The AfDB’s Warning On Rising Energy and Commodity Prices and the Risk of Social Unrest


The African Development Bank (AfDB) has cautioned about the risk of social unrest in Nigeria, Ethiopia, Angola, and Kenya due to increasing fuel and commodity prices. 

The warning emphasizes the potential impact on these countries, including currency devaluation and economic hardship, and highlights the role of governments and potential solutions. 

The AfDB’s message stresses the urgent need to address rising energy and commodity prices to prevent social and economic crises.

This warning is in line with the Africa Energy Outlook 2022, which emphasizes the importance of transforming Africa’s energy sector for universal access to modern and affordable energy services and a just energy transition.

The AfDB highlighted that internal conflicts and violence could arise from these price increases, attributed to weaker domestic currencies and reforms such as the removal of energy subsidies. 

These factors could disrupt global supply chains and exacerbate energy and food inflation globally, with Africa facing a particularly high risk.

The AfDB’s warning is a response to the global surge in energy and commodity prices, which could lead to social unrest and economic challenges in the mentioned countries.

Rising energy and commodity prices in Nigeria, Ethiopia, Angola, and Kenya are impacting their economies and populations.

The removal of fuel subsidies has led to social unrest, while currency weaknesses and reforms could escalate conflicts. 

Falling commodity prices, especially oil, have hurt Nigeria and Angola’s exports, affecting budgets and leading to job losses across sectors. 

This situation could worsen living costs, stoke inflation, and increase poverty and unemployment, highlighting the need for government intervention and better financial management.

The increasing fuel and commodity prices in Nigeria, Ethiopia, Angola, and Kenya are poised to significantly affect their economies and populations. 

The removal of energy subsidies and currency depreciation have raised living costs and inflation rates. 

This unrest, exemplified by protests in Nigeria, stems from the high cost of living and has also fueled internal conflicts and violence. 

The African Development Bank (AfDB) has cautioned that these conditions may lead to further  political instability, hindering economic growth. 

Additionally, escalating geopolitical tensions in Eastern Europe and the Middle East, along with the El Nino phenomenon, could worsen global energy and food inflation, with Africa particularly vulnerable.

Currency devaluation in Nigeria, Ethiopia, Angola, and Kenya exacerbates economic challenges by increasing inflation and reducing citizens’ purchasing power.

This devaluation makes exports cheaper globally but raises import costs domestically, initially improving trade balance but leading to inflation and reduced competitiveness in domestic industries. 


SkyPower Global and AFC’s Renewable Energy Initiative to power DRC

Furthermore, devaluation may spur speculative behavior and trigger currency devaluation races among neighboring countries, potentially fostering social unrest and political instability.

These include targeted subsidy programs to help vulnerable populations afford essential goods, adjusting fiscal policies to stabilize prices, and accelerating investment in renewable energy sources. 

Strengthening social safety nets and engaging in international cooperation to stabilize markets and promote sustainable development are also key strategies.

Governments can address rising energy and commodity prices by diversifying energy sources with renewables and enhancing social safety nets. 

They can also invest in agriculture and implement fiscal and monetary policies to manage inflation.

Engaging in international cooperation is crucial for stabilizing markets and promoting sustainable development.

The African Development Bank (AfDB) has cautioned about the potential for social unrest stemming from escalating energy and commodity prices, amidst a backdrop of global economic difficulties.

The Russian invasion of Ukraine has triggered sharp increases in food, energy, and commodity prices, further burdening African economies already affected by the Covid-19 pandemic.

These global developments compound the challenges faced by African nations, worsening energy and food inflation globally, and particularly impacting Africa.

Leave a Reply

Your email address will not be published. Required fields are marked *