Middle East Conflict Threatens Africa’s Fragile Recovery, Could Cut Growth by 0.2%: Joint AU-UN-AfDB Report

Kevin Urama, AfDB Chief Economist, emphasized that the closure of key maritime routes has had “significant consequences for transport and trade,” amplifying vulnerabilities in import-dependent economies.

A new high-level policy report has warned that escalating conflict in the Middle East is sending shockwaves across African economies, potentially shaving up to 0.2 percentage points off growth and reversing hard-won recovery gains.

The joint report—released in Washington, D.C. by the African Union Commission, African Development Bank (AfDB), United Nations Economic Commission for Africa (ECA), and United Nations Development Programme (UNDP)—highlights the continent’s deep exposure to global geopolitical disruptions and calls for urgent, coordinated policy responses.

External Shocks Threaten Recovery Momentum

Titled “Impacts of the Conflict in the Middle East on African Economies,” the report paints a sobering picture of a continent already grappling with the aftershocks of COVID-19, the Russia–Ukraine war, and rising global trade tensions.

The ongoing Middle East crisis—particularly disruptions linked to the Strait of Hormuz, a critical global energy and shipping corridor—has intensified pressures on trade, inflation, and financial stability.

Kevin Urama, AfDB Chief Economist, emphasized that the closure of key maritime routes has had “significant consequences for transport and trade,” amplifying vulnerabilities in import-dependent economies.

Energy Dependence Exposes Structural Weakness

Africa’s heavy reliance on Middle Eastern energy supplies has emerged as a central risk factor.

According to the report:

• 80% of Africa’s imported oil originates from the Middle East

• 50% of refined petroleum products are sourced from the region

• 31 African countries are already experiencing currency depreciation due to external shocks

This dependence has left many economies exposed to surging global prices and supply disruptions, driving up inflation and straining foreign exchange reserves.

Rising Prices, Supply Chain Disruptions

The report identifies several key transmission channels through which the crisis is impacting African economies:

• Sharp increases in hydrocarbon, food, and fertilizer prices

• Disruptions to global trade routes and logistics networks

• Volatility in capital flows and foreign exchange markets

These pressures are particularly acute for low-income and import-dependent countries, where rising costs threaten food security and social stability.

Policy Guidance: Balance Stability and Resilience

Despite the risks, the report urges African governments to avoid reactive or short-term policy missteps that could worsen fiscal vulnerabilities.

Instead, it recommends a calibrated approach, including:

• Strategic inflation management to stabilise price expectations

• Prudent fiscal discipline, especially for oil-exporting nations benefiting from windfall revenues

• Strengthened debt monitoring and responsible public finance management

• Deployment of targeted social protection measures to shield vulnerable populations

Crucially, the report cautions against broad-based subsidies, warning that they could deepen fiscal deficits and undermine long-term stability.

Structural Reforms to Build Long-Term Resilience

Beyond immediate responses, the report calls for deeper structural reforms to reduce Africa’s vulnerability to external shocks:

• Diversification of energy sources, including accelerated investment in renewables and gas

• Expansion of intra-African trade, particularly in oil and fertilizer markets

• Rapid implementation of the African Continental Free Trade Area (AfCFTA)

• Strengthening of domestic capital mobilisation frameworks

The report also highlights the importance of advancing the New African Financial Architecture for Development (NAFAD), a continent-wide initiative aimed at unlocking large-scale financing for development, recently reinforced through the “Abidjan Consensus” in April 2026.

Call for Global Coordination and Support

Recognising the scale of the challenge, the report calls on international partners—including multilateral development banks and financial institutions—to step up support through emergency financing and technical assistance.

UN Deputy Secretary-General Amina Mohammed stressed the need to protect development gains, warning that without coordinated action, progress toward the Sustainable Development Goals and Africa’s Agenda 2063 could be jeopardised.

AfDB Senior Vice President Marie-Laure Akin-Olugbagde echoed the urgency, noting that “no country or institution can face these shocks alone,” and calling for rapid, people-centred responses similar to those deployed during the COVID-19 pandemic.

Resilience Amid Crisis

Despite the challenges, African leaders struck a cautiously optimistic tone, highlighting the continent’s capacity to adapt and respond.

“The shocks affect us deeply, and we have no choice but to be resilient,” said Ahunna Ezioknwa of UNDP, emphasizing the need for energy independence and investment in innovation, digital technologies, and youth-led solutions.

A Defining Moment for Economic Strategy

The report underscores a critical inflection point for African economies. While external shocks continue to test resilience, they also present an opportunity to accelerate structural transformation, reduce dependency, and strengthen regional integration.

Whether the continent can turn crisis into opportunity will depend on the speed and coordination of policy responses—both within Africa and across the global financial system.