Several countries experienced price spikes in March 2024, as underlying factors, prominently weak currencies, continue to exert inflationary pressure, while the effects of drought on agricultural production in 2024 are expected to be a key source of domestic inflationary pressure, given the weight of foods in many Southern African consumer price indexes. 

In South Africa, prices of white maize grain continued to rise steeply in March 2024, reaching record levels, as markets reacted to the impact of harsh drought conditions on crops. Currently, production forecasts point to a below-average maize harvest in 2024, with a particularly poor outturn expected for the white maize crop. Rainfall deficits have been less intense over yellow maize growing areas and prices of this grain have risen less drastically as a result. Wholesale wheat prices remained firm in March and at lower year-on-year levels, influenced by declining trends in the international market considering the country’s net importing status for wheat. In the net cereal importing countries of Botswana, Eswatini and Namibia, retail prices of maize meal were generally stable in February 2024. However, there are strong upside risks to prices centred around the likely shortfalls in domestic production and the rising prices in South Africa, the countries’ main source of grain supplies. In Malawi, data from March showed a second month-on-month decline in the national average price of maize, albeit a modest fall, as farmers and traders offloaded supplies in preparation for the new harvest. National maize production in 2024 is likely to be below average and resultantly these recent price declines are anticipated to be short-lived. The national average price of maize remained 10 percent higher year‑on‑year in March and was still at a near-record high. In Zambia, prices of maize grain hit new record highs in March and were 71 percent higher year-on-year. Currency weakness continues to play a key role driving up prices, while the drought conditions and the impact on domestic maize production is anticipated to exert strong upward pressure on prices for the remainder of 2024. Correspondingly, there was a 2-percentage point uptick in the food inflation rate in March when it was estimated at 16 percent. In Zimbabwe, between February and March 2024 the annual food inflation rate doubled to 100 percent. The weak currency is underlying the steep price increases, while drought impact on agricultural production is seen to be a major factor that will influence price movements in 2024. Latest price data from Angola shows an increase in the annual food inflation rate as of January 2024. During the same month, the government cut the value‑added tax (VAT) on food from 14 to 5 percent. Whilst the prior removal of fuel subsidies in 2023 is anticipated to still maintain upward price pressure, the VAT removal is foreseen to ease pressure on food prices.