Iran war threatens Africa’s growth, raising cost-of-living pressures

Africa’s economic growth is expected to slow in 2026 as the war on Iran disrupts trade, energy supplies and prices, increasing the risk of a cost-of-living crisis across the continent, according to Africa News via AP on April 5th.

The conflict poses a “serious risk” to Africa’s economic outlook, according to a report produced by the United Nations Development Programme and the United Nations Economic Commission for Africa, with input from the African Union and the African Development Bank.

It warned that higher fuel and food prices, along with rising shipping and insurance costs, could reduce growth and increase inflation.

These pressures, combined with tighter fiscal conditions, could further drive a cost-of-living crisis across the continent, The New Arab reported.

Africa’s economic ties to the Middle East heighten its exposure to the conflict. The region accounts for 15.8% of Africa’s imports and 10.9% of its exports, according to the report.

Disruptions to trade have already begun to affect supply, with the risk of higher household costs if the conflict continues.

The report said Africa’s GDP growth could fall by 0.2 percentage points in 2026 if the conflict lasts more than six months, with the impact depending on disruptions to shipping routes and to energy and fertiliser supplies. It added that “the longer the shock lasts, the more the effects accumulate”.

Reduced deliveries of liquefied natural gas from the Gulf are expected to affect fertiliser production during the key planting period, further pressuring food prices and agricultural output.

Currencies in 29 African countries have already weakened, raising debt costs and import prices, the African Development Bank said, adding that foreign currency reserves have also declined.

Higher energy prices and shifts in trade routes could bring short-term gains for some countries, particularly energy exporters and transport hubs.

Oil exporters such as Nigeria and gas producers such as Mozambique may benefit from stronger prices, while rerouted shipping around the Cape of Good Hope could boost activity at ports in southern and eastern Africa, with Kenya and Ethiopia emerging as key regional transit points.

However, the report warned these gains are likely to be uneven and insufficient to offset the wider impact on inflation, public finances and food security, adding that the crisis could increase the cost of humanitarian aid and divert funding away from the continent.

Africa News via AP, The New Arab and agencies, UNDP, Maghrebi.org