Russia-Ukraine War And Nigeria’s Economic Turmoil
By Kolawole O. Iyiola
The Russian President, Vladimir Putin had in late February authorized a special military operations against the neighbouring Ukraine. This is to stop the country from joining the western military alliance, the National Atlantic Treaty Organization (NATO), largely led by the United States of America.
A lot of infrastructural facilities in Ukraine such as schools, military bases, hospitals, markets, ports have been destroyed by Russian troops. And this has been making life difficult not only for Ukrainians, as the effect is being felt among other people round the globe.
This war in Ukraine is causing an enormous humanitarian crisis. According to United Nations report, about 7 million Ukrainians have been internally displaced while another 5 million were living as refugees in neighboring countries of Poland, Hungary etc. Ukraine’s economy is equally being devastated as a result of this lingering conflict.
Additionally, the war is triggering global ripple effects through multiple channels, including commodity markets, trade, financial flows, displaced people, and market confidence. In the surrounding region, a large wave of refugees have continue to put pressure on basic services. Disruptions to regional supply chains and financial networks, as well as heightened investor risk perceptions, will weaken regional growth.
The Russian-Ukraine war has badly affected the innocent people of Ukraine and put them in a state of emergency. During the early beginning of the war, many Ukrainian population had to find ways to flee the country for their own safety to other neighboring countries in order to find solace and succour as the country continue to suffer from Russian Forces aggression.
The war has greatly affected the global market as these two countries are the major global exporters of some major commodities which most countries of the world depends on in order to satisfy their needs.
Russia is the world’s largest exporter of wheat, accounting for 18 percent of global exports, while Ukraine accounts for a further 7 percent. Russia is also the largest exporter of natural gas (25 percent), palladium (23 percent), nickel (22 percent), and fertilizers (14 percent). It also accounts for 18 percent of global exports of coal, 14 percent of platinum, 11 percent of crude oil, and 10 percent of refined aluminum.
Meanwhile, Ukraine is the largest exporter of seed oils primarily used in cooking, accounting for two-fifths of global production, and is also the fourth largest exporter of corn, accounting for 13 percent of global exports. Ukraine also produces up to 50 percent of global neon gas which is a critical element used in chipmaking.
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The Russian-Ukraine war has led to global inflation leading to rise in food prices, supply disruptions and rise in the global price of crude oil. African countries are acutely affected by the growing crisis, which has sent prices of grains, cooking oils, fuel, and fertiliser soaring.
The former chairman of the Nigerians in Diaspora Organisation Americas (NIDOA), USA, Mrs. Patience Key, said the Russia-Ukraine war would not only threaten the global economy, it would also affect Nigeria, being an oil-producing country.
As it stands now, the price of wheat rose to its highest level, while Nigeria is a major importer of wheat products, being the third most widely consumed grain in the country. Both Russia and Ukraine are the largest exporters of durum wheat to Nigeria.
A glance at the data from the NBS shows that Nigeria imported durum wheat worth over N128.1 billion in the 9-month period of 2021, while it recorded a N144.1 billion import in the full year of 2020.
Presently, Nigeria is already battling with high inflationary pressure and food supply chain disruptions, the surge in commodity prices further puts a strain on the local market, since Nigeria largely depends on importation to meet local demands.
Also, the price of rice has risen to over N34,000 per 50kg bag, sachet water already selling for N20. Nigeria currently spends over 50% of its expenditure on feeding, and with food prices rising at unprecedented levels, it only means disruption for Nigerian’s purchasing power.
Also from Ukraine, Nigeria imports iron ore for the production of steel and primary manufacturing hardware. Apart from this, Russia exports seafood such as mackerel, herring and other fish types to Nigeria, while Ukraine exports dairy and agricultural products to the country.
According to the United Nations COMTRADE (Common format for Transient Data Exchange for power systems) , is a file format for storing , Nigeria’s imports from Ukraine was valued at $156 million in 2020, while the country’s major exports to Nigeria were iron and steel.
Also, in 2020, commodities imported to Nigeria from Russia was valued at $1.02 billion. The main products are wheat ($556m), non-fillet frozen fish ($131 million), and potassic fertilisers ($83.4 million).
The significant cost of what this means to Nigerians is the increase in transportation and food items and other necessities which shows a continuous dent in the purchasing power of Nigerians .
Also Recall that Nigeria’s inflation for the the month of May was over 17% and with the sudden spike in the cost of basic items, the country bears the risk of experiencing another upsurge in inflation in the upcoming months.
Iyiola, a student of Mass Communication Department, Babcock University, Ogun, wrote from Abuja.
