The Middle East conflict “poses a significant risk to Africa”, according to a report from the African Union and the African Development Bank (AfDB).

The report, viewed by AFP Saturday, cautioned that the war could drive up the cost of living and slow economic growth across the continent.

Africa imports 15.8 percent of its goods from the Middle East and exports 10.9 percent of its products to the region, the report stated.

“The conflict, which has already triggered a trade shock, could rapidly evolve into a cost-of-living crisis across Africa through higher fuel and food prices, rising shipping and insurance costs, exchange rate pressures, and tighter fiscal conditions,” it said.

Most African countries continue to experience growth rates below pre-Covid pandemic levels, the report noted.

“A loss in output growth of 0.2 percentage points on Africa’s GDP is projected for 2026 if the conflict extends beyond six months,” it said.

“The longer the conflict persists and the more severe the disruption to shipping routes and energy and fertiliser supplies, the greater the risk of a significant growth slowdown across the continent.”

Reduced deliveries of liquefied natural gas (LNG) from the Gulf will affect fertiliser production, limiting availability during the critical planting period up to May, it added.

Currencies affected

The report was compiled by the UN Development Programme (UNDP) and the United Nations Economic Commission for Africa (UNECA).

Recent AfDB data shows that currencies in 29 African countries have already depreciated, raising the cost of servicing external debt, making imports more expensive and depleting foreign exchange reserves.

Some countries could experience short-term benefits, such as Nigeria from oil exports or Mozambique from LNG.

The rerouting of ships around the Cape of Good Hope could benefit ports in Mozambique, South Africa, Namibia and Mauritius.

Kenya is positioning itself as a logistics hub in East Africa, while Ethiopian Airlines, Africa’s leading carrier, is serving as an “emergency air bridge” between the continent, Asia and Europe, the report noted.

However, these gains are likely to be uneven and will not offset the consequences for inflation, budgets and food security across Africa, the report warned.

Most importantly, the current crisis could increase the costs of humanitarian aid and redirect donor funds towards other priorities.