* Hunger, inflation and loss of labor loom in Africa, warns ex-envoy
Onwuamaeze Dike in Lagos and Victor Ogunje
The Nigerian Economic Summit Group (NESG) has called on the Federal Government to take urgent action to improve food security in Nigeria and remove constraints on the production and supply of agricultural produce to the market.
The NESG said this would allow the country to mitigate the negative impact of the Russian war against Ukraine on the food supply in the country.
The NESG made the call in a report entitled “Implications of Russia-Ukraine War: Risks and Opportunities for Nigeria”, obtained yesterday, in which it states that “tensions have triggered global supply chain disruptions, widely affecting countries exposed to trade with belligerent nations.
The report further stated that the war in Eastern Europe would affect Nigeria through financial channels, commodity prices, technology transfer, foreign policy and migration.
He said: “Uncertainties will cause investors to seek safe havens, which could lead to capital outflows from emerging markets, including Nigeria, while supply constraints due to geopolitical tension have pushed global prices higher. raw material. This will generally fuel global inflation. In addition, Nigeria maintains close economic ties with Russia. The crisis will hamper the acquisition of expertise and equipment from Russia.
The NESG recommended specific action points that would help Nigeria mitigate the impact of the crisis on its economy, including removing constraints to agricultural productivity to improve food security, supporting value chain development to ensure that primary products are processed locally rather than exported. in their raw state and implementing the Petroleum Industry Act (PIA) in a holistic manner to attract huge investments in Nigeria’s oil and gas sector.
He also recommended that Nigeria leverage the benefits of the African Continental Free Trade Area (AfCFTA) agreement, ensure effective border control and remove capital controls to encourage the influx of stable investments, such as foreign direct investment (FDI).
The report refers to the National Bureau of Statistics (NBS), which said that Russia was among Nigeria’s top 10 import trading partners in the third quarter of 2021, accounting for around 4.0% of Nigeria’s total merchandise imports. during the quarter.
“This suggests that the persistence of the crisis would reduce the volume of trade between the two countries. Likewise, the fact that Ukraine is among Nigeria’s top 10 import locations in the fourth quarter of 2021 suggests that the war between Russia and Ukraine could cause supply chain disruptions and negatively affect exports. import supplies, such as wheat, to Nigeria until the two countries reach a truce.
“While Nigeria may explore other sources of wheat procurement, the crisis will have a short-term negative impact on Nigeria through the trade channel.
“In addition, Nigeria is a major importer of wheat from Russia, and the product is the third most consumed cereal in the country. Higher wheat prices will be accompanied by higher input costs for feed mills and producers of value-added products, such as bread.
“Coupled with growing insecurity, rising food import inflation will keep headline food inflation and headline inflation high,” the NESG said.
He further stated that “on the demand side, countries dependent on the import of refined petroleum products, such as Nigeria, will experience rising import bills as rising crude oil prices persist.
“This will deteriorate Nigeria’s trade balance, which had a deficit of N1.9 trillion naira in 2021. Considering that the Nigerian government maintains the existing fuel subsidy scheme, rising crude oil prices will mean a huge tax burden imposed on the national treasury by rising subsidy costs. The World Bank has projected that grant payments to Nigeria will reach 4 trillion naira in 2022.”
On the technology transfer channel, the NESG noted that over the years Russia has been a major location for technology transfers to Nigeria: notably, the Ajaokuta Steel Rolling Mill.
He added that while the Nigerian government worked hard to leverage technology transfer from Russia to rehabilitate the Ajaokuta complex alongside other similar industrial facilities, the Russia-Ukraine crisis would be a setback for Russia’s reintegration. in the way of the industrial development of Nigeria.
“Nigeria’s close ally with Russia will also be challenged lest it be sanctioned at a time when the latter faces multiple sanctions from the West,” the NESG said.
Meanwhile, Nigeria’s former ambassador to Ukraine, Mr. Frank Isoh, advised the United Nations and world superpowers to prevent the Russian-Ukrainian war from dragging on, saying it would lead to hunger, inflation and the loss of manpower on the African continent.
The ex-envoy said fear of terrible backlash has started to manifest in Africa with how many students seeking medical training in Ukraine have had their dreams truncated by the war.
The ex-ambassador postulated that the continent largely dependent on Ukrainian wheat would soon begin to experience a spike in the price of bread, with oil prices already booming, thus increasing government spending on subsidies.
Isoh spoke at Afe Babalola University, Ado Ekiti (ABUAD) yesterday during a biannual diplomatic dialogue titled: “The Russian Invasion of Ukraine and Emerging Global Dynamics: Implementations for the Africa and the World”, organized by the Department of International Relations and Diplomacy.
Isoh said he was expressing concern over emerging indications that there are no countries and organizations to arbitrate in the crisis due to Russia’s distrust of the United States of America, the United Nations and the Vatican, which could have propelled recovery measures.
The diplomatic expert, however, said the only way to rein in Putin was to impose heavy sanctions on Russia to incite the people against his government when the economy gets tougher and unbearable.
Alternatively, Isoh considered an outright reorganization of Ukraine into a unifying state from the current unitary structure, as a way to fortify the country and make it more cohesive in decision-making.
Sharing his views on the implications of the war, Isoh said:
“There will be hunger in Africa if the war continues, and the budget deficit will increase because the price of oil will rise and the country will borrow money to pay subsidies, which will give unscrupulous people the opportunity to circumvent the system.
“It will certainly have ripple effects on property prices. Food prices, particularly wheat, of which Russia and Ukraine are major exporters, will rise. Nigeria imports much of its wheat from Russia. The war will have an effect on the prices of wheat products in the long term.
“For Nigeria, it is likely that there will be an increase in the budget deficit due to the increase in gasoline subsidies. To meet these increasing gasoline subsidies. To meet these payments of rising subsidies, the country can have more loans and more debts.
“Another significant impact, particularly on Africa, is in the area of education. Ukraine is a magnet for African and Third World students seeking medical training. These students have already had their education interrupted for an indefinite period.
“Records showed that a total of 5,200 Nigerian students and approximately 3,000 citizens living in this country had their education and means of economic survival truncated.”