Even while many Africans are still recovering from the effects of COVID, they now have to deal with the effects of an ongoing war between Russia and Ukraine
Focusing on the effects of the war in Africa, we look at the major areas that were impacted because of the war. From food to fuel to the economy to education, nearly everyone is feeling the impact of the war. Lower trade volume (no Russia-Ukraine trade), currency depreciation (falling/ weaker local currencies), inflation and shortages (price hikes and scarcities) and inequality and uncertainties (wide income/ rights gap) are on the top of the list for the impacts of the war.
For the consumer insights gathered, our focus will primarily be on Nigeria where we have gathered data around effects of the war on consumers in Africa’s most populous country.
In our tenth Versus report series, we delve into a targeted wrap-up of the impact of the war, and a peek at what could be the possibilities and areas to leverage on.
Africa is heavily reliant on both countries for imports, this has led to inflation, depreciation in the value of African local currencies, spike in prices of food and fuels. Using our proprietary tools, Versus AskTM and Versus Listen, we created this report in our series to shed light on the effects of the war.
From food, to fuel, to the economy and to education, this report covers the effect of the war on these areas and what the future holds for them. The consumer insights gathered focuses primarily on Nigeria where we have gathered consumer data around effects of the war in Africa’s most populous country.
Let’s take a look at the effects of the war.
1. Livelihood (Wellbeing)
2. Lifestyle (Welfare)
3. Leadership (Governance)
The key impacts include:
Various online sources via Versus Listen, Versus Interact & Versus Ask™ Surveys
Snapshot Overview
Russia and Ukraine play a major role in the global agricultural economy. Russia produces about 10% of global wheat and Ukraine produces about 4% and combined together, this is nearly all the size of wheat the European Union produces. Africa is heavily reliant on food from both countries, instead of local production. African countries in 2020, imported agricultural products worth US$4 billion from Russia and Ukraine exported $2.9 billion worth of agricultural products to African countries. About 90 percent of this was wheat and 6 percent was sunflower oil. Both countries are also notable for their export of Sunflower oil and major importing countries were Egypt (which accounted for nearly half of the imports), Sudan, Nigeria, Tanzania, Algeria, Kenya and South Africa.
The key impact on economies and livelihoods include:
We have seen spikes in prices of petrol, diesel and cooking gas between last year and this year.
Prices of Premium Motor Spirit (Petrol) in Nigeria (2021 & 2022): Average retail price paid by consumers
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Prices of Automotive Gas oil (Diesel) in Nigeria (2021 & 2022)
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Prices of Liquified Petroleum Gas (Cooking gas) in Nigeria ( 2021 & 2022) Using a 5kg Cylinder for study
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The prices of the majority of goods, services and commodities in African markets have skyrocketed. There is no circulation of the oil, gas, or chemicals that normally comes from Russia. Hence affecting the prices of petrol, diesel, jet fuels (causing flight tickets across Africa to increase). The prices of fertilizers also went up in turn making the cost of goods locally produced to skyrocket.
Grains or cooking oils usually sourced from Ukraine that are now unavailable, are affecting the price of wheat, flour, bread, noodles, spaghetti and vegetable oil. Food shortages are on an unprecedented rise.
‘It has affected our nation in all ramifications. Fuel price has risen, food stuff prices have skyrocketed. Our currency has devalued. People are finding it difficult to secure a job.
It has affected the global economy because of oil and gas prices. As a result, the global economy can no longer give much aid to Nigeria’s economy.’ a scout said.
Consumer Price Index (CPI) and Inflation in Nigeria (2021 - 2022)
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The implication of Russia's invasion of Ukraine is profound on the global economy. With both Russia and Ukraine being major commodities producers, the conflict between these two countries have brought about heightening fiscal deficit, growing debt levels, spike in debt service payments, money supply growth, exchange rate depreciation and more intense inflationary pressures. The impact can be seen in three major ways:
Thousands of foreigners love to visit and live in both Ukraine and Russia due to their rich cultural history and the lifestyle of its people characterized by good food, deep friendships and a love of nature. However, with the outbreak of war between these countries many were forcefully displaced across the world with priorities placed on white nationals than their other counterparts. Ukrainians and Polish nationals pass through quick vehicles’ lanes, while foreigners go through pedestrian lanes, a three-stage process that can last from 14 to 50 hours (Al Jazeera). These foreigners, many of whom are international students (20% of Foreign Students in Ukraine are from Africa; specifically Moroccans, Egyptians and Nigerians) are usually the last people to get through as Ukrainian authorities at the border put their people first.
