Mideast war poses serious risk to African economies, AU and AfDB warn
Quick Reads
- A new report from the African Union and AfDB warns the Middle East war threatens to trigger a cost-of-living crisis across Africa through higher fuel and food prices.
- Currencies of 29 African countries have already depreciated, increasing the cost of servicing external debt and making imports more expensive.
- A 0.2 percentage point loss in Africa’s GDP growth is projected for 2026 if the conflict exceeds six months.
- The Middle East accounts for nearly 16% of Africa’s imports, exposing the continent to trade shocks from disrupted shipping routes.
The ongoing Middle East conflict “presents a serious risk to Africa,” the African Union and the African Development Bank said in a joint report, warning that the war threatens to raise living costs and slow growth across the continent. The report, seen by AFP on Saturday, projects a loss of 0.2 percentage points in Africa’s GDP growth for 2026 if the fighting lasts beyond six months.
The Middle East accounts for 15.8% of Africa’s imports and 10.9% of its exports, making the continent highly vulnerable to trade disruptions. The report states the conflict “has already triggered a trade shock” that could quickly escalate into a broader cost-of-living crisis through higher fuel and food prices, rising shipping and insurance costs, exchange rate pressures, and tighter fiscal conditions.
According to recent data from the AfDB cited in the report, the currencies of 29 African countries have already depreciated. That depreciation increases the cost of servicing external debt, makes imports more expensive, and reduces foreign exchange reserves a cycle that hits households through higher prices for everyday goods.
The report also flagged risks to fertilizer supplies. Reduced deliveries of liquefied natural gas from the Gulf will impact fertilizer production, limiting availability during the crucial planting period up to May. That could affect food production across the continent just as import prices are rising.
Some African economies could see short-term gains. Nigeria could benefit from higher oil export revenues, Mozambique from its LNG exports, and ports in South Africa, Namibia, and Mauritius from ships rerouting around the Cape of Good Hope. Kenyan ports are also positioning as logistics hubs, while Ethiopian Airlines serves as an “emergency air bridge” between Africa, Asia, and Europe. However, the report warns these benefits will be uneven and will not offset the broader inflation, budget, and food security consequences.
Market Snapshot (Africa-focused)
- Currencies depreciated: 29 African countries
- Projected GDP impact: -0.2 percentage points for 2026 if conflict exceeds six months
- Middle East trade share: 15.8% of Africa’s imports; 10.9% of exports
- Key risks: Fuel prices, food prices, shipping costs, fertilizer availability
