Provision of public services to worsen in IRG areas, driving civil unrest

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In Yemen, improvements in purchasing power in many areas over the past year have likely helped households compensate for humanitarian food assistance cuts. However, food prices remain above the five-year average and income-earning opportunities remain highly limited. Given this and limited access to credit, millions of poor households likely continue to face food consumption gaps and Crisis (IPC Phase 3) or worse outcomes. In the coming months, some improvement in food security is expected in areas controlled by the Sana’a-based authorities (SBA) while deterioration is expected in areas controlled by the internationally-recognized government (IRG) alongside expectations for trends in economic conditions. Overall, however, Crisis (IPC Phase 3) and Crisis! (IPC Phase 3!) outcomes are expected to persist at the governorate level through at least January 2024.
Due to worsening revenue shortages, the IRG has become increasingly unable to provide essential services. In July, Aden faced prolonged electricity blackouts of around 16 hours per day amid diesel shortages that forced cuts to electricity production. Private power companies are also reportedly threatening to shut down their generators if the government does not pay them imminently. Similarly, the IRG has similarly become increasingly unable to pay public sector salaries, with the military sector worst-affected by additional delays in payment. The deteriorating situation has led to protests in Aden, Lahj, and Hadhramaut in July. Though some emergency supplies of diesel have reached Aden, the situation is expected to worsen overall in the coming months, with increasing levels of civil unrest expected.
The WFP continues to target around 13 million people with humanitarian food assistance per 45-day programmatic cycle as of July, though key informants report that distributions are still occurring approximately once every eight weeks in at least some areas. Meanwhile, funding shortfalls continue to threaten the sustainability of the cash assistance pipeline. As of the start of the fourth distribution cycle in mid-June, 900,000 beneficiaries had been shifted from cash to in-kind benefits. Research suggests that Yemeni beneficiaries are generally less satisfied with in-kind food due to challenges in accessing distribution centers, low quality and diversity of the food rations, and market distortions resulting from the selling of rations at below-market prices. In-kind assistance is also more costly and raises the risk of mistargeting.
Yemen’s second rainy season (July to September) commenced with below-average cumulative rainfall in July, with deficits exceeding 35 mm in some western areas, according to data from CHIRPS. Given this and revised forecasts through September, cumulative rainfall in the second season is now expected to be below average. This is likely to lead to increased production costs for farmers due to greater reliance on supplementary irrigation. Despite this, the main fruit and vegetable production season in the highlands is expected to provide poor households with an increase in labor opportunities along the production and marketing chains in the September to January period.
The Aden-based rial depreciated further in July amidst shortages of revenue and foreign exchange. Though the IRG has struggled with such shortages for many years, the situation has worsened over the past year due to the total loss of oil export revenue driven by the SBA’s blockade of oil exports from IRG-controlled seaports since October 2022. and, more recently, due to loss of tax revenue driven by the SBA’s blockade of imports from IRG areas via land borders. From June to July 2023, the Aden-based rial lost 5 percent of value against the USD, on average, to reach 1,413 YER/USD, a full 25 percent less value than at the same time last year. On the other hand, the value of the Sana’a-based rial (in Amanat Al Asimah) remained stable at 528 YER/USD in July.
Prices of staple food commodities as measured by the cost of the minimum food basket (MFB) remained generally stable from June to July, both on average across IRG-controlled areas and on average across SBA-controlled areas, according to data from FAO. The cost of the MFB in July averaged 7 percent higher than the same time last year across IRG-controlled areas but 13 percent lower than the same time last year across SBA-controlled areas. Prices of imported staple wheat flour in July exhibited similar patterns compared to both the previous month and the previous year.

Recommended citation: FEWS NET. Yemen Key Message Update July 2023: Provision of public services to worsen in IRG areas, driving civil unrest, 2023.

This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.