In the image
Refugees wait to collect food at a center in Kakuma camps [WFP].
Prior to the "special military operation" of the Russian Federation which began in February 2022, Ukraine accounted for 9.5% of total wheat exports worldwide. According to the World Food Program (WFP) the grain produced in Ukraine supplied a total of 400,000 million people, some of them in situations of risk. The war has limited this supply, seriously affecting the Horn of Africa.
The Black Sea Grain Deal: Reasons and relevance of the withdrawal
In order to mitigate the negative effects on the reduction of exports derived from the war, on July 22, 2022, the "Initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian ports" was signed at the Dolmabahçe Palace (Istanbul). This agreement was considered by UN Secretary-General Antonio Guterres as "a beacon of hope". The initiative mainly allowed safe passage through the Bosphorus of food and fertilizer trade leaving the three main ports that Ukraine still retains de facto on the Black Sea (Odessa, Chornomorsk and Yuzhny/Pivdennyi).
The agents involved in this agreement, proposed by Guterres, were Turkey, Russia, and Ukraine. Since the signing of the agreement, 32.9 million metric tons of grain left the Black Sea. Although the largest tonnage of food arrived in China, Europe, or Turkey, some of the states that benefited the most from the agreement were located in East Africa. For example, among them Sudan (95,340 tons), Ethiopia (282,767), Djibouti (6,741), Somalia (53,500) and Kenya (437,513). According to "Action Against Hunger", Kenya, Ethiopia, Somalia, and Sudan are critical hunger hotspots.
On July 17, 2023, Russia announced that it was withdrawing from the grain initiative alleging that the other parties had not fulfilled their commitments. The main commitment not respected, according to Russia, was the failure to lift sanctions on exports of Russian products clearly enough to provide guarantees of legal certainty for Russian ships carrying food products. There are also other allegedly unfulfilled demands such as the resumption of the supply of spare parts and agricultural machinery, as well as resuming the working of the Togliatti-Odessa Ammonia pipeline and the unblocking of the assets and bank accounts of companies that have some relationship with the Russian agricultural sector.
For all these reasons, President Vladimir Putin had already threatened on previous occasions not to renew the agreement. Following this, Russia attacked the grain facilities in Odessa and threatened that any ship sailing in the waters near Ukraine could be considered as a legitimate military target. According to Dmytro Kuleba, Ukraine's Foreign minister, "Russia has been slowly killing the grain initiative, from one extension to another."
The case of Kenya is interesting to analyze, not only because of the internal situation of the country, whose cost of living and debt are already very high, which led to violent protests in July, but also because Kenya is a recipient of migrants from other states in Africa that would also be severely affected.
Implications for the stability in the region
First of all, it is necessary to understand that the Russian withdrawal from the agreement could seriously affect a good part of East Africa, which, prior to the announcement of said withdrawal, was in a climatic crisis derived from the drought that has occurred in the region. As the UN Refugee Agency (UNHCR) indicates, "Even in the rainy season, in the Horn of Africa it has not rained for six consecutive years; as a result, displacement continues to increase, with millions of people in Ethiopia, Kenya and Somalia struggling to survive famine, insecurity, conflict and water scarcity."
Apart from the climate crisis, there are also the armed conflicts in the region. The most significant cases arethose of Sudan and Somalia. In the case of Sudan, the battle that broke out on April 15 between forces loyal to opposing generals Abdel Fattah Al Burhan and Mohamed Hamdan Dagalo is anticipated to cause between 2 and 2.5 million additional people to experience severe hunger in the coming months, according to an alert from the World Food Program (WFP). Morevoer, inflation will have a negative effect on the region; before the end of the grain agreement, it was expected that the increase in inflation would be 25%, now an expected 3% would have to be added due to the war.
Therefore, although the case of Kenya has certain peculiarities of its own, the grain shortage poses a generic threat to an already politically unstable region. Kenya is precisely a huge recipient of refugees for this reason. According to UNCHR the majority (53%) of refugees and asylum seekers in Kenya are from Somalia. South Sudanese (25%) Congolese (10%), and Ethiopians (5.6%) are the other three biggest nationalities. 6.9% of all people are people of concern from other nationalities, such as Sudan, Rwanda, Eritrea, Burundi, Uganda, and others. Also, the UNCHR stated that:
"We've all felt the impact of the global economic downturn and shockwaves of the war in Ukraine. But it is being felt in full force across the Horn of Africa, depleting its food supply and causing food prices to rise month on month. Conflict, drought and climate change have made food insecurity worse across the region and families are being forced to flee."
This is why the wheat shortage can be expected to lead to an increase in refugees traveling to Kenya, especially from Somalia.
Additional pressure towards Kenya's debt crisis and political tensions
As Kenya's debt crisis mounts, protesters took to the streets in July to denounce the elimination of subsidies and rising taxes. These protests were rallied by the opposition parties, including that of former presidential candidate Raila Odinga. Those who support Odinga think the election last year was rigged against him, which makes them skeptical of the administration of President William Ruto. At least 20 protesters died, and hundreds were injured as a result of the police's violent response to the demonstrations.
