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INTERNATIONAL MONETARY FUND
AFRICAN AND RESEARCH DEPARTMENTS
DEPARTMENTAL PAPER
Climate Change and Chronic Food Insecurity in Sub-Saharan Africa
Prepared by Diogo Baptista, Mai Farid, Dominique Fayad, Laurent Kemoe, Loic Lanci, Pritha Mitra, Tara Muehlschlegel, Cedric Okou, John Spray, Kevin Tuitoek, and Filiz Unsal
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Copyright ©2022 International Monetary Fund
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Names: Baptista, Diogo, author. | Farid, Mai, author. | Fayad, Dominique, author. | Kemoe, Laurent, author. | Lanci, Loic, author. | Mitra, Pritha, 1974-, author. | Muehlschlegel, Tara, author. | Okou, Cedric, author. | Spray, John, 1989-, author. | Tuitoek, Kevin, author. | Unsal, Filiz, author. | International Monetary Fund, publisher.
Title: Climate change and chronic food insecurity in Sub-Saharan Africa / Prepared by Diogo Baptista, Mai Farid, Dominique Fayad, Laurent Kemoe, Loic Lanci, Pritha Mitra, Tara Muehlschlegel, Cedric Okou, John Spray, Kevin Tuitoek, and Filiz Unsal.
Other titles: International Monetary Fund. African Department (Series). | International Monetary Fund. Research Department (Series).
Description: Washington, DC : International Monetary Fund, 2022. | 2022 Sept. | Departmental Paper Series. | DP/2022/016 | Includes bibliographical references.
Identifiers: ISBN 9798400218507 (paper)
9798400218538 (ePub)
9798400218590 (Web PDF)
Subjects: LCSH: Food security -- Climatic factors -- Africa, Sub-Saharan.
Classification: LCC HD9000.5 .B37 2022
The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
This paper builds on a research project on macroeconomic policy in low-income countries (IATI Identifier: GB-1-202960) supported by the UK’s Foreign, Commonwealth and Development Office (FCDO) and the partners in the IMF’s COVID-19 Crisis Capacity Development Initiative (CCCDI)–Belgium, Canada, China, Germany, Japan, Korea, Spain, Singapore, and Switzerland. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the FCDO, or the partners in the CCCDI.
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Contents
Acronyms and Abbreviations
Executive Summary
1. Climate Change and SSA’s Intensified Food Insecurity
2. Macroeconomic Consequences
3. Policies
A. Fiscal Policy
B. Monetary and Financial Sector Policies
C. Regional Trade Integration
D. Agricultural Market Structure and Government Intervention
E. Legal and Regulatory Environment
F. Digitalization
References
BOXES
Box 1. Drivers of Staple Food Prices in Sub-Saharan Africa
Box 2. A Spatial Multisector Open Economy Model of Food Insecurity
Box 3. Agricultural Practices and Climate Change
Box 4. Mobile Money
FIGURES
Figure 1. Sub-Saharan Africa: Food Inflation and CPI Inflation, 2001–22
Figure 2. Global Food Insecurity, Resilience to Climate Change, and SSA Development Outcomes
Figure 3. Food Import Dependency Ratio, 2020
Figure 4. Sub-Saharan Africa: Share of Agriculture and GDP per Capita, 2020
Figure 5. Impact of Climate Shock on Key Macroeconomic Variables
Figure 6. Cash Transfers vs. Fertilizer Subsidy: Impact of Climate Shock on Key Macroeconomic Variables
Figure 7. Irrigation Investment and Cash Transfers: Impact of Climate Shock on Key Macroeconomic Variables
Figure 8. Climate Finance Flows to Sub-Saharan Africa, 2015–19
Figure 9. Access to Finance
Figure 10. Access to Finance and Cash Transfers: Impact of Climate Shock on Key Macroeconomic Variables
Figure 11. Sub-Saharan Africa: Deposit Accounts and Mobile Money Accounts, 2013—18
Figure 12. Transport Costs and Import Tariffs: Impact of Climate Shock on Key Macroeconomic Variables
Figure 13. Global Trade Interventions for Food Products, 2016–20
Figure 14. Regulations and Laws Enabling Business and Agriculture, 2019
Figure 15. Enhanced Digital Access, 2010–17
TABLES
Table 1. Wasting and Stunting in Children, 2015–20
Table 2. Agricultural Subsidies, 2019–22
Table 3. Price Controls in SSA
Acronyms and Abbreviations
| AI | Artificial Intelligence |
| CCDR | Country Climate and Development Reports |
| CMAP | Climate Macroeconomic Assessment Program |
| COP26 | The United Nations Climate Change Conference in Glasgow |
| ECOWAS | Economic Community of West African States |
| FAO | Food and Agriculture Organization of the United Nations |
| GHG | Greenhouse Gas |
| GSMA | Global System for Mobile Communications Association |
| IFC | International Finance Corporation |
| IFPRI | International Food Policy Research Institute |
| IPCC | Intergovernmental Panel on Climate Change |
| SDG | Sustainable Development Goals |
| SSA | Sub-Saharan Africa |
| WFP | World Food Programme |
