Despite the abundant food resources in the region, many North African countries rely on imported foods for the majority of their food requirements. The region is not suited to growing enough food to feed its growing population. Water scarcity and increased trade encourage overfishing and damage fish populations. The areas with the most plant life are coastal and highland regions. In Egypt, more than 90% of its population lives in the Nile Delta.
High wheat prices
Due to the current geopolitical situation, some countries in North Africa are having trouble meeting their domestic needs. With over half of their grain production being exported, high prices for the staple crop are making it difficult for them to feed their populations. As a result, wheat prices are now at record highs, with Egypt alone importing over 80 percent of its wheat needs.
Earlier this year, some African countries relied on the Russian and Ukrainian nations for their wheat supplies. In fact, these countries accounted for almost thirty percent of the world’s wheat exports. However, if Russia block the Black Sea ports, they may not be able to export the wheat harvest from last season. Furthermore, much of the agricultural land in Ukraine is located in the eastern part of the country, where the Russian attacks began. While the situation is uncertain, experts have warned against Russia imposing new tariffs on wheat exports, saying the increase in the price of the staple grain is too high to offset the current crisis.
The poorer countries in Africa are especially affected by rising wheat prices, as their limited purses are largely geared towards the export of agricultural products. This has meant that most North African countries rely on imports for their basic staple foods. Furthermore, years of neglect of agricultural livelihoods have led to a limited food security in the region. This is making these poor countries incredibly vulnerable to changes in the international market.
Wheat and rice are two important staple foods for price takers in north Africa, and commercial imports account for the majority of their food needs. Rice is heavily imported from Asia, which reduces domestic production and drives down urban food prices. In 1995, imported rice in Sierra Leone undercut local prices by up to 28 percent. At the Freetown market, rice cost between 23 and 28 U.S. cents per kilogram.
A high percentage of Zambian urban consumers act as price takers during key times of the year, when demand for agricultural products increases. In response to this, urban consumers start buying industrially milled meal at higher prices. While transactions costs are still high, the government is helping its large millers to maintain profits. However, the increase in transaction costs may be depressing to price takers.
In the face of an increasingly savage climate, many countries in the Sahel and Horn of Africa must import the majority of their food needs. The problem has become so severe that it is affecting the sustainability of peace and stability. In order to meet the growing demand, African countries need to adopt modern agriculture methods, increase access to cash and investment, and develop debt restructuring strategies. The goal is to build resilience in the food and agricultural systems of these countries. In addition, the World Bank and International Monetary Fund have filled in the financing gap by issuing special drawing rights.
Several crops are grown in the region, including rice, cocoa, and banana. The most productive areas are along the Mediterranean coast and southern African coastline. Some of the largest production areas are in the Democratic Republic of the Congo, Cote d’Ivoire, Ghana, and Madagascar. The continent also produces millet, a type of grain native to the savanna regions. Rice is also produced in some countries, and it is associated with rapid urbanization. Countries that produce rice include Algeria, Ghana, Sierra Leone, and Egypt.
The region’s income distribution is highly unequal with the top 10% earning more than half of the regional income. This inequality is particularly pronounced in North Africa. According to Chancel et al., economic inequality in the region is increasing. The share of income attributed to the top decile in the region ranges from 37% in Algeria to 65% in South Africa. This compares to the top 10% income share in the US and France.
Many of the factors leading to increasing inequality include unresponsive wage structures, lack of investments, and high unemployment. The availability of household survey data has increased in recent decades, but the quality remains a problem. The World Inequality Lab uses methods to improve data quality and make it easier to compare inequality estimates. The lack of tax statistics in most African countries makes it difficult to assess the determinants of income inequality. Nonetheless, recent developments in the region suggest that progress is being made toward reducing inequality levels.