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Middle East Conflict Poses "Serious Risk" to African Economies, Warns AU

Major international organizations have issued a stark warning that the prolonged Middle East conflict poses a severe threat to African economies. The joint brief projects a potential 0.2 percentage point loss in Africa's GDP growth by 2026 if the conflict persists beyond six months. Disruptions to shipping, energy, and critical fertilizer supplies threaten to escalate into a full-blown cost-of-living and food security crisis. The report calls for urgent action to strengthen energy security, accelerate continental free trade, and establish financial safety nets to build resilience.

Key Points: Middle East Conflict Threatens African Economic Growth

  • Conflict threatens 0.2% GDP loss by 2026
  • Could trigger a cost-of-living crisis
  • Fertilizer supply disruptions critical for food security
  • Geopolitical spillover may reshape African security
  • Strengthening continental trade is key for resilience
2 min read

AU, partners warn Middle East conflict poses 'serious risk' to African economies

AU, UN, and AfDB warn Middle East conflict risks African growth slowdown, higher food prices, and a cost-of-living crisis.

"a serious risk - African Union & Partners"

Addis Ababa, April 6

The African Union 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.

- IANS

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Reader Comments

R
Rohit P
The connection between Middle East conflict and African fertilizer costs is something we don't think about enough. It shows how fragile the global system is. Africa accelerating its own free trade area is the right move – regional cooperation is key. 🇮🇳
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Aman W
While the focus is on Africa, we should note that India imports a lot of fertilizer and oil too. Any disruption hits our farmers and common people hardest. The government's push for Atmanirbhar Bharat in agriculture is more important than ever.
S
Sarah B
A sobering analysis. The warning about geopolitical spillover affecting security in places like Sudan is critical. It's not just an economic issue. Hope diplomatic efforts intensify to de-escalate the core conflict.
K
Karthik V
The report is correct, but I feel it understates the risk. A 0.2% GDP loss sounds small, but for economies already struggling, it's huge. Vulnerable households bearing the burden is always the sad reality. Global leaders need to act, not just warn.
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Nisha Z
This is why we need stronger South-South cooperation. India and Africa should work more closely on trade, technology sharing, and food security. We have similar challenges and can't always depend on unstable global routes.

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