Category: Business

FOOD SECURITY SNAPSHOT

• Above-average rainfall forecast for remainder of 2022/23 cropping season

• Large import requirements resulting from reduced 2022 cereal production

• Elevated inflation rates reflect high international prices

• Food insecurity increases due to high prices and low cereal production

Above-average rainfall forecast for remainder of 2022/23 cropping season

The bulk of the 2023 cereal crop was planted by December 2022 and the harvest is expected to begin in May 2023. Seasonal rainfall had a timely start in October 2022 and by the end of December cumulative rainfall amounts were above average in all districts, supporting crop emergence. According to weather forecasts, average to above-average rainfall amounts are expected to continue between January and March 2023. Although these weather conditions are likely to benefit crop development, the current high prices of inputs may lead to a reduction in fertilizer application, with potentially negative effects on yields.

Harvesting of the 2022 winter wheat crop concluded last November and the total 2022 cereal outturn, including the production of the main summer season coarse grains, is estimated at 35 000 tonnes, about 30 percent of the previous five-year average. The low output reflects the impact of torrential rainfalls in December 2021 and January 2022 that caused crop losses and low rainfall amounts at the end of the cropping season that curbed yields.

Large import requirements resulting from reduced 2022 cereal production

Reflecting the low cereal crop harvested in 2022, the total import requirement in the 2022/23 marketing year (April/March) is forecast at a high level of 252 000 tonnes. It includes 146 000 tonnes of maize and 86 000 tonnes of wheat, mainly sourced from South Africa, plus minor quantities of rice.

Elevated inflation rates reflect high international prices

According to the National Bureau of Statistic, the annual inflation rate was estimated at 8.5 percent in October 2022, slightly down from a high of 9.2 percent in September, but still well above the 2021 levels. As the country is a net importer of key staple food commodities and energy, domestic prices have been largely influenced by the high level of international prices.

Food insecurity increases due to high food prices and low cereal production

According to the latest Integrated Food Security Phase Classification (IPC) analysis conducted in August 2022, about 520 000 people, 22 percent of country’s population, are currently facing IPC Phase 3 (Crisis) levels of acute food insecurity and the situation is expected to persist until March 2023, just prior to the main harvest period for the 2023 crops. Over 60 percent of the acutely food insecure people are located in rural areas. The overall level of food insecurity is above the five-year average, mainly driven by the exceptionally low crop production obtained in 2022 and high prices of food.

Source: Food and Agriculture Organization of the United Nations

Over 6 million inhabitants in Somalia are facing the worst drought in the Horn of Africa, which constitutes ‘half’ of the population! The cumulative effects of 3 consecutive and extremely low rain seasons, as well as severe water shortages have resulted in dire circumstances for people and major displacement from many towns.

“Faduma Hassan Mohamed has never witnessed a time like this… First, the skies above became cloudless, then the air got hot and dry. Then the fertile soil below her feet that used to provide for her family turned into dark brown dust. We were farmers, had a river and we used to water our crops with its water. Now, we have lost all of that,” the mother-of-six told Al Jazeera Network.

Moreover, the country is facing a risk of famine, as there are acute shortages of water and pasture for animal grazing, while deteriorating health conditions of livestock has reduced production and increased their mortality rates.

To address this emergency, DirectAid (DA) has continued its humanitarian response activities in July 2022, running a humanitarian air bridge. The aid operations for Somalia had begun in February of this year. The recent aid activity provided basic food baskets in addition to drinking water to 200,000 IDPs in 32 areas and districts. More than 11,200 food packages containing rice, flour, sugar, oil, and dates were distributed, in addition to 212 drinking water trucks.

DA also provided water for the ailing livestock, thereby attempting to safeguard the agricultural sector on which most Somalis depend for living. Other water aid projects for Somalia are being prepared by DA and will enhance the initial efforts.

Direct Aid Society is a non-governmental organization that delivers relief and development assistance across 30 African countries and Yemen with the aim of eradicating hunger, disease, and poverty through fostering self-reliance, the organization has held a special consultative status in the U.N. Economic and Social Council (ECOSOC).

