Will global food price falls reflect in Africa?

The Food and Agriculture Organization's World Price Index has fallen for the seventh consecutive month in February, with lower prices for major cereals offsetting the rising price of sugar and meat. Kola Masha, CEO of Babban Gona, discussed the food price trends and options for Western African economies to tackle rising food inflation in an interview with CNBC Africa. Masha highlighted the need for West African countries to become more self-sufficient in food production to combat inflation driven by reliance on imported food. He emphasized the importance of increasing local productivity to address the inflationary pressures stemming from rising global food prices. Masha raised concerns about acute food insecurity in conflict-affected regions of Africa, particularly in West Africa, where high levels of severe food insecurity have been reported. He pointed out the challenges faced by farmers in the region due to economic depression, low farm productivity, and escalating input costs. The doubling of fertilizer prices, attributed to global factors like the Ukraine war, has significantly impacted farmers, leading to a 400% increase in fertilizer costs. Masha stressed the need for sustainable solutions that increase farmers' purchasing power through improved access to credit, rather than relying on short-term subsidies to mitigate rising costs. One of the key issues highlighted by Masha was the limited access to finance for farmers in West Africa. Despite agriculture contributing 40% of Nigeria's GDP, the sector receives only a fraction of commercial debt, hindering farmers' ability to invest in high-quality inputs essential for productivity growth. Masha underscored the broader economic implications of underfinancing agriculture, citing the low commercial loan-to-GDP ratio in Nigeria compared to countries like Thailand and China, where agriculture receives more significant financial support. The interview also touched on the mechanization of farming processes in West Africa, with Masha cautioning against overemphasizing mechanization as the sole solution to improving farm productivity. While mechanization can enhance labor productivity, Masha highlighted the importance of adopting high-quality seeds, fertilizers, and chemicals to drive yield and overall farm productivity. He noted the challenges faced by farmers in accessing these essential inputs, primarily due to the lack of affordable loans. Masha called for a shift towards providing market-rate loans to genuine farmers to drive sustainable productivity growth and reduce food inflation. In conclusion, the discussion with Kola Masha shed light on the complex challenges facing West African economies in addressing food inflation and enhancing agricultural productivity. The need for long-term solutions that empower farmers, improve access to credit, and prioritize sustainable agricultural practices emerged as critical themes in tackling rising food prices and insecurity in the region.