| UN | United Nations |
Executive Summary
Climate change is intensifying food insecurity across SSA with lasting adverse macroeconomic effects, especially on economic growth and poverty. Successive shocks from Russia’s war in Ukraine and the COVID-19 pandemic have increased food insecurity in SSA by at least 30 percent since early 2020—IMF (2022a) examines these near-term issues. Complementing that paper, this departmental paper is the first IMF policy paper to address the longer-term issue of climate change and food insecurity, with SSA-specific considerations. In 2022, 12 percent of the population is suffering from high malnutrition and unable to meet basic food consumption needs. The rising frequency and intensity of droughts, floods, cyclones and higher temperatures and sea levels are set to exacerbate this number by hampering agricultural production and food distribution. After each major climate event, people die of hunger and the survivors are less productive. Over the longer term, poor nutrition hurts early childhood development, educational attainment, and earnings potential. Consequently, increased food insecurity could jeopordize the hard-earned improvements in incomes and education and health outcomes across SSA in recent decades. These and other serious humanitarian and economic implications could also fuel conflict and large-scale migration.
Addressing the lack of resilience to climate change, critically underlying chronic food insecurity in SSA, will require careful policy prioritization against a backdrop of financing and capacity constraints. Implementing multiple measures amid high debt levels, competing development needs, and capacity limitations is extremely extremely challenging. However, many reforms can be implemented without raising fiscal pressures. These include crucial changes in trade, regulatory, market structure, and financial sector policies— which can also catalyze sizeable private sector investment in resilience building. While the optimal policy mix will vary across countries, policy considerations (tradeoffs and complementarities) result in key findings that include the following:
Fiscal policies focused on social assistance and efficient public infrastructure investment can improve poorer households’ access to affordable food, facilitate expansion of climate-resilient agricultural production, and support quicker recovery from adverse climate events. Critical infrastructure areas include irrigation systems, telecommunications, transport, storage facilities, and renewable electricity. In cases where agricultural subsidies are present, the subsidies should be redesigned to ensure better targeting and reduce economic costs.
Improving access to finance and digitalization is key to stepping up private investment in agricultural resilience and productivity as well as improving the earning capacity and food purchasing power of poorer rural and urban households. To this end, critical steps will be advancing property rights, expanding telecommunications infrastructure for mobile banking and enlarging access to early warning systems and up-to-date market and weather information that support agricultural production, distribution, and sales. Reduced informational asymmetries and improved financial literacy would support greater use of insurance. These reforms would also support micro finance or public-private partnerships that can jump start private finance.
Greater regional trade integration and resilient transport infrastructure enable sales of one country’s bumper harvests to its neighbors facing shortages. Tariff reduction and regional alignment of agricultural and product market laws and regulations (especially with respect to water, seeds, and fertilizer) will all be elemental. Expansion of producer organizations can facilitate adoption of new technologies, scale up food production and distribution, and support price stability.
The international community can help with financial assistance, capacity development, and facilitating transfers of technology and know-how. For example, climate funds could play a critical role through grants and concessional financing; and development partners can support research in a host of areas such as irrigation technology and climate-resilient seeds, while also helping expand climate and financial literacy. The IMF is supporting SSA countries in these efforts through technical assistance, capacity development, and financial support including through climate-oriented public financial management advice and lending facilities such as the Extended Credit Facility and, once operational, the Resilience and Sustainability Trust.