options that are most effective. In addition, the adoption of renewable sources of power such as wind and solar and appropriate irrigation practices is important.

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Food Inflation in Sub-Saharan Africa: Causes and Policy Implications

Cited by 3 publications

References 0 publications

Staple Food Prices in Sub-Saharan Africa: An Empirical Assessment

Staple Food Prices in Sub-Saharan Africa: An Empirical Assessment

Revisiting the oil prices–domestic food inflation nexus in Nigeria: the role of global geopolitical risk

Climate Change and Inflation in Eastern and Southern Africa

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