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Rising world food prices may soon hit Africa hard, but could be a future boon

The World Bank warned Tuesday that global food prices are reaching 'dangerous' levels. Africa is bracing for short-term trouble, but sustained high prices could spark agribusiness investment across the continent.

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According to the United Nation’s Food and Agriculture Organization (FAO), food prices in December reached their highest level, topping even the 30-year highs of 2008. The FAO’s Food Price Index showed increases in all areas, including food grains, although the greatest increases were in sugars, oils, and fats. The benchmark price of US wheat rose 50 percent compared with the same time last year, while the price for corn (a common food staple in Africa) was 45 percent higher than last year.

Given how little margin many rural and urban poor African citizens have for survival, rising food prices can often have political ramifications, a fact that the former president of Madagascar, Marc Ravalomanana learned in March 2009. Mr. Ravalomanana was overthrown in a bloodless coup d’etat, after an agricultural land deal with Korean conglomerate Daewoo came to light. The deal would have given Daewoo a 99 year lease on nearly 50 percent of Madagascar’s arable lands, with all of the produce being exported to South Korea.

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Rising food prices may have also exacerbated the political tensions in the North African countries of Tunisia and Egypt, where citizen revolts ultimately toppled their long-ruling authoritarian governments.

Here in South Africa, bread prices have risen 24 percent over the past year and 61 percent over the past three years, according to the Sunday Times newspaper in Johannesburg. Bread is a staple food for many working-poor South Africans, often the only source of food for the midday meal.

The problem of high food prices is worse, of course, in those areas where the transportation of food is restricted by conflict. In the East African nation of Somalia, maize prices were 79 percent higher than last year and sorghum prices were 81 percent higher, a staggering fact when one considers that Somalia is flooded with foreign-donated food aid, and that more than half of the Somali population relies almost entirely on (free) food donations.

Urban poor to be hit hardest

“Those who are hit the hardest are going to be the urban poor,” says Mhango. “The rural people will be able to eat whatever excess they have produced, and they'll manage to scrape by. But ... in the slums ... where you can’t grow food because of the intense congestion, people are likely to have a much harder time.”

“That is going to be increasingly difficult in an election year like this one,” she adds, referring to the fact that some 30 African countries are scheduled to hold elections over the next 12 months. “Higher food prices can become a political issue.”


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