How the Middle East crisis could dampen Africa’s economic growth

A new report warns that escalating conflicts in the Middle East could slow Africa’s economic recovery and shave up to 0.2% off growth, with African policymakers urged to avoid hasty fiscal responses that could worsen existing vulnerabilities. The findings, contained in the report Impacts of the Conflict in the Middle East on African Economies, suggest that African economies - already recovering gradually from the impacts of the Covid-19 pandemic, the Russia–Ukraine war and rising global trade tariffs - remain highly exposed to external shocks emanating from the Middle East. The report was presented in Washington, D.C., by the African Union Commission, the African Development Bank Group (AfDB), the United Nations Economic Commission for Africa (ECA) and the United Nations Development Programme (UNDP). Serious implicationsKevin Urama, Chief Economist and Vice President for Economic Governance and Knowledge Management at the AfDB, presented the findings on the sidelines of the Spring Meetings of the International Monetary Fund and the World Bank. He highlighted that the closure of the Strait of Hormuz would have serious implications for global transport and trade flows.“The report reminds us that the continent demonstrates remarkable resilience,” said Francisca Tatchouop Belobe, African Union Commissioner for Economic Affairs, Development, Trade, Tourism, Industry and Mining.The report identifies several key transmission channels through which Middle Eastern conflicts affect African economies. These include rising prices of hydrocarbons, food products and fertilisers, disruptions to global trade, logistics and supply chains, and increased volatility in capital and foreign exchange markets.“Eighty per cent of the oil imported into Africa comes from this region, as well as 50% of refined petroleum,” said Claver Gatete, Executive Secretary of the ECA. He added that 31 African countries were already experiencing currency depreciation as a result of the conflict-related shocks.'Don't panic'To address the situation, AfDB Chief Economist Urama urged African governments not to panic or take hasty decisions that could undermine fiscal stability.The report recommends strategic inflation management to anchor short-term price stability expectations. It also advises oil-exporting countries to maintain strict fiscal discipline by managing windfall revenues prudently, strengthening debt monitoring, and using energy reserves strategically. Where fiscal space allows, it recommends temporary and targeted social protection measures to protect vulnerable populations.However, it cautions against broad-based subsidies, warning that they could deepen long-term fiscal deficits. It further urges countries to diversify energy sources, as well as food and input supplies.The report also calls for stronger regional and intra-African trade in oil and fertiliser markets to enhance resilience, alongside improved inter-institutional coordination to align monetary and fiscal policies.At the same time, it urges development partners, multilateral banks and development finance institutions to provide emergency support through crisis-response measures and technical assistance.It further recommends the rapid operationalisation of the African Continental Free Trade Area (AfCFTA), alongside efforts to strengthen domestic capital mobilisation.Accelerated investments The report also encourages diversification of Africa’s energy mix through accelerated investment in renewable energy and the gas sector.It calls on stakeholders within Africa’s financial ecosystem to accelerate implementation of the New African Financial Architecture for Development (NAFAD). The AfDB recently concluded continent-wide consultations on the framework, which culminated in the “Abidjan Consensus” on 9 April 2026 in Abidjan, Côte d’Ivoire. The initiative aims to speed up reforms to mobilise African financial resources at scale to support development financing across the continent.United Nations Deputy Secretary-General Amina J. Mohammed called for measures “to safeguard the gains already achieved at a continental level”. “We must work to ensure that the Sustainable Development Goals under the 2030 Agenda and Agenda 2063 are achieved,” she said. Marie-Laure Akin-Olugbade, Senior Vice President of the AfDB, said there was a need for global coordination, noting that no country or institution could withstand such shocks alone. She added that rapid response measures, similar to those during the Covid-19 pandemic and the war in Ukraine, were essential, with people placed at the centre of interventions. “The shocks affect us deeply, and we have no choice but to be resilient, and African countries have the means to respond,” said Ahunna Eziakonwa, Director of the UNDP Regional Bureau for Africa. “In Africa, we need to win the fight for energy independence. We must invest in domestic solutions and encourage young people to engage in innovation, digital technology and artificial intelligence.”

How the Middle East crisis could dampen Africa’s economic growth

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Republikein 2026-04-29

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How the Middle East crisis could dampen Africa’s economic growth

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