|Food prices in Africa surge as consumers stock up on essentials and businesses seek profits amid the COVID-19 scare. / Photo by Rido via Shutterstock|
Food prices in Africa surge as consumers stock up on essentials and businesses seek profits amid the COVID-19 scare. People across the continent are even calling for their governments to interfere, reports international news provider DW.
The rapid rise of food prices in Africa
A citizen named Jean Marie Mutsinzi, who lived in Kigali, the capital of Rwanda, shared that the food he was buying last week at RWF1500 (S$2) rose by more than RWF1000. “This is a problem for the people,” he added. Mutsinzi often shops at the Kimironko market, which is one of the largest markets in the capital. He also learned from his other relatives that the same thing is happening in other parts of the country.
Rwanda was among the first governments in Africa to act against price gouging. It occurs when the seller increases the prices of commodities than what is considered fair or reasonable. On Monday, Rwanda’s trade ministry fixed the prices of certain food items, such as cooking oil, rice, and sugar. However, it did not specify what punishments will be imposed for people who engage in price gouging.
Kigali-based economist Teddy Kaberuka said there are several reasons why food prices surge in the country. These include sellers taking advantage of the crisis, an increase in demand because of the panic-buying of people who are not sure of what will happen tomorrow in their nation, and the trade environment worldwide. For instance, many of their commodities usually come from China but since the country was heavily affected since the start of the year because of the pandemic, traders no longer traveled to China.
Not the time to make “abnormal profit”
In Kenya, authorities appealed to traders in the hope of curbing the speculation or the purchase of goods with the hope that it will become more valuable in the future. The country’s Health Cabinet Secretary Mutahi Kagwe said that the pandemic is not the time for people “to make abnormal profits.” The Competition Authority of Kenya, mandated to enforce the Act that will enhance the welfare of people of Kenya by promoting and protecting effective competition in markets and preventing misleading market conduct, have also warned the traders against goods hoarding. It threatened the imposition of steep penalties if traders violate it. Yet, the Kenyan government did not also set limits concerning food prices. People rushed to purchase commodities in the capital Nairobi after the country reported its first case of coronavirus.
DW interviewed Esther Mwangi, one of the worried shoppers in Kenya. She said the hurried to the supermarkets only to find that sanitizers were already out of stock. So, she had to visit a chemist and purchase some sanitizers there. She added that she needed sanitizers because they have public service vehicles and they cater to a lot of people.
|Citizens are now feeling the impact of the pandemic as there is also disruption of the supply chain is dependent on imports from Asian countries. / Photo by Orlowski Designs LLC via Shutterstock|
Citizens are now feeling the impact of the pandemic as there is also disruption of the supply chain since their country is dependent on imports from Asian countries, especially China. Nairobi resident Gumato Dorcase said the shops in their city are “empty” and Dorcase is worried about if sanitizers are still available in the village where his relatives are. He is wondering whether the Kenyan government will intervene in the situation.
Cleanshelf Supermarkets is a supermarket chain ordered by the Kenyan Competition Authority to refund its customers after hiking hand sanitizer prices. The Ruaraka branch of Cleanshelf normally retails hand sanitizers at Ksh.800 but determined on March 15 that they sold the product above the normal price, such as Ksh.1,000 and the prices continued to increase within hours.
The supermarket defended that the decision of increasing the price of hand sanitizers did not come from their management but an employee, meaning it was an “individual error.” They said the employee will face disciplinary action.
Appealing to trader’s goodwill as the only state intervention
In Ghana, food prices have also increased as panicked citizens went on shopping sprees. Some products were sold for over 100% more than its regular price. No measures were taken by the government yet to keep the prices stable, except appealing to the goodwill of traders. Amasaman-based nursing mother Ama Akyiaa said that such a kind of state intervention is not enough. She shared that foodstuff prices still surge. Some staples affected are their local cocoyam leaves, tomato, okra, and yam. The traders seem to be doing things to make money for themselves and make consumers uncomfortable.
Economist Gordon Abeka Nkrumah opined that the situation may continue to worsen because Ghanaian traders are only relying on stocks. If the coronavirus is not contained and the situation continues in a few more months, it would lead to more price hikes in the country.
Share of consumer expenditure spent on food
Our World in Data, a scientific online publication that focuses on large global problems, published the usual share of consumer expenditure spent on food products in certain African countries without the pandemic. The statistics measured the percentage of total consumer expenditure per person and include only food consumed at home and not tobacco or alcoholic beverages. Nigeria had a 59% share of consumer expenditure on food, Kenya 52%, Cameroon 45%, Morocco 35%, Tunisia 22%, and South Africa 19%.
Meanwhile, the long-term price index across various food items in 2015 (latest data) measured relative to real prices in 1900 are as follows: beef (203.67), lamb (149.68), barley (68.49), coffee (58.72), rye (51.52), corn (32.90), cocoa (30.97), tea (29.147), peanuts (28.17), palm oil (23.79), wheat (22.01), rice (17.67), sugar (17.09), and pork (13.75). The consumer price index is a measure that examines the weighted average of prices of a basket of consumer goods and services. It is calculated by taking the price change for each item in the predetermined basket of goods and averaging them.
The increases in food prices are not likely to improve in the future. As more people are at risk of losing their jobs because of the impact of coronavirus, the prices will further put a dent on their wallets. The situation is direr in poorer countries because most of the citizens are spending the majority of their income on basic food staples. This means that it will be devastating for people, considering that some are already pushed into poverty. Governments can play a role in responding to such crises and help their citizens, who help the economy, too.