Countries on the African continent, particularly Morocco, will be more affected by food price inflation, said the Oxford Economics Group, one of the world’s largest consultancies.
Rising food prices on the international market will have a more severe impact on consumer price indicators (CPIs) in Africa compared to advanced economies, Oxford Economics said in a recent report.
The data put forward by the group argues that food prices have followed an upward trend over the past two years, in addition to the war in Ukraine which has exacerbated this trend, which is driving up the cost of raw materials by by the world.
On the employment side, many African countries, including Morocco, South Africa, Nigeria and Kenya, are facing much higher unemployment rates than before the health crisis linked to Covid-19, it is underlined. .
These high rates of unemployment observed on the African continent thus lead to the emergence of an environment prone to turbulence, explains the group, since disposable incomes are reduced and do not allow to pay for the most expensive necessities, which forces governments to take exceptional measures to mitigate the impact on citizens.
Following successive crises, several countries have indeed taken unusual measures to limit the repercussions of the health and economic crisis. The report cites Egypt and Nigeria which postponed plans to cancel food and fuel subsidies, Kenya which extended fuel subsidies, South Africa which temporarily reduced fuel charges and extended subsidies approved during the Covid period, while Morocco approved financial transfers for the benefit of citizens in need.
Still on the side of Morocco, the country has decided to increase the minimum wage currently set at 2,638 dh excluding the agricultural sector. Indeed, faced with the rise in food and fuel prices accentuated by the war in Ukraine, the government, the main trade union organizations as well as the employers have sealed an agreement which provides in particular for the revaluation of the minimum wage by 10% over two years, in the sectors of industry, commerce and services. A move also endorsed by Kenya, while other African countries are expected to follow suit, according to the Oxford Economics Group report.
The group pointed out that the inflation index which was recorded in Morocco during the month of March and which amounts to 5.2%, although it remains lower compared to other countries such as Egypt (10.5%), remains the highest ever recorded in the Kingdom.
Thus, the group’s experts expect Egypt, Morocco and Nigeria to import more wheat for the 2022-2023 agricultural season. According to the report, Morocco still remains one of the most stable countries on the continent. That said, Moroccan families are exposed to financial pressures that could lead to protests against the high cost of living, the report warned.