Highlights
After peaking in the second quarter of 2022, international food and crude oil decreased throughout the rest of the year. Nevertheless, international commodity prices are still well above average levels five-year trends.
Despite reduced output and rising production and transport costs, import demand for cereals was still high which has affected regional trade dynamics and the price of imported food. Wholesale maize prices in key producing and exporting countries (Tanzania, Kenya, and Uganda) remained high in the last quarter of the year; prices are likely to be elevated until the next harvest in mid-2023.
Crude oil prices continued to fall in the last quarter of 2022. However, average fuel prices across the region were stable and significantly higher than a year ago. As of December 2022, average pump prices stood at USD 1.5/L –55 percent higher than the same month last year. Petrol prices in Burundi continued to increase in the last quarter of 2022 whereas prices in South Sudan, Somalia, and Uganda declined.
The prolonged drought in the Horn of Africa has greatly impacted food prices by undermining food availability and economic access to food. For nearly two years, staple food prices have sustained an upward trend in most parts of Somalia, even surpassing price levels recorded during the 2011 famine. In the Arid and Semi-Arid Lands (ASAL) of Kenya and across most markets in Oromia and Somali regions of Ethiopia, local cereal prices continued to soar through the last quarter of 2022 and remained well above the national average.
In the last quarter of the year, local currencies across Eastern Africa continued to lose their value against the U.S. dollar (USD), with South Sudan and Sudan recording the highest depreciation of the local currency against the USD both in the official market and parallel markets.
The cost of living in Eastern Africa are still significantly higher than a year ago. The annual inflation rate across the region averages at 24.2 percent. December marked the ninth monthly decline in annual inflation in Sudan; however, the country still records the highest annual inflation rate in the region (at 87.3 percent). Ethiopia, Rwanda, Burundi, and Uganda continued to record double-digit inflation in the last quarter of 2022.
Food prices are pushing up the overall cost of living for households, with food inflation averaging at 27.2 percent in Eastern Africa. Sudan, Rwanda, Burundi, Ethiopia, Uganda, and Kenya continued to record double-digit food inflation throughout quarter four of 2022.
In the last quarter of the year, the average per capita monthly price of a local food basket was stable across Eastern Africa. However, it is still significantly higher than a year ago. As of December 2022, the average per capita monthly price of a local food basket reached USD 19.2 across the Region – representing a 46.3 percent increase from the same month last year. Sudan and South Sudan continued to record the highest year-on-year (y-o-y) increase (up 89.4 and 80.5 percent, respectively). Somalia and Sudan continued to record the most expensive food baskets in the region (USD 28.8 and USD 28, respectively).
In line with global price developments, the average price of imported vegetable oil across Eastern Africa recorded a declining trend in the last quarter of the year, with variations among countries.
Nevertheless, in y-o-y terms, vegetable oil prices are firming, by showing a 24.7 percent increase between December 2022 and December 2021. Ethiopia and South Sudan recorded the highest increases (up 56.5 and 51.8 percent, respectively), followed by Sudan (up 23.8 percent). Vegetable oil prices are well above the five-year average in all countries of the Region.
Source: World Food Programme