Food prices in Africa

Abstract

Food prices in Africa respond in familiar ways to changes in the global environment, but there are a number of unique characteristics that have to be accounted for in understanding how these prices play out in domestic markets. African countries are price takers in global agricultural commodity markets, and face high farm gate to consumer costs, which are a major driver of food price inflation. Furthermore, the uncertainty that accompanies poor policy formulation and implementation distorts markets and results in the skewing of investment to mitigate the negative impacts of policy uncertainty rather than to build future opportunities. Finally, the high levels of poverty as well as of inequality distort consumer markets, which are fragmented by these extremes, and which compete with informal markets and with own consumption. In this paper, we address the role that these factors play in understanding trends in food prices across a spectrum of commodities in Ghana, Kenya, South Africa and Zambia. These characteristics make it difficult to find relevant and timely data to help understand what is really going on in the real world.