With the events shaking Ukraine, several African countries will be deprived of their trade with Kiev. Some of them are in the process or about to repatriate their students undergoing training in Ukraine. Morocco, Nigeria, Guinea, Mali, Angola, Uganda… many African countries have had strong trade relations with Ukraine, sometimes even since the 1960s when Ukraine was still part of the Union of Republics Soviet socialists (USSR).
In a recent analysis published by the “Policy Center for the New South”, titled “The economic repercussions of the war in Ukraine for Africa and Morocco“, co-written by Abdelaaziz Ait Ali, Fahd Azaroual, Oumayma Bourhriba and Uri Dadush, it highlights the short and long-term economic repercussions of the war on the Moroccan and African economy. Focusing on the economic consequences of the war for the 54 African countries and their population of one billion inhabitants, particular attention is paid to Morocco.
The note aptly points out that the conflict comes as Africa struggles to put its economy on the path to recovery, amid global inflationary pressures and volatile financial and commodity markets. While energy exporters stand to benefit from the crisis, others, such as Morocco, will be hit hard by soaring energy and food prices, leading to external imbalances strong concerns about rising prices and the evolution of the public debt.
Morocco continues the think tank, which is among the African countries most exposed to the current crisis is a lower middle-income country. Morocco, for its part, is highly dependent on energy imports (90%) and half of its grain needs. The note states that “high oil and food prices will exacerbate Morocco’s high budget deficit, estimated at 6.5% of GDP this year, as butane gas is subsidized. Higher prices will also intensify inflationary pressures, as in the case of gasoline and other fuels whose prices are liberalized“. The report further states that “one of the sectors that may be affected by the Ukrainian crisis is the vegetable, fruit and fish sector, in addition to fertilizer exports (OCP), which accounted for 4.5% of GDP in 2019.
The Policies Center for the New South pointed out that Morocco is the African economy that is likely to suffer the most significant negative shock from this crisis. Its oil, gas and coal imports accounted for 6.4% of GDP in 2019, double that of the previous year. The research also indicated that “Morocco is a major importer of cereals. The cost of cereal imports as a percentage of GDP was 1.4% in 2019. But, given the poor harvest expected in 2022, imports could be two or three times higher than they were in 2021 This means the impact could cost Morocco between 1-2% of national income this year.
In addition, it is said, the longer the crisis persists, the more it will have major political and economic repercussions for the African continent in the months and years to come. This is a major event perhaps the most dangerous international incident since the Cuban Missile Crisis (Bay of Pigs). Its impact is difficult to predict, especially as the event comes at a time when the global economy is still grappling with Dame Covid and plagued by inflationary pressures, which are likely to intensify, especially if the conflict extends.