Prolonged crisis could shave up to 1.5% off growth as rising oil prices, debt pressures, and weak investment weigh on economies…..
The African Development Bank has raised fresh concerns over the economic fallout of the ongoing Middle East conflict, warning that Africa’s growth could take a significant hit if the crisis drags on.
Speaking at the launch of the 2026 Africa’s Macroeconomic Performance and Outlook (MEO) report, the bank’s Chief Economist, Kelvin Urama, said the continent could lose as much as 1.5 percentage points in economic growth if the conflict persists beyond six months.
Short-Term Shock, Long-Term Risk
According to the AfDB, the immediate impact of the conflict may remain relatively contained. However, the risks increase sharply the longer the crisis continues.
- A conflict lasting up to three months could reduce growth by about 0.2 percentage points
- If extended to six months, losses could rise to as much as 1.5 percentage points
Urama noted that the duration of the conflict will ultimately determine the scale of economic disruption across African economies.
Fragile Foundations Under Pressure
The warning comes at a time when many African countries are already grappling with multiple economic challenges.
The AfDB highlighted several pressure points:
- Weak foreign direct investment (FDI) inflows
- Declining official development assistance (ODA)
- Rising public debt levels
- Increasing global economic uncertainty
Despite these headwinds, the bank maintained its growth projections at 4.3% for 2026 and 4.5% for 2027, signaling cautious optimism.
The conflict has disrupted global energy markets, driving oil prices higher and creating uneven effects across Africa.
While oil-exporting nations may see increased revenues, the broader impact has been inflationary:
- Higher fuel costs are pushing up transport and production expenses
- Food and fertiliser prices are rising
- Cost-of-living pressures are intensifying across many countries
In addition, nearly 30 African economies have experienced currency depreciation, further compounding inflationary challenges.
Debt and Financing Constraints Deepen Risks
Africa’s fiscal position remains under strain, with public debt estimated at $1.9 trillion.
Servicing this debt now consumes more than 30% of government revenues in many countries, limiting their ability to invest in development priorities.
The situation is further complicated by tightening external financing conditions:
- Foreign direct investment dropped sharply in 2025
- Cuts in foreign aid are affecting critical sectors such as health and education
- Global financial conditions remain restrictive
The AfDB’s warning underscores how vulnerable African economies remain to external shocks, particularly those linked to global energy markets.
While growth forecasts remain stable for now, the outlook could quickly deteriorate if geopolitical tensions escalate or persist longer than expected.
Global Context
Recent projections from the International Monetary Fund and the World Bank suggest a modest recovery trajectory for Africa and Nigeria, with growth estimates hovering around the mid-4% range over the next few years.
However, the AfDB cautions that sustaining this momentum will depend heavily on global stability, improved investment flows, and the ability of African economies to withstand external shocks.
For Africa, the Middle East crisis is more than a distant geopolitical issue it is a direct economic threat.
If the conflict lingers, the combined impact of rising costs, weaker currencies, and constrained financing could slow growth, strain public finances, and complicate the continent’s path to recovery.
