Impact of the Russia–Ukraine war on grain and fertilizer supply: Evidence from Kenya

Abstract

AbstractThis paper examines the impact of the Russia–Ukraine war on grain and fertilizer supply to Kenya as the sixth largest economy in Africa using the Regression Discontinuity estimator on monthly data spanning from January 2017 to August 2022. The share of the quantity and value of cereals and fertilizer imports by Kenya from Russia and Ukraine in the total quantity and value of cereals and fertilizer imports by Kenya from world are utilized. The share of freight and insurance costs on grain and fertilizer imports by Kenya from Russia and Ukraine in total freight and insurance costs on grain and fertilizer from world have also been used. After controlling for sensitivity and incorporating depreciation of the exchange rate and a dummy on drought as covariates, the results indicate the war has had insignificant impact on imports of grain and fertilizer by Kenya though the impact is negative for grain but positive for fertilizer. The findings have policy implications touching on need for African countries to diversify import sources for grain and fertilizer, enhance productive capacities through investment on irrigation, strengthen diplomatic ties with existing import sources for grain and fertilizer, and invest in climate action to tackle drought incidences.