Still recovering from the effects of COVID, many Africans also have to deal with the effects of an ongoing war between Russia and Ukraine
Focusing on the effects of the Russia and Ukraine 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.
The consumer insights gathered is focused on Nigeria where we have collected 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 opportunities and areas to leverage on.
Africa is heavily reliant on both countries for imports, and this has led to inflation, depreciation in the value of African local currencies, and a spike in prices of food and fuels. Using our proprietary tools, Versus AskTM and Versus ListenTM, we created this report in our series to shed light on the effects of the war.
This report covers the effect of the war on these areas and what the future holds for them. The consumer insights gathered is Nigeria-focused, showcasing collated consumer data around the effects of the war in Africa’s most populous country.
Let’s take a look at the effects of the war.
1. Livelihood (Well-being)
2. Lifestyle (Welfare)
3. Leadership (Governance)
The key impacts include:
Various online sources via Versus Listen™, Versus Interact™ & Versus Ask™ Surveys
Snapshot Overview
Global Impact
Both 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, is nearly all the size of wheat the European Union produces.
Africa Impact:
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.
Nigeria was reported to have imported $971,747,221 worth of Durum wheat in 9 months as against $1,158,207,562 between January to September of 2021. Durum wheat is a very important material for making Pasta and Semolina. Due to the invasion, the importation of Durum wheat declined by 16 percent while the price rose by 50 percent.
The key impact on economies and livelihoods include:
1. Unavailability of chemicals: Africa is dependent on Russia for materials like Urea, Nitrogen, Phosphorus and potassium for the production of fertilizers.
2. No Ukraine and Russia grains and cooking oil: The prices of wheat and sunflower oil have increased over the years. The UN states that Africa’s wheat imports increased by 68% from 2007 to 2019, surging to 47 million tonnes. Rising commodity prices are bad news for consumers who have already experienced food price rises over the past two years. The Russia-Ukraine conflict means that pressure on prices will persist. The two countries are major contributors to global grain supplies.
There are clear spikes in prices of petrol, diesel and cooking gas between last year and this year.
Prices of Premium Motor Spirit (Petrol) in Nigeria (2021 - 2023): Average retail price paid by consumers
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Prices of Automotive Gas oil (Diesel) in Nigeria (2021 - 2023)
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Prices of Liquified Petroleum Gas (Cooking gas) in Nigeria ( 2021 - 2023) 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 which are now unavailable, are affecting the price of wheat, flour, bread, noodles, spaghetti and vegetable oil. Food shortages are on an unprecedented rise.
It is having an outsized impact on the global supply chain impeding the flow of goods and products.
The Ukraine-Russia war is affecting Nigeria badly because the price of bread is going up because Ukraine is the biggest exporter of wheat.
It is affecting us because Nigeria depends on other countries for products (especially Russia) because we don’t have manufacturing companies here.
The conflict affects a lot of Nigerians that were in Russia and Ukraine studying there. Some had businesses, life and families - especially those in Ukraine. Now they're either back home or in other countries starting afresh.
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.
Consumer Price Index (CPI) and Inflation in Nigeria (2021 - 2023)
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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.
Over 25,500 African students were left stranded due to the war in Ukraine some of which are Nigeria. More than 4,000 Nigerian students were impacted by the Russian invasion of Ukraine. Unfortunately, some Nigerian universities do not recognize the academic years spent in Ukraine to facilitate continuing education for the affected students. Igbinedion University was able to absorb some of the medical students into their program.
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:
The war derailed 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.
As of March 2022, about 45 different tours and travel companies had restricted, suspended or entirely closed operations with Russia. This especially affected Russia and Ukraine outbound international travel which accounts for about 3% of global spending which was worth 14 billion USD as of 2020.
At the same time, traditionally popular Russian destinations such as Estonia, Latvia, Finland and Cyprus were forced to restrict Russian tourists to their countries. Countries such as Mali and Seychelles which had the highest share of Russian tourists on the African continent would have also been impacted by the conflict.
However countries like Thailand, Maldives and Dubai welcomed Russian visitors and Thailand in particular saw a seven-fold increase in Russian visitors.
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.
Political Landscape and UN Resolution:
Throughout Africa, diverse positions emerged regarding the Russian-Ukrainian conflict.
A number of African nations, including Nigeria, Ghana, Egypt, Tunisia, Sierra Leone, and Kenya, demonstrated their support for a UN resolution that denounced Russia's invasion of Ukraine. However, other nations either abstained from voting or refrained from openly condemning the invasion.
In response, Nigeria opted not to condemn the invasion outright but engaged with G7 envoys and urged Russia to withdraw. Nigeria acknowledged the limitations posed by Russia's veto power within the UN Security Council, which makes imposing sanctions unlikely.
Role of BRICS:
The forthcoming Russia-Africa Bilateral Summit in July 2023 underscores Russia's commitment to strengthening partnerships and cooperation with African nations.