Direct Aid (DA) has been present in Somalia since 1986. It has so far sponsoring 3429 orphan, education (14,694 student) in 12 schools and a university called SIMAD, construction (840 facility) community development (189 projects), health care (112,289 patients admitted ), in addition to diverse economic assistance for the most vulnerable, giving priority for children and mothers, seniors and widows.

The amount of funds (DA) has spent on its current aid operations to date amounts to 1.6 million $, while another 3 million $ is allocated until the end of the current year.

Source: Direct Aid

Luanda – The Southern Africa Development Community (SADC) will analyse the security and economic integration of the sub-region in its meeting set for 17-18 August.

The 42nd Summit of the Heads of State of SADC, that will take place in Kinshasa, Democratic Republic of Congo (DRC), will focus on the security, the implementation of 20/63 agenda, economic integration and the financial life of the SADC region.

The event will take place under the motto “Promotion of Industrialisation, through Agro-Processing, Transformation of Mineral Resources and Development of Regional Value Chains, for Economic, Inclusive and Resilient Growth”.

The Angolan minister of Foreign Affairs, Teté António, who will represent the Head of State at the event, said the partipants will also discuss the issue related to the promotion of industrialisation, a commitment of the Angolan government aimed at sustainable development.

According to him, during the event, Angolan leaders who contributed to the development of Southern Africa will be honoured, including the first President, Agostinho Neto.

As for the talk with US Secretary of State, Teté António explained that the contact was positive because it addressed issues related to some African countries.

SADC comprises South Africa, Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, Zambia, Zimbabwe and Seychelles.

Source: Angola Press News Agency

Crisis (IPC Phase 3) outcomes likely to emerge in late 2022 due to low household purchasing power

KEY MESSAGES

Despite expected below-average production for the current harvest that began in May, rural households are expected to continue consuming own produced food through August. Overall income is lower than normal due to below average crop sales and reduced remittances from South Africa; at least 60 percent of households receive monthly remittances. As a result,

Stressed (IPC Phase 2) outcomes are most likely through September. Crisis (IPC phase 3) outcomes are likely to emerge in late 2022 as households will be market reliant, yet with reduced household purchasing power because of above average food price increases and below average income.

Following flooding in January and February, some households, especially in the lowlands and Senqu River Valley, were not able to plant due to heavy rainfall. The fields lying along the rivers had been washed away by the overflowing rivers, damaging the crops according to the 2022 National Emergency Flood Rapid Assessment Report. The government is to provide subsidies on agricultural inputs for winter production. While official production estimates are currently not available, 2022 crop production is expected to be below average and similar to 2021.

Most grain prices remained generally stable owing to decreased demand as most households are consuming ownproduced foods. However, the price of wheat in April increased sharply mostly due to high and increasing global food prices. Similarly, prices of non-staple grains including cooking oil, have also increased in recent months, adding to inflationary pressures. Maize meal prices in April were 14.5 percent above the five-year average, while bread prices were 17.4 percent above average.

Source: Famine Early Warning System Network

TAIPEI — Chinese President Xi Jinping pledged this week to help advance four economic powers, despite pandemic problems at home and knock-on effects from Russia’s war in Ukraine. Analysts expect the pledges to take time, with no immediate results.

Xi made his remarks Thursday at the virtual BRICS Summit hosted by Beijing.

The other countries are Brazil, Russia, India and South Africa, which together with China make up the grouping known as BRICS. These large emerging economies see themselves as an alternative to the U.S.-led world order.

The leader of China advocated BRICS cooperation in cross-border payments and credit ratings, the official Xinhua News Agency in Beijing reported Thursday. The report says he further recommended “facilitation” of trade, investment and financing.

Xi as host of the group’s 14th summit said he would work with the BRICS countries to support global development that is “stronger, greener and healthier,” Xinhua added.

The leader urged more countries to join the New Development Bank, a concessional lender founded by BRICS countries in 2015. He called, too, for improving the group’s emergency balance-of-payments relief mechanism, the Contingent Reserve Arrangement, Xinhua added.

