Expert Highlights Russo- Ukrainian War Economic Impacts On Ethiopia

March 1, 2022

Realizing the impact of the ongoing Russo-Ukrainian War in the price of wheat and fuel and its growing business and investment ties with the conflict parties, Ethiopia is expected to devise a new market strategy, an expert in the area said.

Speaking to the Ethiopian Press Agency (EPA), an economist Wasihun Belay noted that the conflict between Russia and Ukraine, which account for 30 percent of the global wheat supply and major fuel suppliers, intensified the price of the commodities. Accordingly, the impact the conflict poses in Ethiopia’s economy cannot be underestimated.

Though Ethiopia does not purchase fuel from Russia, the price increment of fuel on the international market would indirectly affect its economy. Also, the inflation that is caused by the ongoing war would have a negative impact on the economies of the developing countries including Ethiopia.

 Wasihun further stated that Ukraine takes the lion share in supplying about 16 percent of maize to the world market and follows Saudi Arabia in fuel supply. While Ethiopia imports wheat, edible oil and metallic materials from Ukraine, the latter purchase leather and leather items from Ethiopia.

Noting Russia and Ukraine are amongst the top ten trading countries with Ethiopia, he highlighted the war doubled the challenge as it put both the import and export relation at risk. Apart from challenging Ethiopia’s demand for wheat, which is intensified by the current situation, the war also disrupts the humanitarian aid the developed world extends to the country.

Since Ethiopia’s trade and investment relations would be affected by the war, due emphasis should be attached to explore alternate markets that would compensate for the loss. Supporting the peace efforts that aim to resolve the war is also something expected from Ethiopia, the expert remarked.

BY BETELHEM BEDLU