Equity Bank Group Managing Director and CEO Dr. James Mwangi has warned that Africa’s food security is at risk due to the recent decline in fertilizer supply.
In an interview with Devex at the World Bank and IMF Spring Meetings, Mwangi noted that households and businesses, especially in agriculture, were facing higher input costs.
He added that Kenyans are currently facing challenges in fertilizer acquisition due to high energy costs resulting from supply disruptions caused by the conflict in the Middle East.
According to Mwangi, the fuel price increases faced a less serious effect than the fertilizer supply disruption will have in the future.
Mwangi argued that fertilizer disruption will degrade the quality of agricultural soil, thereby reducing the quality of the produce.
“This year, maybe the soils will still produce. Next year, the soils will not the capable of sustaining production. By the third year, food insecurity will be a major concern,” Mwangi cautioned.
Additionally, the CEO stated that multiple harvests across multiple seasons would be affected as domestic inflationary pressure surges.
Further, he added that the Africa’s food systems are entering a fragile phase, with the cumulative shocks that could converge into a broader crisis.
Also Read: Kenya Among Nations Facing Fertilizer Crisis as Hormuz Disruption Hits Supply
Effects of Energy Shocks Across the Kenyan Economy
According to Mwangi, energy is essential for production, and any constriction in the energy results in production constraints.
Consequently, production affects the markets and employment at large, leading to financial instability in a country.
In addition, Mwangi cautioned about the declining aid level due to the shifting in global development financing affecting emerging markets’ funding.
James Mwangi requested that traditional development finance institutions act as catalysts rather than as primary funders.
“The money for the World Bank, IMF, [and IFC] is not sufficient to fund development. But it’s sufficient to act as a catalyst,” Mwangi commented.
Further, he added that private capital outweighs sovereign resources, noting that global market capitalization exceeds the combined GDP of many national economies.
Also Read: Farmers in Kenya Warned After 250 Bags of Fake Fertilizer Seized
Equity Bank Recovery Plan
To bridge the financing gap, as with most private-sector-led models, the bank has established the Equity Group’s Africa Recovery and Resilience Plan.
The plan aims to channel investments into sectors such as agriculture, manufacturing, and trade through ecosystem-based financing.
Ecosystem-based financing will ensure that the country maintains a stable and resilient economy despite the global economic challenge, according to Mwangi.
Despite the establishment of recovery measures by the private sector, Mwangi argued that an end to the ongoing war would not rebuild the disrupted supply chains immediately.
Rebuilding the Kenyan infrastructure would take approximately three to five years, as the current damage is extreme.
James Mwangi has called for alignment between global financial institutions and the private sector to prevent a decline in food security across the continent.