South Africa, a member of the BRICS group (Brazil, Russia, India, China, South Africa), occupies a special position in its relationship with Russia, fostering collaboration and mutual understanding.
Trade and Economic Relations:
Russia's economic influence in Africa is palpable, primarily through trade and investment ties.
Various African nations import goods from Russia and Ukraine, with Egypt, Ethiopia, Kenya, Libya, Morocco, Nigeria, Senegal, South Africa, Sudan, and Tunisia emerging as key importers. These imports includes commodities such as oil, gas, agricultural products, and essential plant nutrients like potash.
Notably, Russia stands as Nigeria's sixth-largest trading partner, with imports valued at N339 billion. Trade between the two countries encompasses diverse sectors, including oil, gas, agricultural products, and potash.
Military Cooperation and Influence:
Russia has fostered military cooperation agreements with several African nations, expanding its influence across the continent.
Key military partners for Russia in Africa include Libya, Mali, Sudan, the Central African Republic (CAR), Mozambique, Ethiopia, and Nigeria.
Beyond conventional military cooperation, Russia engages in paramilitary activities and provides military training to various African countries, further solidifying its influence.
The conflict between Russia and Ukraine has significant implications for security, extending well beyond Eastern Europe. One notable effect is the potential support garnered by breakaway movements like Biafra in Nigeria, as the recognition of breakaway parts in Ukraine sheds light on their agitation. In addition, there is a growing concern about rising coups in the Sahel region and insurgencies in Africa, with reports suggesting that Russian military forces are assisting certain African governments in managing these challenges.
A consequence of African leaders' neutrality in the Russian-Ukraine conflict is the diversion of global political attention away from Africa's own issues. Consequently, it has become more challenging for the United Nations to lead international peace-making efforts on the continent. This diversion of attention poses particular risks for countries such as Nigeria, Mozambique, and those in the Horn of Africa and Sahel, where existing conflicts may be further exacerbated by the ongoing conflict in Ukraine.
The strain caused by these security challenges has prompted African governments to appeal for increased economic support. However, many donor countries are allocating more funds to defense, creating additional hurdles in mitigating the stresses faced by African nations.
Furthermore, the Russian-Ukraine conflict has also resulted to a surge of cyberattacks, posing a significant security threat to Africa. Additionally, concerns are being raised regarding the potential implications for nuclear nonproliferation, as the conflict may contribute to an increase in the number of nuclear weapons.
Africa's dependence to Ukraine and Russia have the potential to intensify hunger and poverty across the continent. In response, the United Nations emphasizes the urgent need to build resilient and inclusive food systems in Africa. Human Rights Watch advocates for aid provision and the expansion of social protection measures to prevent hunger from exacerbating the existing challenges.
The African Development Bank (AfDB) assumes a crucial role in supporting African nations to address food crises. Through a significant investment of $1.5 billion, the AfDB initiative aims to tackle the food crisis in Nigeria and other African countries. By providing certified seeds and advanced technology, this initiative is expected to benefit 20 million African farmers, fostering increased food production and resilience.
The AfDB's Technologies for African Agricultural Transformation initiative has had a transformative impact on Ethiopia's wheat production. By providing climate-resilient technology through the TAAT program, the AfDB enabled Ethiopia to significantly expand its cultivated areas for wheat production. The country now boasts an impressive 650,000 hectares and aims to reach 2 million hectares in the coming years. This surge in production, coupled with plans to export to neighboring countries like Kenya and Djibouti, highlights Ethiopia's determination and readiness to harness agricultural opportunities.
Senegal recognizes the urgency of addressing the food crisis and has responded by allocating 11% of its budget to the agriculture sector. With an overall increase of 17% in the agriculture budget, the Senegalese government demonstrates its commitment to support the sector and ensure the welfare of its people.
Rwanda's post-COVID economic recovery efforts have yielded positive results in the agricultural sector. In 2021, the country witnessed a notable 39% increase in agricultural exports, particularly in products such as tea, coffee, dairy, and roses. This diversification of exports contributes to Rwanda's aspirations for economic growth and resilience.
We asked our scouts in Nigeria some questions about the impact of the war and below are some of the sample responses (note: all scouts gave consent to share their responses for this research report):
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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 threat to food and security in countries in Africa.
The Russia-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 Russia-Ukraine war and that's a challenge currently the effect of Russia-Ukraine 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.
It is affecting the country 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.
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.
We accepted 130 respondents for the interact question.
By age:
16-25 years - 44 respondents
26-35 years - 71 respondents
36-45 years - 15 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 has also launched the 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.
The recent launch of the Dangote Refinery in Lagos is believed to help cushion the impact of oil availability within and outside Nigeria. It will also position the country as a major player in oil exportation to other countries.
Operators and businesses in the global trade ecosystem should continue to enhance the ease of trade with countries like the US, which is now the go-to destination for Nigerians to import Durum wheat.
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.
Private Universities in Africa and Edtech disruptors should look into absolving students who are yet to gain admission into other schools to continue their education. Industry players should consider establishing a relationship to help the students get into the system.
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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