Nairobi Global Trade Center
The African Development Bank (ADB) has warned Kenya, Angola, and Ethiopia over the rising cost of energy, food, and other commodities.
In a notice contained in ADB’s biannual Africa Macroeconomic Performance Outlook publication released last week, the bank said the high cost of living could trigger social unrest.
According to ADB, conflicts in Eastern Europe and the Middle East could trigger supply chain disruptions, exacerbate inflation across the world, and make Africa’s situation more precarious.
“Internal conflicts and violence could also result from rising prices for fuel and other commodities due to weaker domestic currencies and reforms,” the report said.
“For instance, the removal of fuel subsidies in Angola, Ethiopia, Kenya, and Nigeria and the resulting social costs has led to social unrest driven by opposition to government policy.”
The warning comes at a time when hundreds of people in Africa’s most populous country, Nigeria, have been marching to protest the high cost of living, prompting the government to release grain from the national reserves.
Nigeria’s inflation hit 29.9% last week, the highest mark since mid-1996. In response, authorities ordered the release of 102,00 metric tons of grain, including rice and maize, to lower food prices.
As for Kenya, the removal of fuel subsidies was introduced by President William Ruto after he took office in September 2022.
However, in August 2023, the Kenyan government reinstated a small subsidy to stabilize retail fuel prices for the next 30 days, a reversal of government policy following public outrage over the high cost of living.
In January 2024, the IMF criticized Kenya for reinstating fuel subsidies, saying that the lack of funds to pay oil traders would distort the budget.
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