View toward future deals

Substantive progress on these goals will likely take time, analysts say, as the member countries do not always get along with one another and China’s ambitions may take time to evolve given issues at home and abroad.

“At the highest level, there’s a little bit of a discussion, then that may lead to further opportunities to be further engaged down the road,” said Song Seng Wun, a Singapore-based economist in the private banking unit of Malaysian bank CIMB.

China’s economy has outgrown the others after decades of export manufacturing for much of the world. But the keeper of a $17.5 trillion GDP has teetered this year amid lockdowns to contain a COVID-19 surge — which snarled world supply chains originating in China.

BRICS member Russia faces economic sanctions from the West over its war in Ukraine, which has sparked food shortages and inflation. China still faces tariffs on goods shipped to the United States, fallout from a bilateral trade dispute.

India and China have their own differences. The world’s two most populous countries contest sovereignty over mountain territories between them, and China bristles at India’s geopolitical cooperation with the West.

Developing countries, including those among the BRICS, can easily turn to Japan, the European Union and other alternatives to China for economic support, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. Those choices will slow China’s ambitions to sow BRICS cooperation as developing states prefer not to over-rely on Beijing, he said.

“There’s a lot of talk but probably not so much real progress in that regard and I suspect things will probably end up sort of getting pushed back to the next BRICS meeting for further progress once the dust has settled,” Orr said.

China still “struggles with health issues” while its historic political rival the United States is finding new suppliers and customers for soy exports, Orr said.

Officials in Beijing want to expand cooperation with other countries as the United States sanctions Russia over the war and China over trade, said Huang Kwei-bo, associate professor of diplomacy at National Chengchi University in Taipei.

The BRICS countries might reassure one another over energy and food shortages linked to the war, Song said. Later, he said, they could “flesh out” substantive agreements.

Anti-West position

China regularly offers economic aid, investments and COVID-19 vaccines to friendly developing countries from Africa into Central Asia. Its flagship is the Belt and Road Initiative, a 9-year-old, $1.2 trillion list of foreign infrastructure projects aimed at opening China-linked trade routes.

Chinese officials feel the BRICS nations will welcome their support, and in turn, accept some of their political views, analysts say. Of the BRICS states, only Brazil voted against Russia’s invasion of Ukraine at the United Nations earlier this year. China, India and South Africa abstained.

India, despite its West-leaning political activity and reservations about China’s Belt-and-Road, still takes Russian oil.

“India-China relations are very sensitive, but outside these existing relations, like in the Caribbean and Latin America, those spots are where India and China wouldn’t have clashes of interest,” Huang said.

Brazil in particular is looking for more international support to overcome the “devastating impacts” of COVID-19 in the country, Orr said.

“There should be some other countries that would think about joining this kind of regime,” Huang said. “Then, if a lot of those countries don’t have such good relations with the U.S. side, doesn’t that mean it’s one more thing causing a headache for the United States in terms of geopolitics?”

A declaration issued at the summit Thursday says the five countries support talking further about expanding their group.

Source: Voice of America

TUNIS, June 23 (NNN-AGENCIES) — The International Monetary Fund is set to begin formal talks on a new financial aid package for Tunisia, to help the North African nation deal with the dire economic situation, an IMF official

said.

The country has been in preliminary discussions with the global lender for a new loan to save an economy ravaged by years of high unemployment, inflation and public debt even pre-dating its 2011 revolution.

“After several months of technical discussions we are ready to start program negotiations in the coming weeks,” said Jihad Azour, the IMF Middle East and Central Asia chief.

Azour visited Tunisia this week, meeting with President Kais Saied and other officials, and welcomed a recent government reform program to deal with the situation that has been exacerbated by the spillovers from the war in

Ukraine.

“The severity of the economic situation makes the need for swift implementation of ambitious reforms evermore pressing,” Azour said in a statement.

But he said those reforms must benefit the people.

“Tunisia needs to urgently tackle its fiscal imbalances” including “replacing generalized subsidies with transfers targeting the poor, strengthening its social safety net,” he said.

The government reform plan includes a freeze on the public sector wage bill, some subsidy cuts and a restructuring of state firms.

Source: NAM NEWS NETWORK