Unleashed Voices: Africa starves, Russia profits
David McNair, executive director for global policy of the One Campaign is monitoring the horrors in store for millions of Africa’s most challenged from Russia’s latest embargo of Ukrainian grain.
This the latest compelling individual to whom Andelman Unleashed has given voice, exploring the most critical issues of our time.
From the moment Russia announced it was re-imposing the embargo on Ukrainian grain shipments that have helped feed vast populations on the African continent and more broadly across the world, it was clear to David McNair and the ONE Campaign that a crisis was imminent. The issue has only been deeply complicated by the military coup d’état in Niger, potential disruptions to African supply chains, and finally the accelerated attacks on Ukraine’s own grain reserves and overland supply routes, as well as the declaration by Ukraine that Russian shipping across the Black Sea was a legitimate target for military action.
ONE describes itself as “a global movement campaigning to end extreme poverty and preventable disease by 2030, so that everyone, everywhere can lead a life of dignity and opportunity. We believe the fight against poverty isn’t about charity, but about justice and equality.” At his post in Ireland, David McNair leads a global team of policy advisers following the trends and issues that are the core of ONE’s activities. Central to its mission is hunger, since so many millions are poised perpetually on the brink of starvation, even in the best of times. These suddenly are no longer the best of times. McNair gives us a deeply persuasive argument for change.
ANDELMAN UNLEASHED: Most of your work deals with poverty and a lot of it in Africa, but how broad an area is impacted by the new Russian grain embargo.
DAVID McNAIR: If you look at Russia and Ukraine together, they comprise a third of the world's wheat, 24% of the world's barley, much higher when it comes to sunflower oil at 70%. So I think the immediate countries you're looking are in the Middle East—Egypt, Lebanon; but it descends into sub-Saharan Africa in part because large parts of Africa, particularly North Africa, but also into sub-Saharan Africa, are so dependent on those wheat Imports, and it's not just the immediate cost. It's also almost like a perfect storm that a lot of African countries are facing in terms of the Fed increasing interest rates, their cost of debt increasing, and therefore they have less local currency to pay for imports. It's a confluence of factors affecting the Middle East and North Africa, as well as sub-Saharan Africa quite strongly.
ANDELMAN: Would you hazard a guess as to how many people might be impacted?
McNAIR: It's certainly in the hundreds of millions. If you look at the poorest people, we've done some analysis on the proportion of annual, monthly, and weekly incomes that are spent on food—for the poorest, it's in some cases upwards of 70%. So even marginal increases mean that they either don't spend money on other essential goods or they reduce their consumption.
ANDELMAN: So, how long do you think it'll be before the impact is really felt by most of these targeted individuals or families?
McNAIR: If you look at the international markets, it hasn't been quite as dramatic immediately, as we saw in the follow-up right after the invasion. I think that might be because there are other kinds of additional reserves. But I think over the coming two, three months, you probably are going to see prices increasing in domestic markets quite dramatically, and then the impact will be felt by those poorest people. If you look at statistics on poverty, particularly in Africa, there's 400 million or more living on less than a $1.90 a day. So that I think those are the groups that are going to be most strongly affected.
ANDELMAN: So do you think the impact would be in prices or outright availability or all of that?
McNAIR: With limited availability, then the prices will increase. But the other aspect of this which is really interesting is that after Macky Sall [president of Senegal and the 55-nation African Union] and his delegation went to Sochi trying to unlock a deal, the conclusion they arrived at was we can no longer have this level of dependency on other regions of the world for our basic commodities. It was a similar conclusion to how they dealt with and responded to the Covid pandemic and the inequities in vaccine availability.
They set a target for 60% of Africa's vaccines being produced domestically by 2040 and they are seeking investment in that. So on the food security front, Macky Sall hosted a summit which put together an investment plan, which they are working on with the US government—immediate humanitarian response, but also trying to leverage the investment of US corporations in improving and increasing African productivity and the value-added of African food and production.
