February 1, 2023

Climate change intensifying food insecurity across Sub-Saharan Africa with lasting adverse macroeconomic effects, IMF warns in new report

Managing Director Kristalina Georgieva in a conversation with Center for Global Development President Masood Ahmed in Washington, DC on January 30, 2020.
Managing Director Kristalina Georgieva in a conversation with Center for Global Development President Masood Ahmed in Washington, DC on January 30, 2020.

Climate change is intensifying food insecurity across Sub-Saharan Africa with lasting adverse macroeconomic effects, especially on economic growth and poverty, the International Monetary Fund (IMF) said in a new report released on Thursday.

The new report “Climate change and food insecurity in Sub-Saharan Africa” contends that successive shocks from Russia’s war in Ukraine and the COVID-19 pandemic have increased food insecurity in Sub-Saharan Africa by at least 30 percent since early 2020.

The agency wrote in the report’s executive summary that in 2022, 12 percent of the population is suffering from high malnutrition and unable to meet basic food consumption needs.

“The rising frequency and intensity of droughts, floods, cyclones and higher temperatures and sea levels are set to exacerbate this number by hampering agricultural production and food distribution,” IMF wrote.

It added, “After each major climate event, people die of hunger and the survivors are less produc­tive. Over the longer term, poor nutrition hurts early childhood development, educational attainment, and earnings potential. Consequently, increased food insecurity could jeopordize the hard-earned improve­ments in incomes and education and health outcomes across SSA in recent decades. These and other serious humanitarian and economic implications could also fuel conflict and large-scale migration.

“Addressing the lack of resilience to climate change, critically underlying chronic food insecurity in SSA, will require careful policy prioritization against a backdrop of financing and capacity constraints. Implementing multiple measures amid high debt levels, competing development needs, and capacity limitations is extremely extremely challenging. However, many reforms can be implemented without raising fiscal pressures. These include crucial changes in trade, regulatory, market structure, and financial sector policies—which can also catalyze sizeable private sector investment in resilience building. While the optimal policy mix will vary across countries, policy considerations (tradeoffs and complementarities) result in key findings that include the following:

  • Fiscal policies focused on social assistance and efficient public infrastructure investment can improve poorer households’ access to affordable food, facilitate expansion of climate-resilient agricultural produc­tion, and support quicker recovery from adverse climate events. Critical infrastructure areas include irrigation systems, telecommunications, transport, storage facilities, and renewable electricity. In cases where agricultural subsidies are present, the subsidies should be redesigned to ensure better targeting and reduce economic costs.
  • Improving access to finance and digitalization 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. To this end, critical steps will be advancing property rights, expanding telecommunications infrastructure for mobile banking and enlarging access to early warning systems and up-to-date market and weather information that support agricultural production, distribution, and sales. Reduced informational asymmetries and improved financial literacy would support greater use of insurance. These reforms would also support micro finance or public-private partnerships that can jump start private finance.
  • Greater regional trade integration and resilient transport infrastructure enable sales of one country’s bumper harvests to its neighbors facing shortages. Tariff reduction and regional alignment of agricultural and product market laws and regulations (especially with respect to water, seeds, and fertilizer) will all be elemental. Expansion of producer organizations can facilitate adoption of new technologies, scale up food production and distribution, and support price stability.
  • The international community can help with financial assistance, capacity development, and facilitating transfers of technology and know-how. For example, climate funds could play a critical role through grants and concessional financing; and development partners can support research in a host of areas such as irrigation technology and climate-resilient seeds, while also helping expand climate and financial literacy. The IMF is supporting SSA countries in these efforts through technical assistance, capacity development, and financial support including through climate-oriented public financial management advice and lending facilities such as the Extended Credit Facility and, once operational, the Resilience and Sustainability Trust  “

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