War-induced hikes in the prices of a range of commodities are benefiting a number of African bulk exporters.Supply disruptions as a result of the Russian invasion of Ukraine have seen the prices of oil, wheat, maize, coal, nickel, palladium and aluminum increase significantly since the Russian forces crossed the border on February 24.According to Charné Hollands, the deputy editor at Energy Capital & Power, African producers are coming under pressure to pump more oil as sanctions against Russia are intensified.Angola is the continent’s biggest oil producer, followed by Nigeria, Algeria and Libya.Brent Crude prices have, however, dropped by 30% since their highs earlier in 2022, instead of continuing to rise as forecasters had predicted. Africa’s gas producers, which include Algeria, Libya and Nigeria, are well positioned to fill the gap left by Russian gas exports to Europe, according to a United Nations Development Programme study on the impact of the war on African countries.However, it adds “for Africa's hydrocarbon exporters, the increase in oil prices is both a gain and a loss. While exports, foreign exchange earnings/reserves, and government revenue are likely to increase, this could be offset by the increased cost of refined petroleum imports – emphasising the urgency in value addition and industrialisation on the continent”.One of the beneficiaries has been the mineral-rich Democratic Republic of Congo (DRC).According to an annual assessment by IMF staff published in July, growth in the DRC sharply rebounded from 1.7% in 2020 to an estimated 6.2% in 2021, well above the 4.5% rate in sub-Saharan Africa. The strong recovery was driven by the country’s mining and services sector performance.The African Economic Outlook describes the economic outlook for the DRC as “encouraging despite the Russia–Ukraine conf lict, with GDP growth in 2022–23 reaching 6.4%, driven by mining and recovery of non- extractives.“Improvements to transport and logistical infrastructure are set to support resumption of non-extractive activities, services, and industries, stimulating export and tax revenue,” it states.South African maize producers are also reaping benefits from the war, corn prices having increased by 11.96% ($70.96 per bushel) since the beginning of 2022.However, they are faced with increased input costs.South African miners have been hamstrung by the regression in Transnet capabilities in the ports and rail. Coal is trading at near-record levels, with RMB Morgan Stanley estimating that Transnet’s inability to reach the 2017 level of 80 million tons a year stands to cost the country R15bn in taxes alone. South Africa is not alone in lacking the infrastructure or means to benefit from growing demand for bulk commodities.The United Nations Development Program (UNDP) forecasts that African exports will grow by 4.1% in 2022, as opposed to 8.3% if the war had not broken out.
