A new joint policy report warns that the ongoing crisis in the Middle East could reduce Africa’s economic growth by up to 0.2 percent in 2026. The findings were presented in Washington, D.C., by the African Union Commission, the African Development Bank Group (AfDB), the United Nations Economic Commission for Africa (ECA), and the United Nations Development Programme (UNDP). The report highlights that African economies, still recovering from COVID-19, the Russia–Ukraine conflict, and global trade disruptions, remain highly vulnerable to external shocks.
The report notes that disruptions such as the closure of key shipping routes like the Strait of Hormuz are having serious implications for global trade and transport. Given Africa’s heavy reliance on energy imports from the Middle East, including oil and refined petroleum, the crisis is contributing to rising costs of hydrocarbons, food, and fertilizers, while also increasing volatility in currency and financial markets. As a result, several African countries are already experiencing currency depreciation and broader macroeconomic instability.
Economic experts involved in the report urge African governments to avoid panic-driven policy responses and instead focus on maintaining fiscal stability. Recommendations include managing inflation carefully, exercising fiscal discipline in oil-exporting countries, strengthening debt monitoring systems, and using energy reserves strategically. The report also emphasizes the importance of targeted social protection measures to shield vulnerable populations, while cautioning against broad subsidies that could worsen long-term fiscal pressures.
To build resilience, the report calls for greater diversification of energy sources, food supplies, and industrial inputs, alongside stronger regional and intra-African trade, particularly in oil and fertilizer markets. It also stresses the need for improved coordination between fiscal and monetary authorities, as well as stronger collaboration with development partners and multilateral institutions to provide emergency support and technical assistance.
Further recommendations include accelerating the implementation of the African Continental Free Trade Area, boosting domestic capital mobilization, and advancing the New African Financial Architecture for Development. The report also highlights the importance of transitioning toward renewable energy and expanding investment in the gas sector to reduce external dependence.
UN officials and development leaders emphasized the need for coordinated global action and people-centered responses to safeguard development gains and ensure progress toward the Sustainable Development Goals and Agenda 2063. They also highlighted Africa’s resilience and stressed the importance of investing in innovation, digital technologies, and youth-led solutions to strengthen long-term economic stability.
