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Iran war delivers new inflation stress to African economies emerging from older shocks
Afreximbank is implementing measures to give financial help to African countries dependent on fuel imports, bank president says
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The ripples of the US-Israel on Iran are fuelling inflationary pressures across Africa through higher energy and fertiliser prices, threatening a fragile economic recovery.
Most of Africa’s 54 countries depend on fuel imports and have experienced sharp increases in fuel prices, driven by disruptions to Middle East exports and the surge in global prices. Most are just getting over the price shocks caused by Russia’s war with Ukraine, which started in 2022 and has hurt many African countries that depend on the warring sides for wheat imports.
The cycle appears set to be repeated with the war in Iran.
Since the start of the hostilities, oil and gas infrastructure in Iran and other Persian Gulf countries has been hit, including the world’s biggest liquefied natural gas facility in Qatar. Most critically, the Strait of Hormuz, through which more than 20 per cent of the world’s crude oil shipments pass, has been effectively shut, also cutting the export of nitrogen used in fertilisers as well as other petroleum by-products.
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