5 February 2011

Africa Better Prepared for Jump in Food Costs, World Bank Says

Africa’s increased investment in agriculture over the past few years has left it in a better position to weather the jump in global good prices in 2010, the World Bank’s African vice president said.
Global food costs rose to a record in December on higher sugar, grain and oilseed prices, the United Nations said on Jan. 5, exceeding levels reached in 2008 that sparked riots in African nations including Somalia, Burkina Faso and Cameroon.
“The situation is different to 2008-09 when many of the African countries were really caught in a bind,” Obiageli Ezekwesili said in an interview yesterday in Addis Ababa, the Ethiopian capital. “Today what we have is a more ebullient harvest environment.”
Rising food costs were one of the concerns of the protesters in Tunisia that forced President Zine El Abidine Ben Ali to flee the country on Jan. 14, and also of those currently demanding the resignation of President Hosni Mubarak in Egypt. Increased food production in the rest of Africa reduces the likelihood of social unrest spreading further south.
Investment since 2008 in infrastructure, irrigation, fertilizer and seed technology has reduced reliance on grain and rice imports, particularly in West African countries, Ezekwesili said.
Farming Rediscovered
The 2008 unrest led to “a rediscovery of the importance of agriculture and food security,” Ezekwesili said. “Those that have made the reorientation have seen much more progress. A significant number of African countries are now able to have agricultural productivity growth of 3 percent per annum. It was below 1 percent before.”
French President Nicolas Sarkozy accused commodity speculators of “extortion and pillaging” in an address to the African Union on Jan. 30, blaming them in part for the jump in world food prices. The premier promised to take action against traders during his leadership of the G8 and G20 this year.
Instead of clamping down, “light touch regulation” to improve information on the quantity and quality of food stocks should be introduced, Ezekwesili said.
“Having a system that allows transparency helps to reduce the opportunities for rent seeking and speculation that are inimical to the needs of the poorer people,” she said.
Spreading the benefits of projected economic growth of 5 percent for the continent this year to the 70 percent of Africans working in agriculture will also help stave off social unrest, she said.
To contact the reporter on this story: William Davison in Addis Ababa via Johannesburg at pmrichardson@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.

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