ANDELMAN: But that's going to take decades, or at least years certainly, before we see any real results. A lot of people going to be faced with starvation before what is admittedly a first-rate idea can get implemented on the ground. What happens in the interim. What are the alternatives? Are there any replacement sources?
McNAIR: I think that's the real worry—that the immediate response is going to be starvation for many many people, and then the kinds of instability and political ramifications that come with that.
ANDELMAN: So at the same time, resources that should be going into development must now have to be diverted, presumably, simply to make up the shortfall in affordable grain?
McNAIR: I think that's a fair statement because what you're seeing is it's almost like a perfect storm of a debt crisis and the increased cost of grain and energy. What happened during the 2000s with historically low interest rates was that African countries went to Eurobond markets and to China and borrowed a lot of money, which made sense with low interest rates, and they had a massive infrastructure demand. Now, with the Federal Reserve increasing those rates, the costs are increasing and therefore a lot of countries are implementing austerity measures.
On a domestic level, those austerity measures are meaning fewer public services for families, and the burden of those public services are then going to the family level where people have to pay for health costs, out of pocket payments, and food. But then at a country level, countries are prioritizing and trying to resist default, as happened to Kenya in April, when they deferred civil servants’ salaries in order to meet Eurobond payments. At a country level, the domestic currency, where people earn money, is diminishing in value as extra US dollars are being spent on debt service, energy, and food imports. More and more countries are going to face that kind of fiscal crisis. So, to come back to your question, that means less investment in infrastructure, in green energy, in the kinds of things that will insure long-term, economic sustainability.
ANDELMAN: How might Russia be using this as pressure to bring African governments into its orbit, especially where you have the Wagner group in control. In a sense these countries are open to blackmail. Russia claims it has grain resources they can divert to these countries, much of which, of course, was stolen Ukrainian grain. But nevertheless, do you think that they might be using this in some fashion as a bludgeon against some of these countries that might not necessarily have been so vulnerable in the past?
McNAIR: Absolutely. Russia has interests in Africa. There's the significant role Russia plays in the supply of weapons, but you know grain is also being weaponized in this case.
ANDELMAN: There was a Russian-African summit in July in Saint Petersburg. Apparently about half as many countries showed up this year as the last time it was held, which says a lot. But what do you think these nations’ leaders might have been telling the Russians?
Are they just basically paying obeisance to Putin, or are they saying, Vladimir, this is what we need. Come through with it. You've screwed us by starting this embargo again. How are you going to help us? What do you think is the message that they might have been able to get through?
McNAIR: I think different leaders will have different interests and will be pursuing those. But I think what we've seen since the invasion, there was a succession of UN General Assembly votes, and many Europeans in particular were surprised at the number of African countries that abstained in the votes to condemn Russia's actions in Ukraine. I think that was a signal. Many Europeans interpreted that as these African countries that we thought were with us, are no longer with us. I think actually, what was going on is these countries are in a situation where their back is against the wall and they need to identify where they've got leverage. The US awakened to the fact that it neglected Africa for a long time and is also looking at the critical minerals it needs for energy transition. African countries realize this is a point of leverage, and they're trying to figure out how they can play these interests off against one another to get what they need. So, I think what was absolutely happening at this summit was countries saying here's what we need. We've got offers from others; we need support. I'm sure some will be asking for weapons. I'm sure some will be asking for access to grain but also there's energy, fiscal support, all those other issues that are so important.
ANDELMAN: There is kind of a barter system in effect. The Russians and Chinese particularly have been anxious to get their hands on a lot of the mineral resources in Africa, even rarer earth as well as oil, diamonds, and gold. Do you think the West is any in any position to step in and say we will fill this gap and we will not demand that you cough up 400 kilos of diamonds over the next six months?
McNAIR: It's pretty clear that levels of trust particularly for the European Union is very low. I mean, you saw that in [South Africa’s president] Cyril Ramaphosa's comments after the EU-Africa Summit last February.
