<\/p>\n
Africa is heading into a strong El Ni\u00f1o from a weaker economic position than the last one a decade ago, adding to price pressures triggered by the Iran war, the Institute of International Finance said.<\/p>\n
Higher oil prices caused transport costs to increase, and a stronger dollar, while tighter financing conditions have added to the strain, IIF analysts Candice Reddy and Leila Hamilton said in a research note.<\/p>\n
\u201cThe interaction of these shocks has altered the macroeconomic starting point from which countries may confront a strong El Ni\u00f1o episode,\u201d they said, noting that the impacts will vary sharply across the region. \u201cEgypt, Zambia and Ethiopia appear to have the least room to look through another food-price shock.\u201d<\/p>\n
Forecasters are predicting the current El Ni\u00f1o cycle will be the strongest on record. It threatens to bring climatic extremes, from severe drought in parts of southern Africa to flooding in the east of the continent, raising the risk of crop damage.<\/p>\n
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SA produces enough food, yet millions face hunger
El Ni\u00f1o could push millions into acute hunger, UN warns<\/p>\n
The last severe occurrence in 2015-16 took place against a backdrop of falling oil prices and generally softer global inflation, the IIF said.<\/p>\n
\u201cToday\u2019s environment looks markedly different as climate-related risks emerge alongside elevated energy prices, tighter financial conditions and renewed dollar strength,\u201d it said. \u201cAt the same time, food systems are becoming increasingly exposed to geopolitical disruptions, supply chain vulnerabilities and strategic competition for critical commodities.\u201d<\/p>\n
Food accounts for more than half of the consumer price index in Ethiopia and Zambia, meaning higher costs quickly feed into headline inflation. In South Africa, on the other hand, it comprises about a fifth of the CPI basket, suggesting the impact will be more limited, the IIF said.<\/p>\n
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Zambia faces an additional vulnerability \u2014 the nation relies on hydropower for the majority of its electricity generation, and a drought may reduce water levels. Still, Africa\u2019s second-biggest copper producer has installed a significant amount of solar power over the past year, and is expanding coal-fired generation too.<\/p>\n
South Africa and Zambia, southern Africa\u2019s biggest corn producers, both reaped a record harvest this year, which will help provide a buffer.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Africa #faces #Ni\u00f1o #room #weather #shock #IIF<\/p>\n","protected":false},"excerpt":{"rendered":"
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