Ukraine: Mozambique among African countries most exposed to food and energy shocks

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Ukraine: Mozambique among African countries most exposed to food and energy shocks

1:57 CAT | 17 May 2022

File photo: Lusa

Financial rating agency Moody’s revealed today that it considers Mozambique to be among the African countries most exposed to food and energy shocks resulting from the Russian invasion of Ukraine, warning of likely social and political unrest.

“In the next 18 months, we anticipate an increase in social and political risks as a result of the global shock to food and energy prices, as happened in 2008,” an analysis of the impact of the war in Ukraine in countries of the Middle East and Africa reads.

In the document, sent to customers and to which Lusa has had access, Moody’s analyses 16 countries and concludes that “Lebanon, Mozambique, Togo, Namibia, Jordan and Senegal are the most exposed to energy and food shocks and, therefore, the most vulnerable to social and political unrest”.

In compiling the list, Moody’s looked at energy and food dependence and compared it with the cost of food and energy imports as a percentage of GDP, considering that “these are good indicators, because an increase in food and energy prices has a broad spectrum and is not limited to wheat and oil prices”.

Countries with a heavy dependence on oil and food imports, already with high social risks and a governance system where the populace does not have an electoral outlet to voice their frustrations, are the most at risk of political and social unrest, Moody’s says.

International aid, it adds, “has been sent by the international donor community, but is unlikely to be able to fully protect the most vulnerable, given the likely shortage of basic products such as cereals”.

The Russian invasion of Ukraine has resulted in a rise in food and energy prices in a region still trying to recover from the effects of the Covid-19 pandemic.

“Higher food and energy prices will drive inflation and negatively affect the balance of payments and public finances of countries that are net importers of food and oil, exacerbating macroeconomic challenges and fiscal and external imbalances,” Moody’s concludes.

Source: Lusa