AU, partners warn Middle East conflict poses ‘serious risk’ to African economies
Addis Ababa: The African Union (AU) and its partners have warned that the ongoing Middle East conflict poses a “serious risk” to African economies.
In a joint policy brief, the AU, the United Nations (UN) Economic Commission for Africa, the African Development Bank, and the UN Development Program warned that the longer the conflict lasts and the more severe the disruption on shipping routes, energy, and fertilizer supplies, the greater the risk of a significant growth slowdown across Africa, Xinhua news agency reported.
With most African countries still growing at rates below the pre-COVID time, the brief projected a loss in output growth of 0.2 percentage points on Africa’s gross domestic product for 2026 if the conflict exceeds six months.
The organizations stressed that the conflict, which has already triggered a trade shock, could quickly become “a cost-of-living crisis” through higher fuel and food prices. Rising shipping costs, insurance premiums, exchange rate pressures, and tighter fiscal conditions could further compound the crisis, with vulnerable households bearing the heaviest burden.
The Middle East accounts for 15.8 per cent of Africa’s imports and 10.9 per cent of exports, which highlights the critical implications of the current situation for African economies, according to the brief.
Highlighting that the fertilizer channel may prove more consequential than oil shocks for some countries, the brief noted that disruptions to Gulf liquid natural gas supply would affect ammonia and urea production, raising fertilizer costs during the crucial March-to-May planting season.
It warned that the phenomenon will put further upward pressure on food prices and hit vulnerable households hardest, with significant negative impacts on food security in Africa.
Expressing concern over potential geopolitical spillover effects that could reshape Africa’s security, it also warned that a wider conflict could intensify competition for influence in Africa, with regional conflicts in Sudan, Somalia, and Libya already reflecting external sponsorship.
The brief emphasised the importance of strengthening energy security, safeguarding and restoring fiscal space, accelerating the implementation of the African Continental Free Trade Area, and establishing financial safety nets across Africa as essential strategies for building resilience.
