{
  "title": "IMF Survey: Coping With Food Price Increases in Sub-Saharan Africa",
  "publication": "IMF News, March 20, 2008",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/socar032008a",
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  "summary": "African countries face some difficult policy choices because of rising inflationary pressures that have caused a spike in food prices. But rising food and fuel prices will not translate into higher sustained inflation if the policy response is correct, according to an IMF analysis.",
  "authors": [
    "John Wakeman-Lynn",
    "Paulo Drummond IMF African Department March"
  ],
  "publishDate": "2008-03-20",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication: IMF Survey by John Wakeman-Lynn and Paulo Drummond, IMF African Department.\n- Date: March 20, 2008\n- Core finding: Rising food and fuel prices have increased inflationary pressures in Sub-Saharan Africa, but \"rising food and fuel prices will not translate into higher sustained inflation if the policy response is correct.\""
    },
    {
      "heading": "Drivers of food-price increases",
      "content": "- Mix of temporary and longer-term factors driving up prices.\n- Longer-term structural factors:\n  - \"Rising biofuels production in the United States and European Union accounts for almost half of the increase in consumption of major food crops in the past year.\"\n  - Growth in per capita income in emerging economies has increased demand.\n  - Higher energy and fertilizer costs have contributed to higher prices for all agricultural commodities.\n  - \"Most of these factors are likely to be permanent.\"\n- Temporary supply factors:\n  - Droughts, especially in countries south of the equator, reduced wheat production in 2007.\n  - Post-election violence in Kenya led to shortages and price hikes in neighboring countries as well as Kenya."
    },
    {
      "heading": "Impact and distributional effects",
      "content": "- Fuel and food-price shocks have a significant impact on low-income countries.\n- Because food represents a larger share of poorer consumers' spending, global food-price increases have a bigger impact on inflation in poorer countries.\n- Net effect on terms of trade varies across countries; positive in about half the countries of Sub-Saharan Africa—particularly commodity exporters.\n- Within countries:\n  - Farmers producing export crops may gain.\n  - Urban consumers of imported food and oil have been hurt."
    },
    {
      "heading": "Social implications",
      "content": "- Rising food prices can have severe social consequences.\n- Recent incidents cited:\n  - Food price–related riots in several countries.\n  - Demonstrations in two cities in Burkina Faso.\n  - Political unrest in Cameroon spilled over into protests over food and fuel prices.\n  - Niger has suffered food-price-related riots."
    },
    {
      "heading": "Inflation statistics",
      "content": "- \"In sub-Saharan Africa on average, food inflation is currently 2.8 percentage points higher than headline inflation.\"\n- Note: \"the latest increases in food prices are not yet reflected in CPI data.\"\n- Overall: Monetary policy is responding appropriately in most countries in the region, and overall inflation \"remains contained by historical standards.\""
    },
    {
      "heading": "Policy guidance and recommendations",
      "content": "- Policy responses should be custom-tailored to each country's situation and to whether shocks are temporary or permanent.\n- Guiding principles:\n  - If the country can, it should seize the opportunity to encourage expansion of domestic agricultural production through:\n    - Improving infrastructure and distribution and storage systems.\n    - Increasing competition.\n    - Removing policy distortions that discourage food production.\n    - Removing barriers to trade.\n    - Avoiding distortionary policies such as untargeted subsidies.\n  - Temporary increases in food prices need not call for countervailing monetary policy, particularly if monetary policy is already accepted as credible.\n  - There may be a need for tighter policies if sustained high food price inflation starts to have significant second-round effects.\n  - The effect of temporary shocks could be mitigated by:\n    - Temporary and targeted subsidies.\n    - Temporary tax measures.\n    - Increased reliance on international aid.\n  - These measures can help protect the most vulnerable."
    },
    {
      "heading": "Contact",
      "content": "- Comments on this article should be sent to imfsurvey@imf.org\n\nSource: IMF Survey: Coping With Food Price Increases in Sub-Saharan Africa (IMF African Department), March 20, 2008.\n\n---\n\n Content in this bundle\n\n- Car032008afpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- In The News\n- Commodity price moves\n- Bio-Tchané interview\n- Africa growing rapidly\n- Debt relief helping Africa\n- Africa attracting investors\n- Backing leading reformers\n- IMF backs Liberia\n- Strauss-Kahn on Africa\n- Burkina Faso\n- Cameroon\n- Niger\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar032008a"
    }
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    "Authors: John Wakeman-Lynn, Paulo Drummond IMF African Department March",
    "Published: March 20, 2008",
    "Publication: IMF Survey by John Wakeman-Lynn and Paulo Drummond, IMF African Department.",
    "Date: March 20, 2008",
    "Core finding: Rising food and fuel prices have increased inflationary pressures in Sub-Saharan Africa, but \"rising food and fuel prices will not translate into higher sustained inflation if the policy response is correct.\"",
    "Mix of temporary and longer-term factors driving up prices.",
    "Longer-term structural factors:",
    "Temporary supply factors:",
    "Fuel and food-price shocks have a significant impact on low-income countries.",
    "Because food represents a larger share of poorer consumers' spending, global food-price increases have a bigger impact on inflation in poorer countries.",
    "Net effect on terms of trade varies across countries; positive in about half the countries of Sub-Saharan Africa—particularly commodity exporters.",
    "Within countries:",
    "Rising food prices can have severe social consequences.",
    "Recent incidents cited:",
    "\"In sub-Saharan Africa on average, food inflation is currently 2.8 percentage points higher than headline inflation.\"",
    "Note: \"the latest increases in food prices are not yet reflected in CPI data.\"",
    "Overall: Monetary policy is responding appropriately in most countries in the region, and overall inflation \"remains contained by historical standards.\"",
    "Policy responses should be custom-tailored to each country's situation and to whether shocks are temporary or permanent.",
    "Guiding principles:",
    "Comments on this article should be sent to imfsurvey@imf.org",
    "[Car032008afpdf (PDF)](/-/media/websites/imf/imported/external/french/pubs/ft/survey/so/2008/car032008afpdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[In The News](https://www.imf.org/en/news/search)",
    "[Commodity price moves](https://www.imf.org/external/pubs/ft/survey/so/2008/RES032008A.htm)",
    "[Bio-Tchané interview](https://www.imf.org/external/pubs/ft/survey/so/2008/INT032008A.htm)",
    "[Africa growing rapidly](http://www.imf.org/external/pubs/ft/survey/so/2008/CAR022108B.htm)",
    "[Debt relief helping Africa](http://www.imf.org/external/pubs/ft/survey/so/2008/CAR022508A.htm)",
    "[Africa attracting investors](http://www.imf.org/external/pubs/ft/survey/so/2008/NEW022508A.htm)",
    "[Backing leading reformers](http://www.imf.org/external/pubs/ft/survey/so/2008/POL022108A.htm)",
    "[IMF backs Liberia](http://www.imf.org/external/pubs/ft/survey/so/2008/NEW031808A.htm)",
    "[Strauss-Kahn on Africa](https://www.imf.org/external/pubs/ft/survey/so/2008/CAR022908A.htm)",
    "[Burkina Faso](https://www.imf.org/external/country/BFA/index.htm)",
    "[Cameroon](https://www.imf.org/external/country/CMR/index.htm)",
    "[Niger](https://www.imf.org/external/country/NER/index.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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