Persistent food price inflation in developing nations — A World Bank report and lessons for Ghana
The World Bank in its latest report on food security has underscored the need for greater coherence between humanitarian and development financing to address the root causes of acute food insecurity and reduce reliance on short-term aid measures.
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It said as the world grapples with evolving geopolitical dynamics and mounting food security challenges, policymakers face the imperative of fostering sustainable solutions to ensure global food stability amidst uncertainty.
Situation in Ghana
The call comes at a time when global warming and in particular, reckless misuse or destruction of water bodies through illegal mining activities is affecting not only the quality of water meant for farming but forcing many water bodies to either dry up or are on the verge of drying up.
In Ghana for instance, the heavy pollution of water bodies with dangerous chemicals such as cyanide and mercury for the washing of gold mined from water bodies, is making it very unsafe for farmers to use for crop production.
Already, the country imports large quantities of agricultural produce such as tomatoes, onions and other vegetables from neighbouring countries to supplement the few grown in the country.
According to the Ghana Statistical Service (GSS), food inflation dropped from 28.7 per cent in December 2023 to 27.1 per cent in January 2024.
Cocoa drinks recorded an inflation rate of 73.5 per cent, followed by tea and related products with an inflation rate of 71.2 per cent.
Vegetables, tubers, bananas, and plantains recorded a rate of 35.8 per cent, coffee (33.2 per cent), fish and other seafood (30.6 per cent), fruit and vegetable juices (29.8 per cent), live animals, meat (29 per cent), sugar, confectionery and desserts (27.4 per cent), ready-made food (26 per cent), and oils and fats (24.3 per cent).
It will be observed that much as the general food inflation rate has declined marginally, the major food items needed by the people on a daily basis are still very high, a phenomenon which is clearly a source for concern.
Experts hold the view that the trend in the country leaves much to be desired and have indicated that although the government’s flagship programme, Planting for Food and Jobs was yielding some positive results, a lot more needed to be done to protect the country’s water bodies and provide dams which farmers can easily access to cultivate their crops.
This is the surest way to ensure food security and avoid the global food shocks emanating from heightening geopolitical tensions.
Report details
According to the latest food security update from the World Bank, domestic food price inflation continues to pose a significant challenge in most impoverished nations, maintaining its stubborn grip on their economies.
The report reveals that over 57.9% of low-income countries still grapple with inflation rates higher than 5%, despite a slight decrease of 5.3 percentage points since the last update in February 2024. Similarly, lower-middle-income countries experience inflation in 71.7% of cases, albeit with a decrease of 2.2 percentage points.
Notably, the bank’s findings underscore a 10% increase in export price indices and a 3% rise in agriculture prices since the previous update. Cocoa and cotton have notably surged by 22% and 8%, respectively, contributing to the overall export price hike.
However, the report also notes a 2% decline in cereal prices, attributed to reductions in maize and wheat costs. On a year-on-year basis, maize and wheat prices have plummeted by 35% and 21%, respectively, while rice prices surged by 26%.
The Agricultural Market Information System (AMIS) Market Monitor for February 2024 emphasises relative stability in global commodity markets, despite concerns over El Niño-induced production shortfalls and trade disruptions.
Shipping delays, exacerbated by geopolitical tensions, have hampered global trade flows, increasing costs and disrupting supply chains.
The report highlights a concerning trend in food crises, despite substantial external financing received by affected regions. The Global Network Against Food Crises underscores that, despite significant investment, acute food insecurity levels reached an all-time high in 2022, with 258 million people facing crisis conditions in 58 countries.