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SOCIO-ECONOMIC PERSPECTIVES

Cost of food still proportionally very high in sub-Saharan Africa

By our News Team | 2022

Geopolitical tensions, supply chain disruptions and increasing energy prices are leading to rising food inflation in the region.

Consumers in Kenya, Nigeria and Angola are among those spending proportionally more for their food, as spending on basic foodstuffs remains high in sub-Saharan Africa compared with other emerging and developing countries.

A document published by international research company Euromonitor, entitled 10 Key Socioeconomic Facts About Sub-Saharan Africa, notes that geopolitical tensions, supply chain disruptions and increasing energy prices are leading to rising food inflation, further constraining consumers’ purchasing power in the region.

Socio-Economic Perspectives

A cassava farmer arranges his tubers while he waits for buyers at Elekara market in Oyo, Nigeria. Photo credit: Tenisnaps via Wikimedia Commons

This purchasing power has been under strain for some time, given low income levels. Of the nine SSA countries surveyed (Kenya, Nigeria, Angola, Uganda, Ethiopia, Ghana, Tanzania, Côte d’Ivoire and South Africa), South African consumers fare best when it comes to spending on food as a proportion of their total income. Tanzania is second best and Côte d’Ivoire is third best.  

The statistics are for 2021, with Euromonitor noting that: “countries heavily affected by food inflation were those with among the largest spending on food and non-alcoholic beverages, namely Ethiopia, Angola and Nigeria”.

Among the other key points:

AfCFTA to boost bilateral trade and promote digital platforms

Intra-African trade is not uncommon, but mainly consists of minerals and low-value manufactured and processed goods. The key to improving bilateral trade will be export diversification and product sophistication. 

Cross-border services, particularly in the financial sector, mobile payments and digital shopping, are also set to benefit over the medium to long term. While there are still several hurdles to overcome in terms of intellectual property rights and competition policies, the African Continental Free Trade Area (AfCFTA) E-commerce Protocol aims to develop and promote local online platforms.

M-commerce to lead digital transformation

Rising penetration of mobile internet and smartphones is driving digital transformation in sub-Saharan Africa, as only a relatively small share of households have access to a computer. Mobile internet penetration in sub-Saharan Africa almost doubled over the past five years, reaching 48% of the total population in 2021, while smartphone penetration rose to 77% of households in 2021. 

Lack of physical addresses is being overcome by unconventional delivery solutions, partnerships or establishing central pick-up points. For example, an on-demand grocery delivery company in South Africa, Zulzi, has incorporated ‘what3words’ into its delivery process, while an online delivery service in Kenya, Mtaani, has established over 80 local pick-up points linked to Kenya’s mobile payment system M-Pesa.

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