Ghana, Côte d’Ivoire’s export sectors face heightened risks due to El l Niño – Fitch Solutions
According to the UK-based firm, lower rainfall and higher temperatures during key pod-development stages could reduce yields, thereby weighing on export earnings, government revenues and rural incomes.
Ghana and Côte d’Ivoire, both major exporters, are facing increased risks to their export sectors due to the impact of El Niño, a weather phenomenon that could significantly affect their agriculture and overall economy. The UK-based economic analysis firm Fitch Solutions has issued a warning that lower rainfall and increased temperatures during the critical pod-development stages of the October-December cocoa crop could lead to reduced yields, subsequently impacting export earnings, government revenues, and rural incomes.
The firm warns that extreme weather conditions could disrupt crop cycles, elevate food prices, strain hydropower generation, and increase the risk of social unrest. In terms of food security, the report emphasizes that rice imports are a significant part of the diets in many countries, including Senegal (69%), Côte d’Ivoire (49%), and Ghana (47%), thereby making these nations particularly susceptible to any changes in global rice supplies driven by El Niño.
The report also highlights that Sub-Saharan Africa, as a whole, is facing multiple risks from El Niño. In East Africa, for instance, the phenomenon is typically linked with stronger October-December short rains, which could result in flooding, crop damage, disease outbreaks, and transportation issues. Fitch Solutions incorporates this information into its Environmental Sustainability and Governance (ESG) Country Risk data, detailing the proportion of the population exposed to flooding risks.
The firm also notes that many East African economies heavily rely on global wheat prices due to high import dependency. Should there be a sustained rise in global grain prices due to ongoing issues in the Black Sea region, this could exacerbate inflationary pressures, even if domestic harvests are positively affected by the stronger rainfall.
In terms of commodities, exporting nations face an added risk due to potential price reductions, which would diminish export earnings, fiscal revenues, and foreign exchange inflows. While Fitch Solutions anticipates a drop in copper and gold prices, there is a risk of weaker prices than anticipated, especially if the US and Iran continue to engage in a preliminary agreement, and the Federal Reserve raises interest rates despite positive developments.
Written by urgent.news from MyJoyOnline Ghana's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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