/ 25 February 2008

Floods derail growth

As Southern Africa braces for cyclones and more heavy rains, economic analysts warn that the floods already engulfing the region are likely to impact badly on inflation and other fundamental economic indicators. "Naturally, the floods will have an effect," says Oliver Saasa, a consultant economics professor at the University of Zambia.

As Southern Africa braces for cyclones and more heavy rains, economic analysts warn that the floods already engulfing the region are likely to impact badly on inflation and other fundamental economic indicators.

“Naturally, the floods will have an effect,” says Oliver Saasa, a consultant economics professor at the University of Zambia.

He says the floods have affected productivity levels in key sectors, such as mining and agriculture, and could trigger higher prices for basic commodities across the region.

“Once productivity is derailed, especially in agriculture, there is the likelihood that food security will be threatened and this will negate inflation targets for this year.”

Despite being hardest hit by the HIV/Aids pandemic and chronic poverty, most countries in Southern Africa have in recent years recorded steady annual economic growth of varying levels.

Zambia, for instance, has in the past five years registered an annual growth rate of 5%, seen the cutting of its inflation to single digits after more than three decades of double-digit inflation and the kwacha has appreciated against foreign currencies on the back of strong investment in the country’s mining and manufacturing sectors.

The country also recorded a surplus harvest of its staple crop, maize. Last year a large part of the crop was exported to neighbouring Zimbabwe, Democratic Republic of Congo, Tanzania and South Africa.

But the floods are sinking hopes of another bumper harvest, as heavy rains continue to pound the agricultural rich regions of the country.

“Agriculture is the mainstay of every growing economy and … the majority of Zambians. Any disturbance in production is expected to adversely affect the population at large,” says Guy Robinson, president of the Zambia National Farmers’ Union.

“At this stage it is too early to assess the exact damage to crops, since some areas are still flooded and inaccessible, but our crop harvest will definitely be affected because some farmers, including large-scale farmers, have had their crops extensively damaged.”

Thousands of people have been displaced, agricultural land submerged and livestock lost in torrential rains, which have struck Mozambique, Zimbabwe, Malawi and Zambia since October last year.

A recent report by the United Nations Office for the Coordination of Humanitarian Affairs (Ocha) says flooding remains a major concern in the region, with river levels continuing to rise above seasonal averages almost everywhere.

Ocha’s report pegged the number of people in immediate need of humanitarian assistance as a result of the floods at more than 449 000 across the region and predicted that continuous rains could put a further 805 000 people at risk.

The rainfall season in most of Southern Africa stretches from October to March but peaks in late February. A recent forecast for the period January to March 2008 issued by the Southern African Development Community (SADC) Drought Monitoring Centre warned of heavy rainfall across most parts of the mainland SADC region and Madagascar.

The Zambian and Zimbabwean governments opened the spill-way gate of the Kariba North bank dam last week to reduce the rising water levels to prevent the banks of the world’s largest man-made lake from bursting. Both governments have since placed military forces on flood alert after opening the floodgate for the first time in three years. Opening the floodgate also might force Mozambique to evacuate at least 100 000 people.

People living in the flooded areas are already bearing the brunt of inflated prices.

Chief Sinazongwe, a traditional leader in southern Zambia, says the prices of most commodities have more than doubled since the floods washed away a bridge, swamped crops and disrupted operations at Mamba, Zambia’s only coal mine, in December last year.

“Life is very difficult for my people; my people are suffering very much,” Sinazongwe says. “Many areas are still flooded and completely cut off from the rest of the country, so what is happening in these areas is that people who are managing to transport some goods by boats are selling them at very high prices.”

For example, “a 25kg bag of mealie meal, which was previously selling for 40 000 kwacha [about R80] now costs up to 80 000 kwacha, a 750ml bottle of cooking oil was selling for 5 000 kwacha but is now selling for between 10 000 and 15 000 kwacha”.