Faced with supply chain challenges which are threatening the continent’s food security, Africa has come up with ways to deal with the Russia-Ukraine war shocks which include turning to cheaper wheat alternatives and launching the Africa Trade Exchange (ATEX).

The Russia-Ukraine war which started in late February this year has created historic global trade and commodity disruptions, which have been felt worldwide with Africa feeling much heat in terms of food commodity supplies.

The Russia-Ukraine crisis has increased the strain on critical supply chains in commodity markets, with current and expected price increases in agricultural products and inputs such as cereals and fertilisers.

This in turn put pressure on the fragile African countries which heavily relied upon these supply chains for basic goods such as wheat. However, the critical implications are the downstream effects of potential supply chain constraints that are raising prices, increasing vulnerability and food insecurity and building unsustainable pressure on already stretched African fiscal environments.

As such, African countries have turned out to use cheaper wheat alternatives amid inflated prices of the commodity for months now courtesy of Russia’s invasion which squeezed exports from Ukraine while its own exports are subdued by the sanctions from the US and allies. Russia and Ukraine account for about 40% of global wheat supplies. 

Recent reports from the media revealed that food producers in Kenya, Egypt, the Democratic Republic of Congo, Nigeria and Cameroon are mixing cheaper alternatives into their bread, pastries and pasta with local rice, manioc flour and sorghum substituting for wheat.

This can also be adopted by the majority of African countries including Zimbabwe where bread prices have been on the rise with bakers citing soaring wheat prices as the reason for the price hikes.

Currently using the auction market rate, US$1 is not enough to buy a loaf of bread. Prices have soared to above US$2 dollars which is beyond the general public’s reach. 

According to researchers, world annual sorghum production is over 60 million tonnes, of which Africa produces about 20 million tonnes, hence opting for the crop instead of wheat is the most viable.

Rice production in Africa is also not bad as according to Statista. The continent’s rice production in the trading year 2021/2022 was 23 million metric tonnes.

Meanwhile, Africa has also come up with an Africa Trade Exchange, a platform to pool-procure bulk basic commodities and ensure countries access scarce supplies transparently and equitably.

AFREXIMBANK in collaboration with other key continental institutions including, the African Continental Free Trade Area (AfCFTA) Secretariat, and UNECA launched the ATEX building on the African Development Bank’s US$1.5 billion emergency food production plan to mitigate the effect of the war on food prices through rapid production of wheat, maize, rice and soybean.

According to the United Nations Economic Commission for Africa, ATEX is a digital trade platform which will complement the existing digital ecosystem constructed to support the implementation of the AfCFTA agreement.

ATEX will help realise the development potential of e-commerce and digitalisation, particularly by facilitating access for small and medium-sized enterprises (SMEs) to the wider African market. This will enhance intra-African trade and the African trade position in the global market, thus assisting in adjusting to disruptions in supply chains and continued growth of African businesses and economies,” the UN Commission said.

The UN Commission further highlighted that to support supply chain resilience, ATEX will digitally enable the trade of the main agricultural commodities and inputs imported by the continent from Russia and Ukraine: cereals (including wheat, maize, and grains), fertiliser and associated inputs, oils, oilseed, as well as other products and inputs critical to support agricultural value chains.

The platform will facilitate pooled procurement by African buyers of these commodities from African suppliers where possible, as in the case of fertilisers; and from outside the continent where necessary, as in the case of cereals and grains, thereby contributing to the creation of new, continental supply chains which insulate Africans from the volatility which has characterised recent years,” the UN Commission said.

The ATEX is a commendable move made by Africa which if implemented well will reduce the supply chain challenges in the continent in light of the war and also even when things are normal, it will aid in bettering African economies through strengthening their trade.