Middle East conflict pushes global oil prices higher, threatening African currencies, debt, and food security
A surge in global oil prices driven by the ongoing Middle East conflict is intensifying pressure on African economies, weakening currencies, raising debt costs, and fueling fears of a broader cost-of-living crisis.
A joint report by the African Union, the African Development Bank, and the United Nations Development Programme highlights that at least 29 African currencies have depreciated since late February, following escalating tensions between the United States, Israel, and Iran.
The currency depreciation is increasing the local cost of servicing external debt while making essential imports including fuel, food, and fertilizers significantly more expensive.
Global oil prices surged over 50% by late March, pushing crude above $100 per barrel, largely due to disruptions in tanker traffic through the Strait of Hormuz, a critical shipping route carrying roughly one-fifth of global oil supply, including a significant share of Africa’s energy imports.
Immediate economic and social impacts
For African countries that rely on imported refined fuel, the effects have been immediate.
Higher pump prices are raising transport and production costs, driving inflation, and eroding household purchasing power.
Governments have limited time to respond, as the shock is spreading faster and more directly than previous global disruptions.
Countries with high external debt, low foreign exchange reserves, and large import bills such as Senegal, Sudan, Cabo Verde, South Sudan, and The Gambia are expected to experience the most severe fiscal strain.
The crisis is also threatening agricultural production. Disruptions to Gulf energy supplies are affecting the availability of ammonia and urea, essential inputs for fertilizers, at a critical point in the March–May planting season.
The report warns this could exacerbate food insecurity, particularly for low-income households and import-dependent economies.
Broader economic and geopolitical risks
Analysts note that what began as a trade shock is evolving into wider economic stress, driven by rising shipping and insurance costs, currency pressures, and tightening fiscal conditions.
Africa’s exposure is significant: the Middle East accounts for 15.8% of the continent’s imports and 10.9% of its exports, amplifying the effects of supply disruptions.
Although a temporary two-week ceasefire between the United States and Iran has eased immediate fears of prolonged disruptions, the truce remains fragile.
Oil prices have shown slight relief, but uncertainty continues to weigh on energy markets and trade flows.
Economists warn that even if prices drop short-term, the effects on currencies and household costs are already embedded.
If the conflict persists beyond six months, Africa’s economic growth could slow by at least 0.2 percentage points in 2026, down from a projected 4.0% growth supported by gradual sectoral recovery.
Beyond economics, the crisis may intensify geopolitical competition, with global powers deepening engagement across Africa, and increase instability in fragile states such as Sudan, Somalia, and Libya, especially around strategic assets and critical minerals.
Humanitarian risks are also rising. Higher logistics and delivery costs could worsen conditions in vulnerable regions, particularly the Horn of Africa, while shifting global spending priorities toward security may limit development financing.
Urgent and coordinated response needed
African institutions are calling for immediate and coordinated action. Short-term measures include targeted subsidies for fuel, food, and fertilizers, alongside efforts to stabilize supply chains.
Medium-term priorities include strengthening energy security, expanding social protection, and accelerating intra-African trade under the African Continental Free Trade Area (AfCFTA).
“African institutions and development partners must act quickly and together, leveraging their comparative advantages to cushion short-term shocks while laying the foundations for long-term resilience,” said Sidi Ould Tah, president of the African Development Bank Group.