Many students from third countries (especially in Africa) find themselves trapped in a dilemma. Tuition fees in the countries they fled to - such as in Ukraine - are too high and scholarships are intentionally only offered to Ukrainian students (Al Jazeera). Entangled in the complexity of European countries’ migration laws, these students are now spread across Europe facing obstacles as they seek to fulfill their educational aspirations and survive. Some have lost their lives, some have lost their work because they got job opportunities and stayed over following their University graduation, while some have been evacuated by their respective country's government to return to their homeland in Africa, having to start from scratch.
Russia’s invasion of Ukraine has resulted in the banning of the country’s athletes and teams from sports competitions globally. In England, the assets of Roman Abramovich; a Russian Oligarch and ally of Vladimir Putin, were frozen. Abramovich at the time happened to be the owner of Chelsea Football club. Due to these sanctions, the club was put up for sale and ownership of the club was transferred to new American owners. Chelsea Football Club is a popular club amongst Africans and the impact of the sudden change in ownership grossly affected the club’s stability and their performance on the football field.
The Russian men’s football team was banned from the FIFA world cup qualifiers while Russian football clubs were expelled from European cup competitions. In Tennis, Russian and Belarussian players were banned from competing at this year’s Wimbledon competition.This move resulted in the ATP and WTA stripping Wimbledon of its ranking points. Russian athletes were also banned from competing in the Olympics and IAAF competitions. They were only allowed to compete as neutral athletes not representing the Russian flag.
While being a major global humanitarian disaster, the conflict has majorly impacted the tourism industry. Russian and Ukrainian tourists contribute around $45 Billion to the European economy, most of it coming from travel (emerging-europe). The war is expected to affect tourism in four ways:
1. Travelers' overall confidence
2. Higher cost of travel (mainly due to increased cost of jet fuels)
3. Airline restrictions
4. A major loss of Ukrainian and Russian tourists (many of whom were African).
The war could potentially derail the post Covid-19 economic recovery of tourism dependent countries across the globe. Tourism professionals are projected to lose their jobs due to distinct reduction in global air travel at this time. The ban of Russian airlines from European airspaces and vice-versa has meant that airlines are struggling to find new routes to reach their destinations. This will inevitably result in an increase in flight durations, coupled with the rising cost of fuel which leads directly to a significant increase in airline ticket prices. This will continue to make it more difficult to travel in a period of uncertainty around the global economy and a sharp reduction in disposable income available to potential travelers.
African leaders are cautious with supporting Ukraine as seen in the UN resolution votes. This could be due to existing military and trade relations with Russia.
Continuation of the conflicts can weaken military strengths and hence force more instances of terrorism and cybercrime. It is imperative African leaders tighten security measures both physically and over the internet to protect its citizens.
People need knowledge, technology (or innovative advancements for scale) and financial support to develop and adopt solutions that will mitigate hunger and poverty. Supporting public or private enterprises addressing these areas should be prioritized by African governments.
We asked our scouts in Nigeria some questions about the impact of the war and below are some of their responses:
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It has affected the ability to import petroleum products back to Nigeria because most of Nigeria petroleum is refined overseas. As a result, the prices of petroleum have skyrocketed and it's affecting Nigeria.
The cost of living is very high now, making goods have high prices which the poor masses cannot afford - only the rich can afford such. I just wish and pray that this war will end so that things will go back to normal.
The Russia Ukraine crisis has disrupted Africa's promise to recovery from the covid-19 Pandemic by raising food and fuel prices.It also presents a threats to food and security in countries in Africa.
The Russian Ukraine war has had a great impact on Nigeria and African students taking away their dreams of education. By doing so, most of them have gone back to their countries for safety purposes.
The high cost of wheat has become a major factor in making bread production in Nigeria and in Africa very expensive. The price of bread currently is sold for as much as 500 - 1,000. It has become very expensive and that is because of wheat and that is a factor in the Ukraine/russian war and that's a challenge currently the effect of Ukraine Russian war.
