Cost of food forecast to remain high

RETHABILE MOHONO

MASERU – Food inflation is expected to remain high for the next three years, the World Bank has warned. The bank says that the war in Ukraine will result in expensive food and energy for the next three years, intensifying fears that the global economy is heading for a rerun of the weak growth and high inflation of the 1970s.

According to the Lesotho Vulnerability Assessment Committee Dissemination Forum Report of July, Lesotho’s food inflation rate, which is the condition of an increase in the wholesale price index of a necessary food item relative to the general index or the consumer price index (CPI), in May 2022 was estimated at 7.8 percent compared to 6.9 percent in May 2021. The report further states that food inflation decreased steadily since May 2021 from 10.9 percent to 7.4 percent in May 2022 and food prices are higher than 2021 and above the five-year average prices.

The report also highlighted that the food insecure population is likely to increase further due to decreased livelihoods opportunities such as remittances, loss of employment, decreased income from livestock and livestock products sales, as well as increased food and non-food commodities prices. Poorer households are anticipated to employ coping strategies that are not acceptable if immediate action is not taken.

And a further increase in food prices and non-food commodities will worsen the food insecurity situation such that households with food consumption gaps could end up depleting their livelihoods sources.

“Very poor and poor households are likely to experience food gaps which will slightly intensify in the projection analysis period (October 2022-March 2023),” the report says. According to the United Nations, Africa has been particularly vulnerable: about 21 percent of people on the continent suffered from hunger in 2020, a total of 282 million people. Between 2019 and 2020, in the aftermath of the pandemic, 46 million people became hungry in Africa.

No other region on the world presents a higher share of its population suffering from food insecurity.

Also, African households spend a large share of their income on food. According to a recent note in the Financial Times, citing estimates from the IMF, food represents 17 percent of expenditure in advanced economies and in sub-Saharan Africa the figure is 40 percent.