El Niño raises risks for exports of Ghana and Côte d’Ivoire — Fitch Solutions
In Ghana and Côte d’Ivoire, the cocoa crop development period from October to December nearly coincides with the expected peak of the El Niño phenomenon, increasing risks for their export sectors. This is stated in an assessment by Fitch Solutions, reports MyJoyOnline.
Risks to the cocoa harvest
According to the British company, lower rainfall and higher temperatures at key stages of cocoa fruit development could reduce yields. This, in turn, could affect export revenues, budget income and the earnings of rural populations in Ghana and Côte d’Ivoire.
Very strong manifestations of El Niño, according to Fitch Solutions, could also disrupt crop-growing cycles, accelerate food inflation, strain hydropower generation and increase the risks of social tensions.
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Dependence on rice imports
The company drew attention to the vulnerability of a number of countries in the region to a reduction in global rice supply linked to El Niño. The share of imported rice in consumption stands at 69% in Senegal, 49% in Côte d’Ivoire and 47% in Ghana.
Other risks for Africa
In East Africa, El Niño is usually associated with heavier short rains from October to December. Fitch Solutions notes that this could cause flooding, crop damage, disease outbreaks and transport disruptions. At the same time, the dependence of many East African economies on wheat imports makes them sensitive to rising global grain prices amid prolonged disruptions in the Black Sea region.
Economies dependent on commodity exports could also incur losses if commodity prices decline, as this reduces export income, budget revenues and foreign currency inflows. Fitch Solutions named copper and gold exporters as particularly vulnerable to tighter US monetary policy.