It has affected African countries, especially Nigeria. It is so bad that the goods, and things that normally come from all the countries no longer come into the country. This has made the Nigerian economy drop down so low.
It is having an outsized impact on the global supply chain impeding the flow of goods and products.
Russia - Ukraine conflict has been felt mostly by farmers in Nigeria and Africa at large. Plants need nitrogen, phosphorus and potassium in their fertilizer. Russia is a top supplier of all three. The conflict is creating scarcity for farmers and fueling rising food costs.
The Russia - Ukraine conflict has affected Nigeria economically. People are losing their jobs. Personally, as I'm recording this video from the house. I've lost my job. You can't afford to pay for a flight. Fuel price has increased in Nigeria; naira is falling. So many things have happened and we don't know. Nigeria is producing oil, but because of the conflict happening in Russia, it's bad.
The Russia Ukraine conflict has affected Nigeria economically. People are losing their jobs. Personally, as I'm recording this video from the house. I've lost my job. You can't afford to pay for a flight. Fuel price has increased in Nigeria; naira is falling. So many things have happened and we don't know. Nigeria is producing oil, but because of the conflict happening in Russia, it's bad.
It is affecting NG negatively from production of noodles to buying of petroleum and diesel. Everything is costly and Nigeria is a country that consumes a lot.
The conflict between Russia and Ukraine affected a lot of Nigeria that were abroad. Some had to suspend their academics and come back to Nigeria or move to another country to start afresh. Some find it hard to leave their business and run at a loss.You know how difficult it is to start a business in someone else's country and now they have to start afresh in Nigeria.
So the Russian Ukraine conflicts affect the whole globe because Russia is a major producer of food products and oil. And it affects us in the aspect of oil and food, especially for farmers as they need potassium and urea for fertilizer. And this product normally comes from Russia. And now Russia has sanctions.
Ukraine - Russian crisis has affected our nation in all ramifications. Our fuel price has risen, our food stock prices have skyrocketed. Our currency has devalued and the people in our nation today are finding it difficult to secure a job. Things haven't been easy at all.
It affects Nigerians through the things we are buying from Ukraine and Russia. Since the conflict started, it is not all of them that we are able to access.
It is affecting us because Nigeria depends on other countries for products (especially Russia) because we don’t have manufacturing companies here.
We had 130 respondents for the interact question.
By age:
16-25 years - 44 respondents
26-35 years - 71 respondents
36-45 years - 15 respondents
46-65 years - 0 respondents.
The world is very connected. The impact of Russia and Ukraine at war has not only led to African economies taking a hit but an unprecedented global crisis, even worse than the financial crisis in 2008-2009.
The African continent boasts an estimated 65 percent of the world's arable land and is home to abundant water resources and a variety of soils and climates that support the growth of the world’s most important and desirable crops. African countries with arable land available to bolster agriculture need to capitalize on the global shortage and seek investments to increase both local consumption but more importantly enough to fill in the gap for export deficits in wheat and food oils.
Africa’s richest man, Aliko Dangote launched a $2.5B urea and ammonia fertilizer plant that is meant to help Nigeria generate over $5B in export revenue. This fills in a very major gap in the absence of Ukraine’s input in the global supply. The fertilizer plant is already exporting to India, North America and Latin America.
Aliko Dangote is also set to launch a 650,000 barrel per day oil refinery that is anticipated to export over 8 million tons of petroleum products annually. With Russia’s supply heavily disrupted due to the war, this again provides an opportunity to attract export revenue into the African region.
Improving our educational systems in Africa. The dependence on education overseas by Africans as seen by the impact of the war and the eventual deprioritization of non-citizens seeking refuge, clearly means it could happen anywhere that is not home. Investing in good quality education can help African countries keep up with more technologically advanced societies which will reduce the high number of brain drain. Quality Education is crucial as it is an investment in human capital. This yields tremendous benefits at many levels and spheres. It benefits the individual, family, community, and nations. Education is also a sustainable means to alleviate poverty and bring lasting change to Africa.
Businesses in food (any part of the value chain), education (especially financial literacy) are poised to benefit the most as the conflict continues.
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