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Food inflation in Africa is shrinking partly

Athis booth In Kisumu, western Kenya, Walter Otieno plops dough balls into steaming pans. After a minute or two, the mosaic spheres, called mandazi, are ready for sale. But his customers may not be as full as they used to be. Mr Otieno halved his ‘African donut’, as the snack is also called, which he sold for ten Kenyan shillings (approximately eight us points) each.

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“I had to do it to break even,” he explained. His ingredient costs skyrocketed. A 10-litre can of cooking oil costs Sh3,000, up from Sh2,000 in January; flour is two-thirds more expensive than it was a few months ago. Kenya’s annual food price growth hit a record high of 16% in October. The knock-on effect of Russia’s invasion of Ukraine exacerbated the impact of the regional drought.

There are other examples elsewhere in the market. A milk seller holds up two plastic bottles. Two years ago 40 shillings could buy a liter. Today, he fills a half-liter bottle for the same price. Various fruits are sold in smaller bunches, traders say.

Estimated cost of food staples in sub-Saharan Africa has risen by almost a quarter since 2020 International Monetary Fund. Locally grown food prices have also soared. In Ghana, for example, the price of cassava has increased by almost 80%. Deflationary inflation is also on the rise. In South Africa, biltong (dried meat) is not as thick. In Uganda, street vendors have shrunk the rolox (“rolled egg”), which is more or less a vegetable omelet rolled in a pancake.

Western consumers often see the shrinkage through the eyes of an annoyed potato chip package that is suspiciously large. But African consumers have long bought goods in small quantities, many of whom lack the cash, credit or space to buy in bulk. In Nigeria, companies have learned to sell sachets of shampoo and laundry detergent to cash-strapped customers. As the economy ground to a halt, manufacturers scaled back even more production. Today, Nigerians can buy a “small” Domino’s pizza and gobble it down with bags of Baileys, a creamy spirit.

Poor consumers mean retailers often see cutting back on products as a better option than raising prices. Add to that the fierce competition in many markets, with dozens of vendors selling the same goods. “Price increase?” exclaimed Mr. Otieno. “I wouldn’t dare to do that because customers would run away.”

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