Wednesday, November 6, 2024

It is the poorest who will once again bear the brunt of rising food prices!

All indications are that by mid year, the international crude oil prices will have reached the $100 mark a barrel.

Not only should this reignite a chilling reminder of the unbearable economic burdens of three years ago, but should cause us worry that the effects of high oil prices are most likely to wipe away whatever little recovery the economy had achieved thus far.

As we witnessed three years ago, high oil prices severely disrupt economic production.
As a net importer, Botswana is absolutely helpless against such vagaries.

The only thing our Government can do is track and tail the price and hopefully implement the changes in line with what happens in the international market.

When crude prices were at their highest peak a few years ago, the economy of Botswana literally shed jobs.

Many companies closed down as they could not cope with a spike in the price of inputs.
Literally everything rose and we were told it was so because everything directly relied on the price of oil.

For Botswana, it has since become a double whammy in that just as oil prices came down, it coincided with what has since been the worst economic downturn since the Great Depression of 1929.

It is not an exaggeration to say that for many countries, from the time when international oil prices were at their highest until now the economy has performed well below optimal levels.

Because oil prices and economic performance are intertwined it therefore means that during all that time for many people, especially the poor, just getting by has remained a real struggle.

One area that has been of particular concern is the food prices.

Prices of basic food items, including staples like sorghum, rice, bread and wheat reached fever peach during a time when oil prices were at the highest.

As we recall all of a sudden everything was blamed on oil prices.

Our memories are still fresh with scenes of riots across the globe ÔÇô especially in Asia and Africa – when because they could not absorb the rising food prices people got frustrated and vented their anger through violence.

While there were no food riots in Botswana, it would be crazy to say that Batswana did not feel the pinch.

The same pain we felt then is what we should once again brace for in the next coming months.
Only this time it would be much worse because, for many people, there has never really been a time of recovery.

For many of our people, the cycle of depression has never at any point been broken.

While we openly acknowledge that there is not much that the Government of Botswana can do to mitigate rising international oil prices, we want to point out that certainly the Government can do something to fight what seems to have all the hallmarks of collusion and price fixing by chain stores that do business in this country.

In that respect, we call not just for the operationalisation of the Competition Law, but also for a thorough investigation into suspicions of collusion among these chain stores.

It is the poorest people who are economically most vulnerable who suffer the most when these things happen.

As oil prices look certain to hit the $100 mark, we can say with utmost certainty that once again it is the poor who are going to be the hardest hit.

On another note, we want to say it still remains a mystery why, on their part, chain stores are allowed to raise their food prices on account of rising oil prices, but are never forced to reduce the same when oil prices collapse.

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