Some African Countries’ Larger Harvests Could Help Curb Import Demand

Many countries that rely heavily on food imports have watched food price inflation skyrocket over the past three years. Now, yield forecast models in Gro’s Food Security Tracker: Africa point to higher production of corn, wheat, rice, and other staples in some African countries for 2023, which could help reduce their import demand and costs at a time when food insecurity on the continent continues to worsen.  

Underlining the heavy toll from food price inflation on local economies, Nigeria has declared a state of emergency that gives the government extraordinary powers, including deforestation, to expand domestic agricultural production in order to reduce costly imports. 

Gro’s Agricultural Price Inflation Application shows that prices for a consumption-weighted basket of grains, oilseeds, and vegetable oils in Nigeria are up nearly 200% in the past three years, especially following a plunge in the value of the Nigerian naira after the government removed its peg to the US dollar last month and allowed the currency to float freely.  

Although global food commodity prices have declined from their spring 2022 peaks that followed Russia’s invasion of Ukraine, that’s brought only modest relief for import-dependent developing countries because of their weakened currencies. Most food imports are priced in US dollars, inflating the cost when translated into a country’s currency that has lost value against the dollar. And while the US currency is down from its recent highs, it still remains elevated on a historical basis. 

Producing more food domestically could help temper that cost spiral. Kenyan farmers plan to sow additional acreage for both corn and wheat for the 2023/24 season, which will help lift year-over-year production by an estimated 13% for corn and 29% for wheat, according to Gro’s Food Security Tracker for Africa. Larger domestic food stocks could reduce Kenya’s reliance on imports for both staple crops. 

The Gro Food Security Tracker, which was built with support from the Rockefeller Foundation, leverages Gro’s platform and machine learning-based models to show real-time data and projections for the supply, demand, and price of major crops for 49 African countries. The Food Security Tracker is publicly available and can be found here. 

Kenya traditionally sources wheat from Australia, Argentina, and the Black Sea Region. However, last year’s drought-ravaged wheat crop in Argentina and the ongoing war in Ukraine have complicated trade flows to the country. Kenya sources its corn imports from neighboring African countries, which are also seeing higher prices. 

Gro’s Agricultural Price Inflation Application shows food prices in Kenya are up 80% since the start of 2020, when world food price inflation began accelerating. The Kenyan shilling has lost some 28% of its value against the US dollar in that period.

Similar stories are playing out in other countries. In Ethiopia, where food price inflation is among the world’s highest, wheat planted area is projected to increase by 200,000 hectares, or 9%, and corn area by 20,000 hectares in 2023/24. As production is forecast to rise, Ethiopia’s grain imports could fall substantially this year, especially for wheat, according to Gro’s Food Security Tracker.

East African countries also are benefiting from improved drought conditions that hobbled agricultural production last year. Gro’s vegetative health index for Ethiopia’s cropland areas, for example, is at its highest level for this time of year in more than 20 years, as seen in this display from Gro’s Climate Risk Navigator for Agriculture. Kenya’s cropland areas are experiencing “moderate” drought levels, as measured by the Gro Drought Index, but vegetative health readings are slightly above the two-decade average. 

In Tanzania, where food price inflation is up 44% since the start of 2020, rice planted area is forecast to rise by 10% in 2023/24, lifting production and sharply curtailing rice imports. 

Nigeria’s measures to boost domestic production are among the continent’s most far-reaching, such as a half-million-hectare release of land from land banks, including by clearing forests, to increase available farmland. Other measures include expanding irrigation infrastructure and subsidizing farm fertilizer purchases. 

Little improvement is seen for Nigerian production in the near term, however, with 2023/24 rice imports forecast to increase by nearly 5% after flooding hurt domestic output.