Ethiopia + 11 more
Highlights
In summary, over the past 12 months, specifically across the Eastern Africa Region the price of a local food basket has increased by 53%. In addition, for the same period, the cost of fuel has increased by 42%. Both these factors have resulted in severely curtailed Food Access; increasing vulnerability. Food Availability has also been drastically reduced across this region due to climatic shocks; flooding in many parts of the region, notably South Sudan and Ethiopia; and an expected below average fifth consecutive season across the Horn of Africa making production prospects uncertain.
• Constantly rising annual inflation is affecting cost of living across the region as purchasing power of households is reduced. On average, in just one year, the inflation rate has increased by 31% (June 2022). Four out of nine countries in the region recorded double digit inflation, with Ethiopia recording the highest rate (34 percent), followed by Burundi (17.1 percent), Rwanda (16.1 percent – the highest rate since March 2009).
• With specific reference to Food Price Inflation, the average for the region stood at 32.6 percent, pushed up by Sudan (recording the highest food inflation rate of the region at 106.1 percent), Ethiopia (25.6 percent) and Rwanda (26.1 percent, the highest increase since February 2020).
• As of June 2022, the average monthly price of the local food basket has increased by 53% in just one year across the Eastern Africa region. Sudan, Ethiopia and Uganda recorded the highest increase between January and June 2022 (up 57.9, 33.2 and 31.2 percent, respectively).
• Cost of fuel is significantly higher compared to a year ago and pre-war levels (up 42.3 and up 28.6 percent, respectively). Exceptionally high fuel prices are pushing up annual inflation rates, leading to a significant increase in the overall cost of living. Considering higher transportation costs are transmitted to the final price of food commodities paid by consumers, soaring fuel prices are also accelerating food inflation rates, which accounts for a twofold impact on household purchasing power.
• Currencies across the region depreciated against the U.S. dollar between June 2021 and June 2022; with South Sudan and Ethiopia recording the highest y-o-y depreciation in the official market.
• Speculations around the Ukraine’s War are contributing to the depreciation of local currencies observed, making imported goods such as fertilizers, fuel, and wheat extremely expensive – and eventually pushing up food prices on local markets.
Short-Term Outlook (second half of 2022)
• In the Eastern Africa Region persisting rainfall deficits in the Horn of Africa are making production prospects uncertain. This combined with increasingly less affordable agricultural inputs and increased transport costs is pushing local food prices up across the entire region.
• Cereals, vegetable oil and fuel (all largely imported in the Eastern Africa region) are becoming more and more expensive, impacting costs of living and reducing the affordability of basic commodities. As markets remain the main source of food in many areas of the region, the erosion in purchasing power is seen to affect access to food, with severe implications on urban food insecurity.
Ethiopia + 11 more
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