The escalating conflict involving Iran could pose significant economic risks for African countries through higher energy prices, trade disruptions and financial market volatility, according to a new analysis by African Export-Import Bank (Afreximbank).
In a research note titled Potential Impact of the Ongoing Conflict with Iran on Africa, Afreximbank’s research unit said the conflict represents a major external shock for the continent, with global energy markets expected to be the primary transmission channel.
Crude prices have surged amid disruptions to shipping routes through the Strait of Hormuz, a strategic waterway that carries roughly one-fifth of the world’s oil supply. The volatility has heightened concerns for African economies that depend heavily on imported petroleum products.
Energy price shocks are expected to have the most immediate impact. Because most African countries import refined fuels, higher oil prices could increase fuel import bills, widen fiscal deficits and put pressure on foreign exchange reserves. Rising fuel costs are also likely to feed into domestic inflation, particularly through transport and logistics expenses that influence food prices and household purchasing power.
The report said oil-exporting African nations could see short-term gains if elevated prices persist. Producers such as Nigeria, Angola, Algeria and Libya may benefit from stronger export earnings and improved fiscal balances.
However, the bank noted that the upside for producers may be limited because many African oil exporters still rely on imported refined petroleum products, reducing the net benefit from higher crude prices.
Afreximbank also highlighted potential financial spillovers. During periods of geopolitical tension, global investors often move funds into safe-haven assets, strengthening the U.S. dollar and weakening emerging-market currencies. For African economies, this could translate into currency depreciation, tighter financial conditions and rising debt-servicing costs, especially for countries with high external debt or limited foreign exchange buffers.
The conflict could also disrupt global supply chains and maritime trade routes, increasing shipping costs and insurance premiums for vessels operating near the Gulf region. Given Africa’s reliance on imported inputs including fuel, fertilizers and industrial goods, such disruptions could affect sectors ranging from agriculture and manufacturing to mining.
Higher natural gas prices could also push up fertilizer costs, potentially reducing fertilizer usage and affecting agricultural productivity and food security across the continent, the report said.
Beyond the immediate effects, Afreximbank warned that prolonged conflict could create second-round inflationary pressures, complicating monetary policy decisions for African central banks that must balance inflation control with the need to support economic growth.
The analysis said the crisis highlights the urgency for African economies to strengthen resilience against external shocks. Key policy priorities include expanding domestic refining capacity, diversifying energy sources, deepening regional trade under the African Continental Free Trade Area and strengthening regional supply chains.
While the conflict presents clear downside risks to growth and macroeconomic stability, the bank said proactive policy measures and stronger regional integration could help mitigate the impact and improve Africa’s ability to withstand future global shocks.
