By Ebi Kesiena
African economies are bracing for fresh inflationary pressures following the escalation of hostilities involving the United States, Israel, and Iran in the Middle East, a development that threatens to disrupt fragile recoveries across the continent.
In recent weeks, at least nine African central banks, including those of Democratic Republic of the Congo, Kenya, and Nigeria, moved to cut interest rates after months of moderating inflation. Policymakers had pointed to easing price pressures following years of economic strain triggered by the COVID-19 pandemic and the ripple effects of Russia’s war in Ukraine.
However, the renewed Middle East crisis has driven up global oil prices, raising concerns that inflation could surge again. Many African nations, heavily reliant on fuel imports and vulnerable to global commodity shocks, may now face higher transport and food costs, complicating monetary policy decisions.
Financial markets across the continent have also come under pressure as foreign investors pull funds from African assets, seeking safer returns in the U.S. dollar. The capital flight has weakened several local currencies, increasing the cost of servicing foreign debt and financing new projects.
“Borrowing and raising capital just got harder,” said Charlie Robertson, author of The Time Travelling Economist, in remarks to Semafor. He warned that markets are unlikely to rebound to pre-war levels soon, citing growing skepticism over any short-term ceasefire.
Tighisti Amare of Chatham House cautioned that African economies lack sufficient buffers to withstand another prolonged global shock, underscoring the continent’s exposure to external crises.