He said, we welcome European investment. We also welcome investment from other partners. We're not going to be an exclusive partner, and I think the US is actually being a lot more forward-looking with respect to this. Following the US-African leaders' summit [in Washington] last December and what you've seen since then is Janet Yellen [traveling to Africa], and many brokered deals.
The one that comes most to mind is a deal for the processing of copper and cobalt on the border between DRC and Zambia. And I think that shows clearly the US has an interest in these minerals. They also recognize that Zambia and DRC have an interest in the value of producing new battery technology which will create jobs. And I think if there are more examples like that, where major parties are saying we’ll come in, but will help you to industrialize in a Green Way, create jobs, grow your economy, and we both get what we want. You're seeing that more and more with countries like Namibia that have implemented export bans on raw critical minerals because they want those kinds of deals.
ANDELMAN: But the immediate problem is feeding them and getting them grain. Going back, one step, is there enough surplus grain in other parts of the world that could be diverted to Africa to allow the West to play the role Russia is hoping to usurp? Are there are enough resources that could be diverted to sub-Saharan Africa to make up for the grain they’ll not be getting from Ukraine and perhaps remove some of the blackmail potential from Russia?
McNAIR: There two ways of looking at this. One is, can African populations divert to other kinds of grains like maize.
And second, is there a surplus supply, from the US for example. The US Department of Agriculture produces these estimates on a regular basis that are worth watching.
ANDELMAN: Ukraine is trying to get grain out through Poland and some other overland routes. Putin accused the Western nations of receiving the bulk of the deliveries by sea before the blockade was reimposed, while at the same time refusing to lift sanctions on Russia. Putin insisted Moscow would instead move toward a more “just” system of resource distribution itself. I thought that language quite astonishing. But what would be a more “just” system of resource distribution for African nations?
McNAIR: The first point to make that is that Putin has, for a long time, taken up using this language to align himself with the interests of countries in the global South. In one foreign policy speech he made about six months ago he was basically talking about aligned values and all kinds of issues that were pretty striking. So it's not surprising that he's using that language. I have no idea what legal framework you can put in place. But I think from a justice principal looking at those who can't afford these price increases, ensuring adequate supply to minimize those impacts would be the most just thing to do. And if there are people in more advanced countries or richer people in low-income countries that can afford it, for them to pay more because the supply is going to those who are most affected would be a more just outcome.
ANDELMAN: Do you have a sense that fertilizer—so necessary in the agricultural process—is also part of this embargo? And that's also going to be more difficult for African countries to get their hands on, to bolster their their own domestic agricultural output.
McNAIR: If you look at potash, 18% of the global supply comes from Ukraine and Russia. So it is incredibly important, and I know there were some discussions earlier this year about the price increases on International markets, and fertilizer companies creating a kind of ring-fenced supply for Africa to protect it from from those increases. It's a massive issue because it's not just the immediate impact. It's the impact for the next year's harvest, and it turns from a price issue to a long-term supply issue.
ANDELMAN: It is there enough elasticity in markets to allow local producers to ramp up now and develop more sources for the next year? Assuming we can get through this growing season into the next growing season, are there enough land resources to allow some of these countries to actually begin producing the grain they won't be able to get from Russia?
McNAIR: There's massive availability of land in Africa, although climate impacts are strongly felt in the Sahel region for example. It comes down to an individual farmer level—what is commercially viable for them to plant? And if the prices for fertilizer to make those crops viable are increasing then they might just not plant. That has a knock-on supply impact. The domino effects of what's happening here are quite significant.
ANDELMAN: Your organization, One.org, does a lot of lobbying. What kind of lobbying effort could work under these circumstances?
