- Before the war between Russia and Ukraine broke out, Zimbabwe’s economy was already saddled with rising inflation, low foreign direct investments, unsustainable foreign debt levels and corruption, among a litany of problems
Harare. A war in far-away Ukraine has worsened Zimbabwe’s decades old multi-layered economic crisis with the southern African country’s agriculture industry being the hardest hit amid heightened food insecurity and rising cost of living, United Nations agencies have warned.
In a report titled: Impact of the Ukraine Crisis in Zimbabwe that covers the period between February 2022 and when Russia invaded its neighbour and October, the World Food Programme (WFP), International Organisation for Migration (IOM) and Food and Agriculture Organisation (FAO) painted a gloomy picture of the situation in Zimbabwe.
Before the war between Russia and Ukraine broke out, Zimbabwe’s economy was already saddled with rising inflation, low foreign direct investments, unsustainable foreign debt levels and corruption, among a litany of problems.
Zimbabwe was also emerging from a devastating Covid-19 pandemic that led to unprecedented economic disruptions globally.
The outbreak of the war led to a spike in prices, supply chain disruptions and a general deterioration of macro-economic and living conditions.
UN agencies that have been feeding more than half of Zimbabwe’s population for years fear that the Russia-Ukraine conflict will make things even harder for the southern African country.
“The faraway war has had direct effects on increasing food, fuel and fertiliser prices and disrupted supply chains and trade, leading to fiscal tightening and a widening of inequalities and governance issues,” the agencies said in the report.
“Poor households have further fallen into food insecurity emanating from the increased cost of living.
“While some of these factors cannot be directly linked to the Ukraine crisis, analysis shows that the conflict in Europe has exacerbated vulnerability and migration as a coping mechanism.”
The WFP, IOM and FAO have been jointly monitoring the impact of the Ukraine-Russia conflict on rising food prices, food security, access to essential needs and agricultural inputs, and migration patterns in Zimbabwe.
They concluded that the situation was “precarious because inflation still remains very high, the lean season has begun earlier than usual, high costs for agricultural inputs— particularly fertiliser are being observed, and there is possibility of a delayed start of the rainy season in the primary crop-producing northern regions of the country.”
Zimbabwe’s inflation, which is pegged at more than 280 percent, remains one of the highest globally and the only country in southern Africa with headline inflation above 50 percent.
The country is expected to struggle to get fertiliser for the forthcoming season.
Zimbabwe uses around 800 000 tonnes of fertiliser a season and over half of it is imported from Russia and Belarus.
“Zimbabwe depends heavily on fertiliser imports (ammonium nitrate, urea, potash, and ammonia gas) from Russia and Belarus and the conflict has far reaching consequences on availability and affordability,” the UN agencies added.
“In fact, 70 percent of the fertilisers used in Zimbabwe are imported as raw materials and or finished products and this exposes the market to the effects of global shortages and price volatility.
“These higher prices are making fertilisers unaffordable and out of reach to communal farmers and will have a negative effect on productivity of maize, soya beans and other crops in the main 2022/23 cropping season.”
Globally, the conflict has had a significant impact on the supply of fertiliser raw materials – creating a shortage and leading to all-time high price increases of over 100 percent.
“The rise in logistical costs by over 100 percent due to increased demand and a shortage of shipping vessels and fuel, has increased the landed fertiliser prices in Zimbabwe and other import dependent countries,” the agencies added.
Zimbabwe has also been struggling with fuel imports. The country gets most of its fuel from Mozambique, South Africa and Singapore.
The price of fuel, which was already on an upward trend prior to the start of the Ukraine-Russia conflict, experienced a sharp increase immediately after the start of the Ukraine crisis.
Fuel prices rose by 17 percent for petrol from US$ 1.51 a litre in March to US$1.77 a litre in June, while diesel rose by 25 percent from US$1.51 a litre in March to US$ 1.88 a litre in June.
“This upward trend was also observed on the global market and is largely attributed to the effects of the Ukraine-crisis,” the report added.
“In June, the government of Zimbabwe enacted measures to stabilise the price of fuel, resulting in a reduction of the average cost by 10 percent.
“However, the current price remains 18 percent higher than it was during the pre-crisis period.
“The rising costs of fuel contributed to the increase in the price of basic food and non-food commodities.”
During the same period, Zimbabwe also recorded a 15 percent decrease in the supply of vegetable oil.
The decrease was attributed to the Ukraine crisis as Zimbabwe imports 96 percent of its sunflower oil from abroad, making it vulnerable to the effects of the disruption in global supply chains.
Russian and Ukrainian exports account for nearly a quarter of the global total for the commodity.
The sharp rise in prices has seen the cost of a basic food basket in Zimbabwe increasing by an average of seven percent between January and September this year.
The price of bread increased by more than 100 percent from US$1 a loaf in January to about US$2.10 a loaf in May.
There was also a slight decrease in remittances, which the UN agencies said could be attributed “partially to the impact of the crisis in countries where remittances originate from.”
“Among those who received remittances, 90 percent reported that these were not adequate to cover essential needs,” the report added.
“Of the households who reported receiving remittances, between 62 and 75 percent use the remittances mainly for food, followed by education (17 to 21%) and health services (four to seven percent.”
Zimbabwe’s economy has been lurching from one crisis to another for the past two decades.
The economic problems started surfacing in 1997 when the regime of the late Robert Mugabe paid unbudgeted pensions to veterans of the country’s 1970s liberation war, leading to a currency collapse.
The situation got worse in 1999 when Zimbabwe sent its troops to fight in Democratic Republic of Congo civil war that also drew armies from Uganda, Rwanda and Angola.
A violent land reform programme that displaced nearly 5 000 commercial farmers precipitated the e
Disputed elections and human rights violations led to the country’s economic isolation, which has taken a serious toll on the economy.
Zimbabwe is one of the few African countries that have been vocal in their support of Russia’s excursion into Ukraine.