Rising global oil prices, fuelled by tensions in the Middle East, are placing significant strain on African economies, weakening currencies, increasing debt servicing costs and heightening concerns over a wider cost-of-living crisis.
A joint analysis by the African Union, African Development Bank and United Nations Development Programme indicates that at least 29 African currencies have declined in value since late February, when hostilities involving the United States, Israel and Iran intensified.
The depreciation of these currencies is driving up the domestic cost of repaying foreign debt, while also making critical imports such as fuel, food and fertilisers more expensive.
By the end of March, global crude prices had surged by over 50 percent, pushing oil beyond the $100 per barrel mark.
This sharp increase has been linked to disruptions affecting tanker movements through the Strait of Hormuz, a vital corridor responsible for transporting roughly one-fifth of the world’s oil supply and a significant portion of Africa’s energy imports.
For countries across Africa that depend heavily on imported refined fuel, the effects have been immediate and widespread.
Elevated fuel prices are feeding into higher transport and production expenses, driving inflation upward and reducing consumers’ purchasing power, just as some economies had begun to see price stability improve.
The report cautioned that the current shock is spreading more rapidly and through more concentrated channels than previous global crises, leaving policymakers with limited room to respond effectively.
Nations with high levels of external debt, low foreign exchange reserves and large import bills—such as Senegal, Sudan, Cabo Verde, South Sudan and The Gambia—are expected to face the greatest fiscal pressure.
The disruption is also posing risks to agricultural output. Interruptions to gas supplies from the Gulf are affecting the production of ammonia and urea, which are essential components for fertiliser, at a crucial stage of the March-to-May planting season.
“Disruptions linked to Gulf energy supplies threaten access to ammonia and urea during the critical March–May planting season, jeopardising agricultural production and compounding risks of food insecurity—particularly for low-income households and import-dependent economies,” the report stated.
Experts note that what began as a trade-related shock is quickly evolving into a broader economic challenge, driven by higher shipping and insurance costs, exchange rate volatility and tightening fiscal conditions.
Africa’s vulnerability to the crisis remains notable, with the Middle East accounting for approximately 15.8 percent of the continent’s imports and 10.9 percent of its exports, amplifying the impact of supply disruptions and price fluctuations.
A recent diplomatic development may provide only temporary relief, as the United States and Iran agreed to a two-week ceasefire that includes keeping the Strait of Hormuz open, easing immediate concerns over prolonged supply interruptions.
Despite this, the truce remains uncertain, with no assurance of a lasting resolution. While oil prices have begun to ease slightly, continued uncertainty is still affecting energy markets and global trade.
Economists suggest that much of the economic impact has already filtered through African economies via higher import costs and weaker currencies, meaning any short-term decline in oil prices may not quickly translate into relief for households.
If tensions persist for more than six months, Africa’s economic growth could decline by at least 0.2 percentage points this year. Prior to the escalation, growth for 2026 had been projected at around 4.0 percent, supported by gradual recovery across key sectors.
Beyond economic effects, the situation may intensify geopolitical competition on the continent, as global powers such as the United States, China and Russia expand their influence in Africa.
Fragile nations including Sudan, Somalia and Libya could face heightened instability, particularly around strategic infrastructure such as ports and mineral resources.
Humanitarian concerns are also increasing, as rising logistics and delivery costs may worsen conditions in vulnerable areas, especially in the Horn of Africa, while shifting global spending priorities toward security could limit development funding.
In response, African institutions are urging swift and coordinated measures to mitigate the immediate effects. Proposed actions include targeted subsidies to ease pressure on fuel, food and fertiliser, along with steps to stabilise supply chains.
Over the medium term, governments are encouraged to improve energy security, strengthen social protection systems and accelerate intra-African trade under the African Continental Free Trade Area.
“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.