McNAIR: A big part of what we're trying to do is address the fiscal constraints that African economies are facing—the debt impacts, the impacts of increased energy, increased food costs. And one item that's being raised again and again by African leaders like [Kenya president] William Ruto and Macky Sall is the fact that they pay a huge amount of what they call an African premium to borrow money on capital markets. There was a report by the UNDP earlier this year that showed part of the credit ratings by Moody's and Fitch that determine those costs is data-based, part of it is subjective. And if that subjective part of the methodology was “less Idiosyncratic,” I think that’s the word they use, then African companies could pay $70 billion less in interest payments every year. So, there is a question about cost of capital and the way country risk is considered. One of the things that we at One.org are doing is looking at whether countries could, rather than going to Eurobond markets, go to multilateral development banks like the World Bank or the African Development Bank and borrow much cheaper.
ANDELMAN: What's preventing them from doing that?
McNAIR: At the moment, the World Bank in particular is very conservative, with its balance sheet and also very slow in agreeing to deals. One African leader told my boss that if he wants to get a road built, if you ask the Chinese, he'll be driving along it in the time the World Bank might agree to the contract. That's borne out by the data because if you look at the average period, from application to dispersal, over the last five years, it's 465 days. That increases dramatically if you have to have environmental assessments and so on. So the speed issue and the scale issue are something G20 leaders are actually examining at the moment. Larry Summers co-chaired a commission mandated by the G20 which published a report last week looking at the World Bank and other [multi-national lenders] tripling their lending by 2030. That's one of the things that we at One.org are looking at, because unless you address these kinds of structural constraints in Africa's fiscal positions, you're going to have a lack of resilience and a vulnerability to these shocks on an ongoing basis.
ANDELMAN: Now, the Wagner group. Everybody is watching them. Take the coup in Niger. Here's a country that has been very firmly in the in the western camp for years. Wagner would love to get into some of these places—another wedge to get them militarily into a position where they can control the government—it’s in their hip pocket?
McNAIR: Absolutely. I think that's an obvious step, and it's very interesting that this is happening at the same time as the St. Petersburg Russian-African summit, of course.
ANDELMAN: So the countries who’d stayed away from that summit—are those the more pro-Western countries, that are having less concern about the impact of the grain deal? Who do you think came to the summer or who stayed away? Do they fall into any group?
McNAIR: I think the key message from Ramaphosa, from Macky Sall, from William Ruto, or others is that they want to avoid being seen as pawns and a chit in a political game. They have their own interests. They want to represent those interests. They want a fair seat at the table when it comes to decision making over issues that affect them. What you've seen on a number of issues is reflective of that. What you're seeing is that countries that are more vulnerable to either being influenced by Russia or because they absolutely need something from Russia are less likely to take up any kind of position because of their vulnerability.
ANDELMAN: Putin is now pumping to get the African Union into the G20. And he's probably not even going to be able to go himself to the next G20 conference in South Africa since, indicted for war crimes by the International Court of Justice, he’s liable for arrest as soon as he sets foot there. It’s just most ironic that he's campaigning to get the African Union into an organization that he's probably not going to be able to have very much to do with for the foreseeable future.
McNAIR: Still, look at the support for that proposal which originally came from Macky Sall, with support from the US along with China, the European Union, the UK. I think what's more interesting is the dynamic around the BRICS countries.
Right now there are 40 countries that have applied to become members. And I think that, that is a very interesting dynamic because it creates this story about an alternative multilateral system being developed that shares a very different value base from from a NATO western-based value system.
ANDELMAN: Thank you David. This is a most valuable understanding of the stakes involved in a host of north-south and east-west issues.
Excellent piece on all the variables leading to starvation in some of the poorest countries made worse by the Russia/Ukraine conflict. Many people/ countries want to help but negotiations take time while babies die. So very distressing. And we in USA fight like two year olds for greed and power. I am completely disgusted. Don’t mistake my admiration for Biden, however, who will fight to the death for the “little people” the world over who are suffering, getting no credit or acknowledgement for his efforts while the former leader has temper tantrums daily that get attention in the MSM daily. Sickening. Where is compassion; where is the soul of America?