The African Development Bank (AfDB) has issued a stark warning, cautioning that a surge in commodity and fuel prices may spark social unrest, particularly amid opposition to government policies such as subsidy removal.
News Agency of Nigeria (NAN) report that, this caution came in the bank’s macroeconomic performance and outlook for 2024, projecting a higher economic growth rate for the continent compared to the 3.2% recorded in 2023.
The AfDB identified a number of variables that led to this alert. First of all, it suggested that the El Niño phenomenon and rising geopolitical tensions in the Middle East and Eastern Europe would cause supply chain disruptions. It warned that these interruptions would make food and energy prices more volatile worldwide, with Africa being especially vulnerable to these shocks.
The report also emphasised the possible economic cost of regional conflicts and political unrest brought on by breaks in constitutional administrations. It issued a warning that funds intended for social welfare and development would instead be used for defence and security costs, further taxing the economies.
The AfDB highlighted potential sanctions that could have a negative impact on the economy in order to highlight the negative repercussions of illegitimate government takeovers.
The research also emphasised the possibility of domestic disputes in nations as a result of increased energy and commodity costs, which are sometimes brought on by currency devaluation or the elimination of subsidies. The elimination of energy subsidies in Nigeria, Angola, Kenya, and Ethiopia was specifically mentioned as a cause of societal unrest stemming from opposition to government policy.
The statement read, “Increases in fuel and other commodity costs as a result of weaker domestic currencies and reforms could possibly lead to internal disputes and bloodshed.” For example, societal unrest has been sparked by opposition to the elimination of fuel subsidies in Angola, Ethiopia, Kenya, and Nigeria and the ensuing socioeconomic costs.