Africa In The News

DRC conflict pushes commodity prices, inflation up

KINSHASA – INFLATION is rising while food and livestock prices
are at high levels driven by limited supplies and ongoing conflict in the
Democratic Republic of Congo (DRC).

Warfare continues to disrupt markets.

The country, which geographically is in Central Africa but is a member of
the Southern Africa Development Community, is facing a myriad of crises
that is impacting on neighbouring countries where thousands have fled.

Inflation rates are forecasted to slightly increase as 2017 draws to a close.

In 2016, inflation rates are estimated to have slightly increased to 1,7
percent due to a relatively strong economic growth and a loosening fiscal
policy which boosted domestic demand.

In 2017, inflation rates are forecast to continue to grow to about 2,7
percent.

Franc, the local currency has depreciated significantly against the United
States dollar (1Franc = US$0,00063) over the past months, resulting in
more expensive and reduced imports from neighbouring countries and
consequent significant upward pressure on domestic food supplies and
prices.

This contributed to the decline in the purchasing power of poor
households, according to the Food and Agricultural Organisation (FAO).

As of November 2017, the Congolese franc has depreciated by about 36
percent compared to November 2016.

There has been an upward trend in food prices in recent months caused by
the ongoing conflict in the Kasai and the Tanganyika regions, which
continue to disrupt markets for food and livestock.

Countrywide, cereal prices are generally high driven by the limited
supplies, FAO said.

In the Tanganyika, in the last six months, there has been a surge of
dependence on cross-border flows from the United Republic of Tanzania,
resulting in almost doubling the local prices of maize and cassava.

FAO lamented the food security situation continued to sharply deteriorate
due to persisting civil conflict.

The escalation of the civil conflict since 2013, especially in eastern and
southern provinces, severely disrupted local livelihood systems and caused
massive population displacements.

Since September 2016, the Kasai Region is facing a major humanitarian
crisis and the conflict has caused the displacement of about 1,4 million
people.

In total, some 4 million people are displaced in the country.

– CAJ News

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