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Portuguese Exports to PALOP Countries Increased 33.8% Up to September Due to Inflation

Portuguese Exports to PALOP Countries Increased 33.8% Up to September Due to Inflation

Portuguese exports to PALOP countries rose 33.8 percent in total between January and September this year compared to the same period in 2021, highlighting the doubling of prices per kilo of fertilisers and the 22 percent increase in cereals.
According to data collected by Lusa from the National Institute of Statistics, sales of Portuguese products to Portuguese-speaking African Countries (PALOP) rose 33.8 percent per kilo of goods sold, with total revenue increasing from 1.1 billion euros from January to September 2021 to 1.6 billion in the same period this year.

The data was obtained by dividing total sales revenue by the number of kilos sold, giving an arithmetic average on the rise in sales prices of Portuguese products, which is particularly expressive in the case of fertilisers, whose price more than doubled, recording a rise of 104.7 percent.

African countries have faced a general rise in inflation following the rise in energy and food prices, but also fertilisers and cereals, essential for the main economic activity in sub-Saharan Africa, agriculture, on which many families depend to ensure subsistence.

“Sub-Saharan African countries are facing another exogenous and severe shock, with rising energy and food prices threatening the continent’s economic evolution,” wrote the director of the International Monetary Fund’s economic department, Abebe Aemro Selassie.

He said “this latest setback could not have come at a worse time, when growth was beginning to recover and policy makers were dealing with the economic and social impact of the covid-19 pandemic.

Average food prices in sub-Saharan Africa had already risen 19% last year, with countries’ reliance on a small number of imports weighing further on the budget, such as for fertilisers and cereals, which are key to ensuring good agricultural harvests.

In the PALOP countries, the price of fish and dairy products imported from Portugal rose by over 20 percent, making consumer choice even more difficult and contributing to a generalised rise in interest rates to balance inflation, with the exception of Angola, the only country that has lowered reference interest rates, but which has the highest inflation among Portuguese-speaking countries.

“The central banks of 11 African nations are expected to raise rates by the end of the year to combat high inflation and support their currencies,” the Bloomberg financial information agency wrote, pointing to Mozambique and Botswana as two examples of countries where inflation is slowing and therefore the rate should be maintained, while Angola “will likely remain the exception in a context of global monetary tightening, and should cut interest rates for the second time this year” at the central bank’s meeting in December.

Nigeria, Africa’s largest economy, is seeing inflation rise to close to 20%, well above the target of between 6 and 9%, while Angola is on a downward trend, with the rate falling from over 20% in the middle of the year to around 16% currently.

Ghana, one of the countries most affected by the cut in grain and fertiliser imports from Russia and Ukraine, faces a price rise of more than 40%, while Mozambique is dealing with an 11% increase, just below the 13% recorded in Botswana, a country south of Angola and Mozambique.

The rise in prices of basic foodstuffs and the deterioration of the general economic situation in sub-Saharan Africa has already led international financial institutions to create specific aid mechanisms: the IMF has set up a line of financing for countries experiencing food shocks, and the African Development Bank has launched $1.5 billion in financing to boost emergency food production on the continent.

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