This paper analyzes food inflation trends in Sub-Saharan Africa (SSA) from 2000 to 2016 using two novel datasets of disaggregated CPI baskets. Average food inflation is higher, more volatile, and similarly persistent as non-food non-fuel (NF/NF) inflation, especially in low-income countries (LICs) in SSA. We find evidence that food inflation became less persistent from 2009 onwards, related to recent improvements in monetary policy frameworks. We also find that high food prices are driven mainly by non-tradable food in SSA and there is incomplete pass-through from world food and fuel prices and exchange rates to domestic food prices. Taken together, these finding suggest that central banks in low-income countries with high and persistent food inflation should continue to pay attention to headline inflation to anchor inflation expectations. Other policy levers include reducing tariffs and improving storage and transport infrastructure to reduce food pressures.

This paper analyzes the domestic and external drivers of local staple food prices in Sub-Saharan Africa. Using data on domestic market prices of the five most consumed staple foods from 15 countries, this paper finds that external factors drive food price inflation, but domestic factors can mitigate these vulnerabilities. On the external side, our estimations show that Sub-Saharan African countries are highly vulnerable to global food prices, with the pass-through from global to local food prices estimated close to unity for highly imported staples. On the domestic side, staple food price inflation is lower in countries with greater local production and among products with lower consumption shares. Additionally, adverse shocks such as natural disasters and wars bring 1.8 and 4 percent staple food price surges respectively beyond generalized price increases. Economic policy can lower food price inflation, as the strength of monetary policy and fiscal frameworks, the overall economic environment, and transport constraints in geographically challenged areas account for substantial cross-country differences in staple food prices.

This paper analyzes food inflation trends in Sub-Saharan Africa (SSA) from 2000 to 2016 using two novel datasets of disaggregated CPI baskets. Average food inflation is higher, more volatile, and similarly persistent as non-food non-fuel (NF/NF) inflation, especially in low-income countries (LICs) in SSA. We find evidence that food inflation became less persistent from 2009 onwards, related to recent improvements in monetary policy frameworks. We also find that high food prices are driven mainly by non-tradable food in SSA and there is incomplete pass-through from world food and fuel prices and exchange rates to domestic food prices. Taken together, these finding suggest that central banks in low-income countries with high and persistent food inflation should continue to pay attention to headline inflation to anchor inflation expectations. Other policy levers include reducing tariffs and improving storage and transport infrastructure to reduce food pressures.

The world remains in the grip of the COVID-19 pandemic and a seemingly accelerating pace of climate change, both of which underscore the need for increased global cooperation and dialogue. Solutions to these global problems must involve all countries and all regions, especially sub-Saharan Africa, with the world’s least vaccinated population, most promising renewable energy potential, and critical ecosystems. Sub-Saharan Africa’s economy is set to expand by 3.7 percent in 2021 and 3.8 percent in 2022. This follows the sharp contraction in 2020 and is much welcome, but still represents the slowest recovery relative to other regions. In particular, the economic outlook points to divergences at three levels: between sub-Saharan Africa and other regions, within sub-Saharan Africa, and within countries. These divergences reflect the region’s slower vaccines rollout, more limited fiscal space, and regional disparities in resilience. The outlook remains extremely uncertain, and risks are tilted to the downside. In particular, the recovery depends on the path of the global pandemic and the regional vaccination effort, food price inflation, and is also vulnerable to disruptions in global activity and financial markets. Looking ahead, sub-Saharan Africa’s potential remains undiminished. The region is at a critical juncture to implement bold transformative reforms to capitalize on this potential.

Dramatic increases in food prices, as witnessed on a global scale in recent years, threaten the food security of hundreds of millions of the rural poor in Sub-Saharan Africa alone. This book focuses on recent food and financial crises as they have affected Africa, illustrating the problems using country case studies, that cover their origins, effects on agriculture and rural poverty, their underlying factors and making recommendations as to how such crises could best be addressed in the future.

Climate change is intensifying food insecurity across sub-Saharan Africa (SSA) with lasting adverse macroeconomic effects, especially on economic growth and poverty. Successive shocks from the war in Ukraine and COVID-19 pandemic have increased food prices and depressed incomes, raising the number of people suffering from high malnutrition and unable to meet basic food consumption needs by at least 30 percent to 123 million in 2022 or 12 percent of SSA’s population. Addressing the lack of resilience to climate change—that critically underlies food insecurity in SSA—will require careful policy prioritization against a backdrop of financing and capacity constraints. This paper presents some key considerations and examples of tradeoffs and complementarities across policies to address food insecurity. Key findings include (1) Fiscal policies focused on social assistance and efficient public infrastructure investment can improve poorer households’ access to affordable food, facilitate expansion of climate-resilient and green agricultural production, and support quicker recovery from adverse climate events; (2) Improving access to finance is key to stepping up private investment in agricultural resilience and productivity as well as improving the earning capacity and food purchasing power of poorer rural and urban households; and (3) Greater regional trade integration, complemented with resilient transport infrastructure, enables sales of one country’s bumper harvests to its neighbors’ facing shortages. The international community can help with financial assistance—especially for the above-mentioned social assistance and key infrastructure areas—capacity development, and facilitating transfers of technology and know-how.

Low-income countries in sub-Saharan Africa present unique monetary policy challenges, from the high share of volatile food in consumption to underdeveloped financial markets. This book draws on the International Monetary Fund's research and practice to uncover how monetary policy in this region currently operates, and what changes should be made.