Gambiaj.com – (ABIDJAN, Côte D’Ivoire) – A new joint report by the African Union, the African Development Bank, and several United Nations agencies has warned that the ongoing war involving Israel and the United States against Iran could pose a “serious risk” to Africa’s economic stability, raising concerns about inflation, currency depreciation, and worsening living conditions across the continent.
The report, also produced with the United Nations Development Programme and the United Nations Economic Commission for Africa, was transmitted to AFP on Saturday and outlines the potential economic fallout for African countries as global markets react to the escalating conflict.
Rising Costs and Currency Pressures
According to the report, Africa’s strong trade links with the Middle East heighten its exposure to the crisis. Around 15.8 percent of Africa’s imports originate from the Middle East, while 10.9 percent of the continent’s exports are destined for the region.
The institutions warn that the conflict could quickly trigger a cost-of-living crisis in many African states. Rising fuel prices, higher food costs, increased freight charges, and soaring insurance premiums are expected to strain already fragile economies.
The report also highlights growing pressure on exchange rates and government budgets. Since the escalation of the conflict, 29 African currencies have already depreciated, increasing the cost of servicing foreign debt, raising import bills, and eroding foreign exchange reserves.
Agriculture may also be affected. With the planting season underway across much of the continent, lasting through May, disruptions in the supply of liquefied natural gas from Gulf countries are already constraining fertilizer production and availability, driving prices upward and threatening crop yields.
Limited Gains for Some Countries
Despite the broad risks, the report notes that a handful of African countries could see limited economic gains.
Major oil producer Nigeria may benefit from higher crude prices, while Mozambique could profit from rising demand for liquefied natural gas. Meanwhile, ports in South Africa, Namibia, and Mauritius could experience increased activity as global shipping routes adjust to regional instability.
In the aviation sector, Kenya and Ethiopia may also benefit from shifts in international air routes.
However, the report cautions that these gains would remain uneven and insufficient to offset continent-wide economic losses, particularly in terms of inflation, public finances, and food security.
The authors also warn that the crisis could aggravate existing geopolitical tensions in Africa, potentially fueling competition over strategic ports, mineral resources, and maritime security in the Red Sea.
At the same time, humanitarian operations across the continent could become more expensive, while international donors might redirect funding toward other global priorities, a trend that had already begun before the latest Middle East conflict.
Calls for Immediate and Long-Term Action
To mitigate the potential fallout, the four institutions urge African governments to adopt short-term social protection measures to shield vulnerable populations from rising living costs.
They also recommend activating emergency financing mechanisms for critical imports, including joint fuel procurement schemes, noting that the Middle East accounts for nearly 16 percent of Africa’s imports.
The report further encourages hydrocarbon exporters such as Nigeria and Mozambique to save windfall revenues from higher energy prices in sovereign wealth funds, helping to stabilize domestic economies and cushion households against inflation.
Over the longer term, the institutions stress the need to strengthen Africa’s energy security, including expanding refining capacity and investing in renewable energy.
Another key recommendation is accelerating the implementation of the African Continental Free Trade Area, which the report describes as a critical tool for boosting intra-African trade and reducing the continent’s vulnerability to global shocks.
Experts say that deeper continental integration, combined with structural reforms, will be essential if African economies are to withstand the ripple effects of the escalating Middle East conflict.
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