Answer to Question #316641 in Macroeconomics for A.v

Question

Discuss the impact that the war in russia and ukrain had on economic development of the globe and in South

Africa.

Answer 1

Over the past few weeks, Clinton Mwenda is shocked every time he goes to fuel the motorbike he uses to transport people. "The fuel price has really increased and is costing us as Kenyans," the 28-year-old told DW.

"Some petrol stations that comply with the government price are cheaper, but others like the local petrol stations are higher." As a result, one liter of petrol has risen to 160 Kshs (€1,27, $1,46) in some places.

Economists have warned that the war in Ukraine could further push oil prices up and increase inflation in Africa.

"The last time we had a windfall from oil prices related to war was in 1991, during the Gulf War," said Abdul-Ganiyu Garba, a professor of the Department of Economics at Nigeria's Ahmadu Bello University in Zaria.

"We know it will directly impact the price of crude oil. The revenue may increase, but since we have shifted oil investment to multinational companies, they are more likely to reap greater revenues than the country itself."

Bracing for higher inflation

"If there is an increase in crude oil prices, it means inflation will grow globally, the cost of most of our imports will also rise, which will transfer to the domestic crisis," the Nigerian economist added. Commodity prices have skyrocketed in many African countries, making life more challenging for millions of people.

"People start starving once these countries fight because they [global powers] presented themselves to African countries as mother countries," Dox Deezol, a South African entrepreneur and artist in Johannesburg, told DW.

As a member of BRICS (Brazil, Russia, India, China, South Africa) — the world's five emerging economies — South Africa was relatively silent when Russia annexed Crimea in 2014. However, the South African government has urged restraint this time. 

"South Africa is integrated into the global economy. So the war's impact on the global economy, as we have seen in the soaring prices of oil and energy generally, will affect South Africa because when the world sneezes, South Africa catches a cold," Professor Siphamandla Zondi, an international relations expert and head of BRICS studies at the University of Johannesburg, told DW.

It's not just the oil prices that could impact Africa. For example, there is significant agricultural trade between African countries and Russia and Ukraine.

Africa's trade with Russia and Ukraine

In 2020, African countries imported agricultural products worth $4 billion from Russia. Wheat accounted for approximately 90% of these imports. Egypt was the largest importer, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya, and South Africa.

Similarly, Ukraine exported agricultural products worth $2.9 billion to Africa in 2020. Wheat accounted for roughly 48% of this, maize 31%, and sunflower oil, barley, and soybeans accounted for the remainder.

The ongoing war could affect supply chains and raise the cost of imports. It is also unclear what effect the sanctions imposed by the US and its allies on Russia will have on Africa-Russia trade relations.

Mali caught between Russia and Ukraine

Pro-Russian sentiment has gradually increased in Africa, particularly in former French colonies. Moreover, Russia's invasion of Ukraine comes at a time when Mali has frosty relations with France concerning the presence of military advisors from the private Russian company Wagner.

"Obviously, the Malian situation has nothing to do with the situation in Ukraine," Babarou Bocoum, a politician from the SADI party, told DW. "However, it can perhaps have an impact because, once again, France considers Mali to be its zone of influence," Bocoum said.

According to him, it would be wrong for France to take advantage of this opportunity to impose itself on Mali by force. "This can not be excluded because France refuses to leave."

But for Moctar Sy of the movement Generation engagee, a Malian civil society organization, nothing justifies Russia's military intervention. "I strongly condemn the decision of Russia to wage war on Ukraine, violating international law, but especially the sovereignty of states," Sy told DW. "I take this opportunity to express my solidarity with the Ukrainian people, respect for its borders, its history, for a just peace and without humiliation."

Africa should be concerned

Thousands of African students study in Ukraine and Russia. Many of them were caught off guard by the war and are now stranded.

"Africans who have their relatives living or trading with Ukrainians or Russians have a cause to be concerned," said David Kikaya, founding director at the Research Institute for Peace Policy and International Affairs.

He warned that if the Ukraine-Russia conflict continues, it could draw in other countries. "That is why the conflict should not only concern Africans in Africa but also in the diaspora."

Congolese poet and writer Sinzo Aanza said he was worried that Russia's invasion of Ukraine would also affect politics in African countries. But he hopes that Africa will not become a victim of rivalry between great powers this time.

"This is very bad news for Africa in general because we are on a continent that has always been affected by external influences," Aanza told DW.

"Most of the conflicts on the African continent today are related to global economic, political, and geostrategic considerations. Unfortunately, you cannot separate what is happening today in the Central African Republic or Mali from what is happening in Ukraine," Aanza added.

He firmly believes that the Russians are pursuing a strategy of weakening the powers that have sought to weaken Moscow in Europe.