Brian Benza
11 April 2008
Gaborone — With a global food crisis looming, Botswana should brace itself for massive food price hikes and shortages as demand for mostly cereals is increasingly outweighing supply as governments in producer countries curb exports to prevent protests.
Botswana, whose food basket contributes over 21 percent to the Consumer Price Index (CPI), imports about 90 percent of its food requirements. But the picture is looking gloomy for the near future because the situation is being exacerbated by the uncertainty of future supply due to shortages on the international market.
In the past few months, Botswana consumers have had to live with seeing prices of basic commodities hiked every time they visit the store. Notable changes have been recorded for mabele, pasta, rice, cooking oil, maize meal and vegetables.
The price of a 500g packet of pasta has risen from around P3.45 at the beginning of the year to almost P7 now, while the prices of maize meal and mabele have shot up by about 80 percent in the same period. A 2-litre bottle of cooking oil was going for just under P16 late last year, but the price has since risen to about P40 , while the price of a 500g packet of Kellogs corn flakes has also risen from around P12 to P18 in the same period.
The price of rice on the international market - the staple food for about 3-billion people who make up nearly half the world's population - last month hit a 19-year high, wheat prices rose to a 28-year high and almost twice the average price of the past 25 years.
Severe weather in producer countries and a boom in demand from fast-developing countries, coupled with a high demand for bio-fuels, have pushed up prices of staple foods by about 100 percent in the past three years.
Steep increases in food prices have been the main driver of world inflation. The same is true for arid Botswana where agricultural output is low and is heavily reliant on imports. While the situation in Botswana is still relatively stable, probably due to the country's high income levels, which means a relatively smaller proportion of consumers' disposable income is spent on food, the same cannot be said for other African countries where incomes are low and most of the money goes towards food.According to an AFP report, African finance ministers who met in Addis Ababa, Ethiopia last week agreed that African governments are nervously confronting a mounting wave of often deadly social unrest caused by the soaring cost of food and fuel.
Governments across the continent are becoming anxious about public anger as the rise in international food prices pose significant threats to Africa's growth, peace and security with already 40 people killed during price riots in Cameroon in February. There also have been violent demonstrations in Cote d'Ivoire and Mauritania and strikes in Senegal and Burkina Faso, while Egyptians are also planning on taking to the streets over food price hikes in the past week. To meet the crisis, the governments of Cameroon, Senegal and Cote d'Ivoire have suspended VAT on some key consumer products. Cameroon increased wages for public workers, while Sudan increased subsidies for some foods and Egypt suspended rice exports for six months.
In Botswana, however, there is increasing pressure on the consumers' disposable incomes as inflation from both imported and administered prices continue to erode Batswana's purchasing power against relatively stagnant salaries and wages.Already civil servants, who have been awarded a 15 percent salary increment, are pushing for a 30 percent salary adjustment in the wake of the ever-rising food and energy prices.
The National Organising Committee of the National Collective Bargaining Labour Forum says that Botswana public service salaries are below the lower quartile, and a subsequent 22 percent cumulative erosion of salaries from inflation.
The private sector is likely to follow suit with high demands for salary adjustments in view of the high inflation.
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