2024-03-28 16:57:03
Conflicts, strong dependence on natural resources, growing economic and social inequalities, galloping demographic growth and high poverty rates… These are the evils currently facing the Southern Africa’s most vulnerable economies.
Added to these numerous challenges are the disastrous consequences of El Niño. By resulting in episodes of drought, this climatic phenomenon endangers already fragile food security and weakens the already highly vulnerable economies of southern Africa by fueling food inflation. Firms also face a negative supply shock that pushes them to implement costly adaptation measures and reduces the potential growth of the economy.
These countries have already received international aid to deal with the consequences of El Niño, but the unpredictable impact of the phenomenon makes the amount of aid needed uncertain.
Anticipated poor harvests
El Niño is one of the two phases of the ENSO (El Niño-Southern Oscillation) climate phenomenon. It is characterized by a warming of the eastern tropical Pacific Ocean, while La Niña, the second component of ENSO, results in a cooling of these oceans. El Niño occurs on average every two to seven years and lasts between 3 and 12 months. Started during the summer of 2023, El Niño will most likely last at least until April 2024 before La Niña takes over.
Whose consequence of below-average precipitation in southern Africa, El Niño manifests itself in episodes of drought. Thus, the 1991-1992 episode triggered the 1991-1992 drought in southern Africa. More recently, the 2015-2016 episode was responsible for a global food crisis affecting 40 million people in southern Africa.
While three-quarters of the population of southern Africa’s most vulnerable economies are already food insecure (moderate and severe between 2020 and 2022), El Niño might make it worse in the short term. Drought episodes associated with El Niño will in fact probably reduce agricultural yields, particularly those of corn, the growing cycle of which extends from November to March, a cycle which depends 90% on precipitation. However, corn represents nearly 70% of the region’s cereal production.
It is already anticipated that in 2024 the harvests of basic products in southern Africa will be lower than the averages initially planned, particularly for maize. This is all the more damaging as maize prices have already reached historic levels in Malawi and Zambia where, during 2023, they will have more than doubled and tripled respectively (Graph 1). This is why, to deal with the food emergency, the government of Zambia has already announced on February 20, 2024 the suspension of its corn exports.
Past episodes of El Niño are rich in lessons. In Malawi, two out of three events coincided with a reduction in maize harvests of 22.5% on average, even though this cereal provides two-thirds of the national calorie intake. The poor harvests anticipated for 2024 will therefore fuel the rise in the price of corn, reinforcing the inflationary tensions already observed in southern Africa.
Households and businesses affected
The preponderance of cereals, particularly corn, in the household consumption basket, coupled with a sharp increase in its price, is already resulting in an acceleration of inflationary tensions in certain economies in the region. Thus, Malawi saw its food inflation sharply accelerate, going from 30.5% in January 2023 to 43.6% in December 2023 (year-on-year). These inflationary tensions might persist because, in addition to impacting the price of corn, El Niño also affects the prices of other food raw materials. explaining nearly 20% of their variations.
The potential for continued high food inflation in these vulnerable economies therefore penalizes household purchasing power. And all the more so since in low-income countries, the majority in southern Africa, food constitutes the half of household consumption expenditure.
In addition to materializing in a fall in household purchasing power, El Niño will also affect businesses, as electricity production relies largely on hydroelectric dams. In 2021, hydroelectricity is in fact the primary source of electricity production for the most vulnerable southern African countries (graph 2), except for Madagascar where oil occupies first place. However, with the drying up of rivers caused by El Niño, there is a risk of power cuts.
This is what is currently happening in Zambia where the severe drought linked to El Niño is resulting in power outages of up to 8 hours per day. These power cuts have multiple impacts on business activity. They result in a drop in effective activity times which pushes companies to invest in adaptation strategies by having, for example, recourse to electricity generators whose use results in a cost 3 times higher than that of the public electricity network in Africa.
The uncertainty and additional costs generated by power cuts also have longer-term impacts as they discourage business investment in physical capital, which affects potential growth. This slowdown is all the more problematic as countries have little budgetary room for maneuver to deal with the multiple consequences of El Niño. In this context, international aid is crucial.
The Girl arrives
Initial aid amounting to $12.8 million was released in September 2023 by the United Nations World Food Program to fight once morest the drought caused by El Niño in Lesotho, Madagascar, Mozambique and Zimbabwe, making it possible to help 550,000 people. To this emergency aid is added the United Nations Food and Agriculture Organization (FAO) plan “Anticipating El Niño: mitigation, preparedness and response plan for southern Africa, 2023-2025”.
This plan, launched in November 2023, is intended to reduce the impact of the El Niño phenomenon on farmers and the food security of the most vulnerable populations, requiring $128 million. To do this, the FAO suggests, among other things, strengthening existing warning systems based on monitoring weather conditions, promoting drought-resistant crops and water-saving irrigation techniques.
As Southern Africa’s most vulnerable economies face the followingmath of El Niño, they might get some respite from the appearance of La Niña very soon. This second phase of ENSO expected to bring above average precipitation improving pasture regeneration and agricultural production, but also bringing with it a risk of increased flooding.
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