Russia's War On Ukraine Still Impacting African Economies

Three years since the start of Russia's war on Ukraine, the fallout of the ongoing conflict continues to exacerbate Africa's economic vulnerability and debt burdens, according to a report by UK thinktank ODI Global.

"Our research reveals that the shocks have been multifaceted and, in some cases, long-lasting. The economic and financial pathways from the price shocks stemming from volatile fuel, food and fertiliser prices are now compounded by the persistent and broad-based strength of the US dollar, which has appreciated significantly in trade-weighted terms," ODI researchers say.

The report finds that although price shocks in fuel, food and fertilisers have subsided somewhat, they appear to be stabilising at higher levels compared to the pre-Covid-19 trends. See Figure 1

"While some economies have managed to mitigate the economic impact of the conflict, low-income countries with weaker buffers and less resilience against shocks continue to feel the long-term reverberations."

Global uncertainty over the Russia-Ukraine war, tightening financial conditions, and increased borrowing costs have increased debt sustainability risks. According to the World Bank, the proportion of these countries at high risk of and in debt distress has doubled from 27 in 2015 to 54 as of September 2024.