Substantial flooding, renewed regional conflict incidents, and persistent economic dysfunction are driving acute food insecurity in areas controlled by the Houthi rebels and the internationally recognized government (IRG), according to a recent analysis published by the Famine Early Warning Systems Network (FEWS NET)
Heavy rainfall during the second rainy season (July-October) has led to widespread damage to infrastructure and an increase in cholera outbreaks, with internally displaced persons (IDPs) the worst affected.
Economic fragility persists countrywide, with a local currency shortage and internal political tensions overshadowing recent economic reforms in IRG-controlled areas, specifically.
FEWS NET analysis anticipates that 50-55 percent of Yemen’s population will continue to face moderate to severe food consumption gaps.
The situation is further complicated by the presence of landmines and other unexploded and abandoned remnants of war that have been dislodged by the floodwaters. These weapons pose a threat to lives and livelihoods, especially livestock and honeybee owners seeking to capitalize on improved pasture conditions following the floods.
FEWS NET analysis found that there are also reports that the floods unearthed unexploded ordnance in residential areas of the Harib district in Ma’rib Governorate, creating life-threatening hazards for the local civilian population.
In IRG-controlled areas, the recent economic reforms and measures implemented by the Central Bank of Yemen’s Aden branch (CBY-Aden) have led to a significant recovery of the local currency (YER), which has increased in value by approximately 43 percent since early August compared to July.
The most immediate impact has been a 30 percent decline in the average cost of the minimum food basket (MFB) in Aden (the main reference market for IRG areas) from July to August and a six percent decline compared to August of last year.
FEWS NET analysis concluded that while the recent economic reforms have improved the value of the Aden-based YER, the overall stability of the YER remains fragile due to the ongoing Houthi rebels’ blockade of IRG oil export revenue and unresolved monetary policy issues.
On September 20, Saudi Arabia announced a new financial grant of 1.38 billion SAR (approximately 368 million USD) to the IRG in Aden, delivered through the Saudi Development and Reconstruction Program for Yemen. The grant aims to bolster the government's budget, provide urgent resources to CBY-Aden, and provide economic stability to the IRG as it struggles under a substantial budget deficit (primarily due to the suspension of oil exports in 2022). Based on past infusions of monetary support, it is likely that the grant will provide temporary relief to the public budget and allow the government to fulfill its urgent fiscal responsibilities, including paying civil servant salaries and purchasing fuel for power stations. However, it is unlikely to contribute to economic stability, including further currency appreciation, given the lack of IRG control over the economic cycle and the limited impact of the grant on macroeconomic fundamentals.