El Niño heating up inflation
El Niño’s impact on agricultural production raises concerns over food price inflation and economic stability across Africa, particularly in the east and the south of the continent.
The intensifying El Niño weather event is projected to be the worst on record. This phenomenon, combined with the Subtropical Indian Ocean Dipole, poses severe risks to agricultural output, livelihoods, external balances, and energy markets.
Food carries a substantial weight in many African CPI baskets, exceeding 50% in Ethiopia and Zambia. As a result, rising food prices could have a greater inflationary effect than this year’s oil shock. Most major African markets are expected to see higher inflation in 2027 than in 2026.
Encouragingly, numerous countries across sub-Saharan Africa have already tabled disaster preparedness and response strategies encompassing physical strategic food reserves and emergency financing options.
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