Food prices have reached historic levels globally in 2022, according to the Global Crisis Response Group, posing a major challenge for food security, particularly for developing countries that are net food importers.
As Ethiopia is a country that is heavily reliant on food imports, it did not escape unscathed. This inflation is further exacerbated by the depreciation of the Ethiopian currency relative to the US dollar.
Taking wheat for instance, according to UNCTAD data, the average international price of wheat was 89% higher in October 2022 than it was in 2020, while the average US dollar exchange rate relative to the Ethiopian currency rose by 30%+ during the same period. This has led to a significant increase in the price of wheat imports for Ethiopia, with an estimated price increase of 176%, more than double the price in 2020. The country also had to pay more in 2022 for the same volume of wheat imported two years prior, representing about 9% increase in its total food import bill.
While, thankfully, Ethiopia has been taking measures to ameliorate the dire situation by boosting wheat production, the double burden of food inflation and depreciation erodes the fiscal space that Ethiopia needs to address the challenges of recovering from the COVID-19 pandemic, the cost-of-living crisis, and the climate emergency.
Solutions put forward by the UN roughly include:
- Easing financial constraints,
- Ensuring open trade and access to staple foods, and
- Increasing domestic, as well as international food production.
To read the full UNCTAD report, please visit the organization’s official website using the link below. https://unctad.org/a-double-burden
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