Under the new taxes Ruto administration imposed in June (main reason for the protests), persons earning more than 500,000 Ksh (3,200€) would now pay 32.5% in taxes, while those earning more than 800,000 ksh (5,120€) will pay 35%. Some Kenyan citizens would now have to fork over roughly 40% of their income due to the additional burden, which also includes new home taxes of 1.5% and medical insurance taxes of 2.5%. The justification that Ruto has given for the tax hike is that it is the only way to reduce borrowing, taking into account that Kenya has been classified by the World Bank as having high risk of debt distress.
According to the Kenyan Parliament, "As of January 2023, the public debt stock amounted to Kshs. 9.182 trillion. At the current level, debt stock accounts for 92 percent of the Kshs. 10 trillion Debt Limit and is estimated to have a Present Value of Public Debt to GDP ratio of 62 percent against a threshold of 55 percent." Despite that, the World Bank has stated that Ruto's tax increase will be counterproductive as the proposed tax increases in the Finance Bill 2023 will have a detrimental impact on families' buying power over the medium term. Also, because value-added taxes (VAT) and income taxes, which presently make up approximately 76% of all regular revenues in the nation, will generate less money for the government if domestic demand slows down.
Therefore, Kenya is already suffering a wave of political tensions derived from the cost of living. The estimated prediction was that the price of food would increase a 3% due to the withdrawal of Russia from the grain agreement. Therefore, the cost of living may suffer an increase due to this and therefore the tensions between Ruto and the opposition will grow. Above all because Kenya relies heavily on imported wheat and maize to meet its domestic demand, and any disruption or increase in prices could have serious implications for its food security and economy, something buttressed by Korir Sing'Oei, top civil servant in Kenya's Foreign Affairs Ministry, who stated that "The decision by Russia to exit the Black Sea Grain Initiative is a stab on [sic] the back at global food security prices and disproportionately impacts countries in the Horn of Africa already impacted by drought."
Market diversification through trade deals
Taking into account the possible effects that the shortage of wheat supply will have for Kenya, it is interesting to consider what the country is doing to mitigate the negative effects of the Russian withdrawal from the agreement. The diversification of suppliers seems the most important measure. Before Russia pulling out from the Grain Deal, Kenya established diverse commercial agreements involving other international agents. One of them was the European Union, which is Kenya's second largest trading partner. Both have negotiated the Economic Partnership Agreement (EPA) whose objective is to liberalize trade between the EU and Kenya. In that way, Kenya may gain from provisions that take into account its needs for growth, such as unique protections for agriculture, measures to ensure food security, and protection for emerging industries. In addition, the European Union is working with Ukraine to create other potential "solidarity routes" to export Ukrainian grain. For example, through the Danube, which flows into the Black Sea. However, the logistics are very difficult.
Kenya is now also accelerating the negotiations of the Strategic Trade and Investment Partnership(STIP) with the US. The major aspect which differentiates the American STIP from the European EPA, is that the US has decided to negotiate without considering tariff agreements due to the concerns among private sector and civil society members.
Apart from this, Kenya has sought other agreements. One of the most significant ones would be the one it has subscribed with Iran. The Iranian President Ebrahim Raisi met with President Ruto in Nairobi on 12th July during a three-country tour of Africa. The governments of Iran and Kenya announced the signing of five memorandums of understanding pertaining to information technology, fisheries, animal products, and investment development.
It should be noted that Russia has also proposed solutions. According to Vladimir Putin, grain production in Russia is higher than in Ukraine. In that regard, during a summit between Russia and various states, Putinwantedto project Russia as an agent that brings stability to Africa by offering food supplies. He specifically said: "In the next 3-4 months we will be ready to supply Burkina Faso, Zimbabwe, Mali, Somalia, the Central African Republic and Eritrea free of charge between 25,000 and 50,000 tons of cereals." Interestingly, Russia has a direct stake in some of these countries through the presence of units of the Wagner group.
In the long term, however, this option would not be viable for Kenya, a state that has advocated ending the conflict. The main reason is because it could enter into a dependent relationship with Russia, whose real objective of this new agreement is to regain influence and support in Africa. However, it is true that this could help Kenya positively, since it would help reduce hunger in Somalia and therefore lessen the impact on the increase in refugees.
Conclusion
In conclusion it can be said that the withdrawal of Russia from the initiative for the export of grain in Ukraine will have negative consequences for the entire East African area. Above all, it affects a region that is already undergoing serious problems due to climate change, that is affecting crops. On the other hand, this can cause hunger to spread even more with people who are in conflict zones.
In the specific case of Kenya, this could mean receiving more refugees, especially from the Horn of Africa. Kenya is in a moment of political tensions derived from the increase in the cost of living and the shortage of grain could increase these tensions. It is true that Kenya has sought to diversify its imports, but this may not be enough. On the other hand, if Kenya accepts the Russian offer, it could fall into a situation of dependency, although it is true that said offer will help reduce the negative effects in the Horn of Africa, which will benefit Kenya.