Phave a break. Two years following the appearance of the Covid-19 pandemic, the African continent is once more facing a major crisis. This Thursday, March 10, Kristalina Georgieva, Managing Director of the International Monetary Fund, warned that the war in Ukraine, which comes in the context of post-Covid-19 recovery, “threatens to undo some” of the progress made on the continent. “Africa is particularly vulnerable to the impacts of the war in Ukraine through four main channels: rising food prices, rising fuel prices, declining tourism revenues, and potentially more difficulty accessing markets. of international capital”, indicated the managing director of the IMF, at the end of a meeting organized on March 9 with the African finance ministers, the governors of the African central banks and the representatives of the United Nations Economic Commission for the Africa (ECA).
All reports are unanimous: rising food prices have contributed to rising inflation, especially in North Africa and sub-Saharan Africa.
In this context, several States such as Algeria, Senegal and recently Côte d’Ivoire have announced strong measures to preserve the purchasing power of populations. For Côte d’Ivoire, several factors explain the high cost of living: the Covid-19 pandemic, the sanctions once morest Mali and the war in Ukraine.
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The government’s plan to fight the high cost of living
But Abidjan intends to pull out all the stops to meet the challenge. In total, the country provides an envelope of more than 80 million euros. Already nine measures were announced on March 4, by the Minister of Trade and Industry, Souleymane Diarrassouba, in the 8 p.m. newspaper on the national public channel. Thus, the government introduced a partial subsidy of the prices of petroleum products, in particular diesel, to avoid the impact on the cost of living, for an amount of regarding 55 billion CFA francs.
Among the urgent measures, the State announces the cap over a period of three months on the prices of refined palm oil, sugar, milk, rice, concentrated tomatoes, beef and pasta . There is also talk of expanding the list of consumer products and services, the prices of which are regulated. This was one of the demands of consumer associations when the list of goods whose prices are controlled had remained unchanged since 1997. How does the government intend to do this? The Minister placed great emphasis on the notion of consultation with all the players concerned, in order to give greater importance to information surrounding the increase in the prices of consumer goods during this period.
Another flagship measure: Abidjan also wants to subject exports of food products for mass consumption, such as plantain, cassava and its derivatives (attiéké, placali, etc.), yams and local rice, to authorization. Objective: promote the internal market. The actors of this sector essential to the Ivorian economy will receive financial support, promised the State. Coming back to the rise in the prices of basic necessities, Souleymane Diarrassouba explained that the analysis of the factors explaining the rise observed on these foodstuffs, variable in amplitude from one product to another and between Abidjan and the interior of the country , has shown that it results from a combination of exogenous and endogenous factors. With regard to external factors, maritime transport costs have risen sharply, in particular due to containers (cost multiplied by 3 to 7 in some cases) and insurance. In addition, crude oil prices have doubled in six months, to cross the one hundred dollar mark at the end of February, beginning of March 2022.
Internally, the Minister of Commerce and Industry noted that the low rainfall as well as the delay in the rains have led to a disruption of the agricultural calendar, implying an insufficient supply of local food products. Finally, revealed Souleymane Diarrassouba, the challenges related to security in the Sahel have led to distortions in the supply of animal protein and certain vegetables. In fact, the minister is referring to the sanctions imposed at the beginning of January by ECOWAS in Mali, an important link in the livestock-meat market.
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IMF ready to provide new aid
“A recalibration of policies seems inevitable in many countries,” commented Crystal Georgieva, the head of the IMF. “At this difficult time, the fund stands ready to help African countries reduce the cost of any necessary policy adjustment through policy advice, capacity development and loans. Recent reforms to the Fund’s lending toolkit provide greater flexibility to help meet financing needs she pointed out.
The coronavirus pandemic has already caused prices to rise sharply in Côte d’Ivoire in 2021, and the state had intervened. Today, according to the Central Bank of West African States (BCEAO), the speed of the rise in prices in the zone of the West African Economic and Monetary Union (UEMOA) which includes the eight countries sharing the CFA franc is mainly linked to food products. In this area, inflation rose from 6% in December 2021 to 6.5% in January 2022. And Côte d’Ivoire seems rather spared with an estimated rate of 5.6% compared to its neighbors Mali (8 .7%), Benin (7.9%) or Togo (7.5%).
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