Nigeria and other African economies face the risk of a sharper growth slowdown this year following the war in the Middle East, with prolonged disruption to trade, energy and fertiliser supplies threatening to ripple across the continent.
The report by two United Nations (UN) agencies; the African Union (AU) and the African Development Bank, said that African economies could lose 0.2 percentage points of GDP growth in 2026 if the conflict lasts more than six months.
“The longer the conflict lasts, the more severe the disruption to shipping routes and energy and fertiliser supplies, and the greater the risk of a significant growth slowdown across the continent,” the report said.
The report was presented at the UN’s Economic Commission meeting in Tangier, Algiers in Algeria, and it did not quantify the likely impact on inflation, but warned that the conflict could quickly turn into a cost-of-living crisis across Africa through higher fuel and food prices. It said that some African states could be hit harder by fertiliser shortages than by higher oil prices.
“Disruptions to Gulf Liquefied Natural Gas (LNG) supply would affect ammonia and urea production, raising fertiliser costs and constraining supply during the crucial March-to-May planting season,” it said. The Middle East accounts for 15.8 per cent of Africa’s imports and 10.9 per cent of its exports. Many African nations have raised the price of fuel in recent days as a result of the Gulf oil shock.
“In East Africa, Kenya is emerging as a logistics hub through Lamu Port and Nairobi, while Ethiopia is benefiting from its role as the emergency air bridge linking Asia, Africa and Europe through Ethiopian Airlines,” it said.
With African growth still sluggish and debt levels high, the report urged governments to strengthen domestic revenue collection, coordinate fuel procurement and establish emergency food corridors, while saving windfall oil revenues and deploying targeted social protection measures.
Claver Gatete, the Executive Secretary of the UN Economic Commission for Africa, which co-authored the report, stated that it was too early to quantify the impact of the war on African inflation and growth, or to determine which countries and sectors would be worst hit by the current crisis.
On Thursday, the chief of the International Monetary Fund (IMF) cautioned that the Iran war is worsening the prospects for the global economy, regardless of how long a shaky ceasefire lasts.
Next week, the fund will lower its prediction for the global economy, according to Managing Director Kristalina Georgieva. “We would have been upgrading global growth if it weren’t for this shock,” Georgieva stated before the IMF-World Bank spring meetings next week. “But even our best-case scenario now calls for a growth downgrade.”
