A report by the International Monetary Fund (IMF) has revealed how the high cost of fuel and food linked to Russia’s war against Ukraine is affecting the Democratic Republic of Congo.
According to the IMF, Russia’s invasion of Ukraine risks slowing down the D.R. Congo’s economic recovery from the coronavirus pandemic. The report estimates that following the pandemic and global lockdown, D.R. Congo’s economy grew 5.7% in 2021 with the inflation rate sitting at 5.3%
Following Russia’s invasion of Ukraine, Sub-Saharan Africa has experienced a record surge in fuel prices which have ultimately affected the prices of other commodities in the region.
Only recently, oil prices are said to have soared to higher marks of more than $130 – notably the highest recorded since 2008. And with more sanctions on Russia and more oil companies exiting the Russian oil market space, the crisis is projected to grow higher.
According to the IMF report, the surge could squeeze the budget for development spending for the Central African country, as the government may move to subsidise fuel prices.
However, despite the reports and insights, the IMF disclosed that Congo’s 2022 economic outlook remains “favourable.” The international financial institution also encouraged the government to bolster its reserves thereby protecting itself from unstable commodity markets. D.R Congo is the world’s third-largest copper producer.
If the government can leverage the record-breaking prices for copper and gold, it will help ease the pressure on the budget and could lead to more investment in the mining industry.
In many Sub-Saharan regions, the same rise in fuel prices are threatening their economies. In Nigeria, chaos seems to be the order of each day at various petrol stations in the country’s commercial hub, Lagos. Arguments and conflicts often break out even as drivers blare their car horns waiting in long queues that spills into the road and disrupt traffic.
However, in recent news, global oil stakeholders at the CERAWeek energy conference held in Houston on Monday, 7th March deliberated a combination of more fossil fuel production and renewable energy sources to enable less reliance on Russia as oil prices soared following the country’s invasion of Ukraine.
