Food Price Hikes Grip West Africa

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Benin is one of several West African states gripped by soaring food prices.

In a scene on a popular Benin TV series, a farmer named Codjo puts his wife out on the streets because she kept asking him for more and more money to buy groceries.

But then, when he goes shopping by himself, Codjo discovers that prices have indeed doubled.

He laments having driven away his wife.

This fictional sketch is being played out in reality with the rapid rise in prices of basic foods in the capital Cotonou and other towns in Benin over the last six months.

‘Compared to November 2007, prices are between 20% and 50% higher,’ said Claude Allagbe, director of commerce at the ministry of the interior.

UN agency IRIN found vendors in Cotonou selling a kilogramme of salt for 450 CFA francs, up from 250 CFA francs in November.

Rice was selling at 450 CFA francs per kilo compared to 300 CFA francs and palm oil had leapt to 900 CFA francs from the earlier price of 500 CFA francs.

The psychological impact these price rises have had on families is palpable, says IRIN.

In Attogon, a village near Cotonou, market sellers told the agency that it is now common to see men accompany their wives to market to check and compare prices.

At Glodjigbem, another village 35 km from Cotonou, elders said they recently had to calm the local mechanic who had flown into a rage at his wife’s requests for more money.

The price rises are adding pressures at many levels of society.

‘The price of some products have increased even beyond the reach of people who work,’ said Anselme Amoussou, a teacher.

For Etienne Badou, a member of the Consumers Defence League in Benin (LDCB), ‘the fissures within families and the society are more apparent in urban than rural areas but in fact they are much worse in rural areas where people are poorer’.

The highest rates of nutritional deficiencies in Benin are in the rural north in the districts of Malamville and Karimama.

But in total some 33 of the country’s 77 districts are ‘at risk of food insecurity’ according to the World Food Programme (WFP).

WFP says that 23% of Beninois children under five show signs of moderate stunting and 11% of children suffer from severe malnutrition.

On 30 April, Benin’s government announced that it would undertake a series of measures to alleviate the price rises.

On 1 May, the tax levied on domestic and imported products to pay for social services called TVA (Taxe sur la Valeur Ajoutée) was suspended for rice, flour and other staples.

However the measure does not appear to have worked.

‘There were some problems with applying the policy change,’ Allagbe, the director of commerce, said.

The problem, says Beninois economist Rhetice Dagba, is that there is no way for the government to ensure that traders pass on their tax savings to consumers.

‘To apply this policy it would be necessary to go to every market and rigorously inspect the price of every good,’ Dagba said.

Another measure to alleviate high food prices that Benin’s government is pushing is food self-sufficiency which agriculture minister Roger Dovonou said would require the more than doubling of current production levels.

As in other African countries, Benin’s agricultural policy for the past three decades was ‘to encourage cash crops for export to the detriment of food production,’ according to Dagba, the economist.

The new policy of food self-sufficiency will take time to implement, she added.

Another shorter-term solution is dumping food reserves.

‘Cereals the government keep in reserve have been released onto the market,’ the director of the food reserve, Irene Bio Aboudou told IRIN.

Her hope is that as supplies increase prices will go down.

But the measure is costing the state more than 35 billion CFA francs (US$83 million), according to government statistics.

And so far prices have kept rising, one housewife told IRIN while she was shopping in the market.

‘My family are finding it harder to live on what we can afford,’ she said. ‘They make me feel that I am at fault. That I am doing something wrong.’

Meanwhile, Ghana has become the latest country in West Africa to announce it is struggling to manage its national budget in the face of spiralling world prices for fuel and food.

Newly released statistics from the government show Ghana’s expenditure on crude oil imports rose from US$ 500 million in 2005 to US$ 2.1 billion by the end of 2007 for the same quantity of oil.

Ministry of Finance officials say Ghana’s current budget was drawn up with an estimated crude oil price of US$ 85 a barrel, whereas the current world price of oil is hovering around US$ 135 per barrel.

In an address broadcast on national television and radio across the country on 22 May, President John Kufuor announced a US$1 billion package of interventions to mitigate the impact on Ghanaians.

He said the government would ‘immediately’ drop all import duties on rice, wheat, yellow corn and vegetable oil.

He also announced the removal of excise duties on oil and tax on fuel for the country’s fishermen and subsidies on fertilizer and free tractors for farmers.

The President acknowledged that the mitigation policies will involve slimming down other development projects but he assured that ‘there will be no cut backs on the policies designed to protect the vulnerable.’

On the streets of Accra, the news received popular support. A loaf of bread that sold at US$ 0.80 in January is now selling at US$ 1.80. A bag of maize that was sold at US$ 40 six months ago now costs US$ 75. The increases are also reflected in transport fares which have also gone up by more than 30%.

‘I can now save some money to keep my sons in school,’ said a 55 year old father of three, John Appiah who says he currently spends 70% of his US$ 300 monthly income on food and transportation every month.

Emergency fiscal measures including suspending import taxes, restricting exports and releasing emergency food stocks onto markets have been undertaken in many countries in the region.

Ghana’s West African neighbours, Ivory Coast, Niger and Burkina Faso have all witnessed violent protests in response to the rising global food prices that has crippled several families.

In Senegal, 130,000 public sector workers are currently striking in protest at high food prices. They are demanding salary hikes. There are also frequent strikes in Burkina Faso.

In Ghana however the timing of the announcement has triggered political backlash as this is a presidential election year.

A coalition of opposition parties in the country called the Committee for Joint Action (CJA) described the measures as ‘a badly conceived public relations gimmick which is bound to fail’.

However the World Bank welcomed the measures.

An economist with the World Bank in Accra, Chris Jackson, said the real challenge will be sustaining these measures because the global shocks triggered by the surging oil price and spiralling cost of food will continue for months.

He noted that subsidies on fertilizer and tractors for Ghanaian farmers have been attempted in the past ‘without being as successful as were originally envisaged’ because of challenges in implementation.

‘There is a fundamental change in the global economy which means the crisis will be around for some years so the fiscal implications need to be well thought out,’ he warned.

He said the removal of taxes on petroleum products and some food items will ‘certainly’ improve Ghana’s ability to raise enough needed revenue to invest in producing more food for local consumption.