ZAMBIA NEEDS TO INCREASE FOOD PRODUCTION TO REDUCE THE NEGATIVE IMPACT OF THE WAR IN EASTERN EUROPE ON ITS ECONOMY
By Alexander Nkosi
According to business today, Russia and Ukraine constitute 25% of global wheat exports. As of this week Russia has suspended wheat exports, and given that the war is being fought in Ukraine, it will also be unable to export. There will be a reduction in the supply of wheat. Demand for substitutes will rise and global prices for both wheat and substitutes will increase. The rising prices of crude oil will further drive food prices up.
While Zambia will also be badly affected by high fuel prices and general poor performance of the global economy, it has an opportunity to increase production of wheat and maize. In view of this, government should actively engage farmers to discuss how they can be supported to increase all year round production of wheat and maize. ZNS can also increase wheat and maize production since it has huge irrigated farms.
Zambia should proactively take advantage of this to increase production of food. This will help reduce the expected negative impact of the war. The likely negative impact of the war will include: 1) Reduction in aid as donors will turn their focus to supporting Ukraine. The USA Congress approved USD 13.6 billion emergency aid to Ukraine. They will also focus more on supporting their domestic economies which will also be badly hit. 2) Reduction in capital inflow as investers will most likely withhold their expansion plans and focus on keeping their current investments going. 3) General rise in prices of imported goods and services. 4) All these factors will lead to kwacha depreciation. This will also affect 2022 budget performance and the pace of economic recovery.
This is why we need to work proactively, project economic impact and work on increasing food production amidst all these challenges. It won’t be easy as the cost of producing food will also go up but we can engage farmers and explore ways of supporting them. It is good that the President is actively engaging the world bank group as this can be a source of support for the agriculture sector through concessional loans.
Thank you.