Food prices are rising faster than they should be. Disruptions to food supply chains—caused by conflict, COVID-19 pandemic, and the climate crisis—may have triggered this global surge in prices. But there are clear signs that the situation is being compounded by a lack of competition in our over-concentrated food systems.
Since hitting an all-time high in March 2022, food prices on the international market have steadily declined. Yet all across the world, the prices paid by consumers continue to soar, while many food companies announce record profits. In Europe and North America, questions are beginning to be raised about unfair pricing and greedflation; but in Africa, where competition policy and enforcement is relatively weak, diagnoses of rising prices often focus solely on disrupted supply chains and currency fluctuation.
Stabilizing international trade and reducing reliance on imported food may help ease the suffering of consumers on the continent—sub-Saharan Africa is home to 11 of the 22 hunger hotspots identified by the World Food Programme, and more than 90 percent of the population cannot afford a healthy diet. But there is more that governments can do at national and regional level to keep prices under control.
Earlier this year, Consumers International brought together competition authorities and consumer representatives from across Africa to shed light on the problem. The message was clear. Practices such as price gouging, price fixing and excessive pricing are a very real threat, and the problem is getting worse. Daouda Adam, of the African Union of Consumers, warned that “businesses are taking advantage of this crisis to inflate prices,” and called for “regulatory action to ensure fairness in the market.”
But there are significant barriers to action. The first is the difficulty of generating actionable evidence that prices are not just high, but actively unfair. Data on food prices in many parts of Africa – from farmgate to consumer level—is not as comprehensive or reliable as it needs to be. Where the data does exist, a clear picture emerges: the Centre for Competition, Regulation and Economic Development (CCRED) suggested that prices for certain staples last year were 30-40 percent higher than market conditions would lead us to expect, even during a crisis.
A further barrier is the lack of unified competition legislation, or even an independent authority like in Ghana and Uganda, which can spearhead action against anti-competitive practices. Even where legislation is strong, the capacity of these authorities to implement and enforce necessary measures is often weak—both because of financial resources and political mandate.
To solve this problem, collaboration is key. At the international level, governments can benefit from sharing learnings, and working together to tackle cross-border pricing challenges through regional competition authorities. The African Continental Free Trade Area (AfCFTA) initiative has also helped push governments towards stronger competition legislation, although care must be taken to ensure that the AfCFTA doesn’t allow the largest companies to further expand their market dominance.
Stronger collaboration is also needed between different areas of government—unfair prices should be a topic of concern not just for competition authorities, but for ministries of trade, agriculture, health, and others. Taking action on this issue could also be a source of welcome relief for central governments, facing pressure from the public in light of rising prices.
Collaboration is also needed between stakeholder groups—above all, bringing consumers and smallholder producers into the conversation. To achieve this, existing relationships between competition authorities and consumer organizations must be strengthened.
Consumers International is working with consumer groups and competition authorities across Africa to develop evidence and actions that can help combat unfair food prices—supporting governments to take action and putting the spotlight on those who fail to act. We need to recognize the key role that anti-competitive practices and rapidly rising profits are playing in driving food price inflation—both in Africa and all across the world.
We will only deliver on the universal right to food by strengthening competition at all levels, from local to global, and centering the voices of consumers and small and medium-size farmers as we build shared solutions.
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Photo courtesy of the Kate Holt/AusAID, Wikimedia Commons
