The African Union (AU) and its partners, including the United Nations (UN) Economic Commission for Africa, the African Development Bank, and the UN Development Program, have issued a joint policy brief cautioning about the potential economic threats posed by the ongoing Middle East conflict. They highlighted that prolonged disruptions to shipping routes, energy, and fertilizer supplies could lead to a significant growth slowdown across Africa. The brief projected a possible 0.2 percentage point reduction in Africa’s gross domestic product for 2026 if the conflict extends beyond six months.
The organizations expressed concerns that the current conflict, already causing a trade shock, could escalate into a “cost-of-living crisis” due to increased fuel and food prices. They pointed out that rising shipping costs, insurance premiums, exchange rate fluctuations, and tighter fiscal conditions could exacerbate the situation, impacting vulnerable households the most. The Middle East’s significant role in Africa’s imports and exports, accounting for 15.8% and 10.9% respectively, underscores the critical implications for African economies.
Emphasizing the potential impact on agriculture, the brief highlighted that disruptions in Gulf liquid natural gas supply could affect fertilizer production, leading to higher costs during the crucial planting season. This could further elevate food prices, particularly affecting food security in Africa. Additionally, the brief raised concerns about possible geopolitical spillover effects reshaping Africa’s security landscape, with a broader conflict intensifying competition for influence in the region. Regional conflicts in Sudan, Somalia, and Libya were cited as examples reflecting external involvement.
The organizations stressed the importance of enhancing energy security, preserving fiscal space, expediting the African Continental Free Trade Area implementation, and establishing financial safety nets across Africa as crucial strategies to enhance resilience in the face of these challenges.
