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COVID-19, the oil price slump and food security in low-income countries

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  • Heigermoser, Maximilian
  • Glauben, Thomas

Abstract

The shutdown measures implemented to fight the Covid-19 pandemic resulted in a historic drop in crude oil prices, which implies existential challenges to countries depending on energy exports. The three largest crude oil exporters in Africa (Algeria, Angola and Nigeria) are - like numerous other raw material exporters worldwide - facing devaluing currencies and dwindling currency reserves. As food security in these states largely depends on imports of wheat and rice, domestic food prices are expected to rise due to the currency depreciation. This puts further pressure on populations with already low incomes, while local shutdowns and reduced economic activity lead to additional income losses. Recent panic buying and (temporary) export restrictions on international grain markets further exacerbate the situation. Not least due to currently ample grain stocks, such measures are not to be recommended. Instead, solidarity amongst nations, taking the form of emergency aid such as debt relief, food deliveries and medical aid, is required more urgently than ever. Furthermore, it is advisable to ease bureaucratic and tariff trade barriers to facilitate international trade. Demands for greater autarchy and de-globalisation should be avoided in the current precarious situation.

Suggested Citation

  • Heigermoser, Maximilian & Glauben, Thomas, 2020. "COVID-19, the oil price slump and food security in low-income countries," IAMO Policy Briefs 37e, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
  • Handle: RePEc:zbw:iamopb:37e
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    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Developing economies

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    Cited by:

    1. Bekhzod EGAMBERDIEV, 2021. "Household Impact Of The Covid-19 Pandemic From A Development Economics Perspective - A Review," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 15-30, June.
    2. Emerson Abraham Jackson, 2021. "Forecasting COVID-19 Daily Contraction in Sierra Leone with Implications for Policy Formulation," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 8(1), pages 29-43, January.

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