The Middle East Conflict’s Ripple Effect On Africa’s Economies

The ongoing Middle East conflict involving the United States, Israel, and Iran is creating serious economic ripple effects across Africa, with rising oil prices, disrupted shipping routes, and renewed inflation placing heavy pressure on economies across the continent. As Africa remains heavily dependent on imported petroleum products and refined fuel, countries such as Zambia, Kenya, and South Africa are facing higher fuel costs, currency pressure, and increased transport and food prices. The conflict is also disrupting fertilizer supplies, agricultural production, manufacturing, SMEs, tourism, and consumer spending, creating what experts describe as a “compound shock” of energy, food, and supply chain crises. With weakened purchasing power, rising inflation, and threats to economic growth, the crisis highlights Africa’s urgent need for energy diversification, stronger local production systems, and greater economic resilience.

BY CHATULA KANGALI

The escalation of conflicts in the Middle East, particularly involving the United States (US), Israel, and Iran early this year, have introduced significant economic volatility to the global economy and Africa, primarily through surging oil prices, increased shipping costs, and renewed inflationary pressures.

The situation, characterized by potential disruptions in the Strait of Hormuz, threatens to reverse recent inflation control efforts in Africa, which had seen inflation drop to 7.5 percent in February 2026.

The region’s instability is disrupting critical trade routes, particularly the Red Sea and Bab al-Mandab Strait, which are vital for international shipping.

Fuel Price Volatility and Inflation

Africa, a net importer of petroleum products, is highly vulnerable to Middle East supply disruptions.

Weakening currencies are amplifying the impact of price spikes, with countries like Kenya, Tanzania, and Uganda facing higher fuel costs, rising inflation, and currency pressure.

The cost of importing oil has already climbed, with Brent crude rising 18 percent in the first four trading days of March.

According to the African Refineries and Distributors Association(ARDA) Crude oil consumption in Africa is projected to rise from 1.8 million barrels per day in 2024 to 4.5 million barrels by 2050.

However, downstream investment has stagnated, leaving Africa stuck in a costly paradox of exporting crude and importing refined products at a premium mostly from the middle east.

Country-Specific Challenges

In South Africa, the rand is weakening, and inflation risks are rising, dimming hopes of an interest-rate cut.

Kenya is facing rising transport and logistics costs, higher electricity generation expenses, and increased inflation risks.

Zambia has been identified as one of the countries that could experience significant economic shocks from high oil prices.

The Gulf region plays a central role in global oil production and supply. Any military escalation in that region typically results in: Increased crude oil prices shipping and insurance cost hikes.

Supply chain disruptions.

Currency pressure on oil importing countries.

For Zambia, this translates into higher landed fuel costs, pressure on the exchange rate, rising transport fares, increased food and commodity prices, and inflationary pressures.

The impact on Agriculture Production

The shutdown of production facilities in the Gulf and shipping disruptions through the Strait of Hormuz has created a severe, immediate fertilizer shortage (urea, ammonia).

Rising energy and fuel prices, combined with expensive fertilizer, have increased input costs for farmers worldwide, particularly in countries like South Africa, Australia, and Brazil.

High costs and limited availability of fertilizer are forcing farmers to reduce usage, which is leading to lower crop yields and threatening food security, especially in Africa.

Within the conflict zone, agricultural land, irrigation systems, and water treatment facilities have been severely damaged, destroying local production capabilities.

Grain shipments in the Black Sea and other regions have been disrupted, with Iran’s imports of wheat facing challenges.

Highly vulnerable due to heavy dependence on food imports and localized conflict disruption. Countries like Sudan, Tanzania, and Kenya are at risk due to high reliance on Gulf fertilizer imports.

Australian and Brazilian farmers are facing significant challenges in securing fertilizers for upcoming planting seasons.

The conflict is causing a “compound shock” of energy and fertilizer shortages that threatens to sustain higher food prices throughout 2026.

The Impact on Commodity Prices

Rising crude oil and diesel make it difficult to attract and prices directly increase transportation and food costs, with, for example, South Africa experiencing sharp increases in fuel prices.

Countries relying heavily on imports, such Zambia, are most vulnerable to shortages due to limited foreign exchange reserves.

The surge in import bills places pressure on national budgets, forcing central banks to consider raising interest rates, which further squeezes consumers.

Longer shipping routes and insurance premiums associated with regional instability increase the cost of delivering goods.

