Trade, Food Security and the War in Ukraine: The Cases of Egypt and Sudan

The objective of this paper is to examine the nexus between trade, food security and the war in Ukraine with a special focus on Egypt and Sudan. Given the high dependency of the two countries on wheat imports, both experienced high inflation and lower economic growth, threatening their food security. Thus, the contribution of the paper is threefold: first, it examines the macroeconomic implications of the war on the two economies. Second, it analyzes the extent to which food security deteriorated and finally how trade can partially help improve food security in the two countries. To do so, using an error correction model, our results show that the exchange rate pass through was high in Egypt and Sudan and can have long-term implications on inflation. To move forward, we explore how the two countries might develop bilateral capacities targeting agriculture, electricity, and infrastructure with the view to scale-up the economic cooperation. We show, using the trade complementarity index that despite a limited complementarity between their trade structures, there is room to increase their bilateral exports if infrastructure and other behind-theborder barriers are addressed.