Impacts on SMEs

Wars and geopolitical conflicts in the Middle East significantly impact Small and Medium Enterprises (SMEs) by creating severe economic instability, interrupting supply chains, and reducing access to finance, often hindering their vital role as employment engines in the region.

Conflict disrupts transportation and trade, making it difficult for SMEs to operate, especially those in tourism, retail, and manufacturing.

In high-risk environments, banks reduce exposure to the SME sector, exacerbating the existing challenge of obtaining capital for expansion.

Regional conflicts, combined with fluctuating oil prices, lead to lower consumer confidence, reduced demand, and uncertainty.

Conflict can cause labour shortages or retain skilled employees due to insecurity.

The absence of robust bankruptcy laws or effective commercial courts means that in times of crisis, SMEs face greater risks of debt criminalization.

While countries directly involved in conflict (e.g., Yemen, Syria) face total disruptions, neighboring countries may experience indirect impacts through supply chain bottlenecks, reduced investment, and decreased tourism.

While SMEs are more adaptable than large corporations, their lack of deep financial reserves makes them more vulnerable to prolonged crises.

The impact on the manufacturing sector

The ongoing conflicts in the Middle this year is creating severe, adverse impacts on the African manufacturing sector by driving up input costs, disrupting logistics, and threatening food security.

Disruptions in the Middle East, a major source of raw materials, are driving up costs for manufacturers.

Fertilizer prices have spiked by over 30 percent, affecting agricultural manufacturing, while rising oil prices (potentially affecting fuel costs by R2-R4.50 per liter in South Africa) are raising overall production and logistics expenses.

Conflict-related maritime security issues, particularly in the Gulf region, are causing shipping delays, container shortages, and port congestion, impacting the delivery of intermediate goods and raw materials.

Escalating tensions are triggering a potential pullback of investment from Gulf Cooperation Council (GCC) states, which have been significant financers of African industrial infrastructure.

While some African nations face pressure to pick sides, increasing competition from cheaper, subsidised imports particularly from China, which is re-orienting its trade focus toward the Global South—threatens to displace local manufacturing.

The combination of rising logistical costs, debt burdens, and lower growth makes African manufacturing firms vulnerable to financial failure, with 86 percent reporting brand damage due to supply chain disruption.

Impact on Africa’s Travel and Tourism Sector

The 2026 Middle East conflict is significantly impacting Africa’s travel and tourism sector by causing major flight disruptions, increasing fuel costs, and reducing tourist arrivals.

Key African hubs (Nairobi, Johannesburg, Addis Ababa) are facing reduced connectivity, while North African nations face safety-related demand drops, threatening to derail the continent’s early 2026 tourism recovery.

Significant airspace closures and flight cancellations in the Middle East have disrupted key routes connecting Africa to Europe and Asia.

Ethiopian Airlines suspended flights to ten Middle Eastern destinations, cancelling over 100 weekly flights.

As a major transit hub, disruptions in the Gulf are inflating operational costs for airlines, as fuel accounts for a significant portion of expenses.

Increased airfares and reduced connectivity are affecting tourism demand.

Several African countries, including Egypt, Tunisia, Tanzania, and Morocco, are warning of a potential decline in international arrivals.

While Southern and East Africa have seen minimal immediate impact, future bookings are slowing down.

The conflict has prompted many governments to advise against travel to parts of the region, including Egypt, impacting tourist confidence.

The disruption of travel routes and supply chains threatens to reverse the 11.7 percent increase in passenger demand that Africa saw in January 2026, according to the International Air Transport Association (IATA).

Key impacts on consumers

The Conflicts are causing immediate consumer pain through spiked oil and gasoline prices, driving up global inflation.

Households are facing higher costs for goods, transportation, and, potentially, heating, while facing increased anxiety and reduced purchasing power.

These, combined with higher interest rates, are creating a “crisis fatigue” mindset and reducing overall consumer sentiment.

Gasoline prices are surging, and home energy bills are projected to rise due to volatility in oil and natural gas markets.

Rising shipping costs and energy prices are driving up the cost of groceries and everyday goods.

Inflation and increased borrowing costs are putting pressure on household budgets, forcing consumers to cut back on discretionary spending.

Concerns over shipping lanes, such as those through the Red Sea, are contributing to potential shortages or higher prices for imported goods.

The crisis calls for the need for energy diversification, with some nations like Ethiopia accelerating electric vehicle adoption and focusing on renewable energy to mitigate future risks.

While some African countries produce oil, the overall dependence on imported refined products makes the continent highly susceptible to price shocks, with experts warning of potential catastrophic impacts on economic growth if disruptions persist.