With each new and emerging global crisis, the almost immediate go-to conclusions in media and public debates are that Africa will be hit the hardest, and that doom and gloom are soon to follow. Yet, as we saw with the agile Covid-19 pandemic responses across the continent, and more recently, following the Russia-Ukraine war, the level and nature of impact varied across Africa. More importantly, these developments played out over time, not overnight.
In trying to unpack impacts of the Iran war on Africa and on African countries, attempts we have read through have fallen short in a number of different ways. Some tend to focus on the import and export implications, an understandable approach as these issues are some of the immediate and most visible outcomes. In other cases, there is a slightly narrower view of specific industries like tourism, and how association with the Gulf region triggers legitimate and in Egypt’s case unfounded fears of tourist safety. In other cases, reviews of war impact narrowly focus on sub-sectors like transport and how higher refined fuel prices will raise costs of living over time.
Yes, industries like agriculture and transport will be impacted by higher oil and fuel prices, but what are the other pressing concerns? Is everything urgent as the “crisis” headlines imply, or will things unfold over longer periods of time as we saw with the pandemic and war in Europe? Is it really all downhill from here, or are there opportunities and winners on the continent that news headlines conveniently miss out?
The potential effects
Naturally, immediate and short-term concerns should lead our consideration. For the rest of 2026 and over the next 1-2 years, the costs of living may be pushed upwards. In countries like Kenya, Namibia, South Africa, Zambia and Zimbabwe, governments have managed to absorb the initial impacts of refined petroleum supply challenges by temporarily foregoing revenue earned from fuel taxes. While consumers and businesses experience some relief from this, governments lose out as much as $351m from just one month of fuel tax cuts. Beyond the immediate fuel pricing adjustments we may have seen already, broader import and export shifts have also started to take place. How these changes will materialise will be determined by how dependent African countries are on exports to and imports from partners in and around the Strait of Hormuz. On the one hand, countries such as Angola, Morocco, Nigeria, and South Africa all earned less than 4% of their 2024 overall export revenues from countries in and around the Strait of Hormuz. Although these countries exported to Kuwait, Saudi Arabia, and the United Arab Emirates (UAE), exports were led by primary goods like fresh fruits, gold, and petroleum gases – each of which will be scarce or in high demand worldwide and should therefore find alternative markets not currently facing import difficulties.
But on the higher end of Africa’s leading exporters to markets in and around the Strait of Hormuz were countries such as Zimbabwe, Uganda, Burkina Faso, and Egypt. For each exporter, countries in and around the Strait of Hormuz represented 40%, 26.6%, 26%, and 9.8% of their overall exports in 2024 respectively. Similarly, the mix of African goods exported included raw materials such as fresh fruit, gold, and unmanufactured tobacco, as well as processed goods like cars, monitors and projectors. Both for Africa’s exports and imports to and from the Gulf region, these figures highlight the diversity of geographic and industrial impacts. There is no blanket “impact on Africa”.
Next in our prioritisation should be issues that fall between the short-term and a slightly longer time horizon of 3-5 years. Over this period, African countries will also face some direct and indirect impacts from the war in Iran. Outside of direct petroleum imports, forecasts from the Famine Early Warning System indicate that countries like Chad, Somalia, South Sudan and Sudan are at risk of food insecurity. Although their challenges are partly driven by climate change-induced droughts, the war in Iran adds further stress to the livelihoods of millions of people dependent on imports of food and agricultural commodities like fertilisers – both of which will be more expensive to source due to higher fuel costs. Similarly, sourcing finance for development may also become a challenge. A good example of this is the African Development Bank’s (AfDB) African Development Fund (ADF), whose recent replenishment received over 25% of its funding pledges from development finance institutions owned and controlled by countries now bearing the brunt of the Iran war’s economic impacts. In this same context, between 2012-2022, Africa secured over USD 100 billion in foreign direct investment (FDI) from members of the Gulf Cooperation Council (GCC) – countries that now face indefinite economic downturns. So beyond concessional finance, the scale and pace of FDI inflows from the GCC may also tank.
Wins for the continent?
Despite these downsides, there will also be wins for the continent. For oil producing and exporting countries like Angola, national budgets had planned around conservative oil prices of about USD 61 per barrel. By some estimates, the rest of 2026 will see prices holding at about USD 85 per barrel. The higher oil prices stay, the greater national windfalls will be. With the ongoing airspace safety risks, Africa’s travel and tourism industries will also receive a boost. In the past, countries like Saudi Arabia and the UAE have become international travel and tourism hubs, earning as much as $600m in daily visitor expenditure. But going forward, countries like Ethiopia, Kenya, Morocco, and South Africa may experience temporary bursts in airline traffic and tourism inflows as they become de facto alternative transit hubs for global airlines. With these unavoidable surges, African countries and pioneers like Ethiopian Airlines will also build financially attractive cases for future fleet and airport infrastructure investments.
As we move from the next five years to a more long-term view, Africa’s outlook becomes a mixed bag of opportunities waiting to be implemented, as well as untapped opportunities that should be revisited urgently.
Unsurprisingly, the continent’s entrepreneurs will also have a share of the upsides. Both from existing fertiliser production expansion plans, as well as through proposed East Africa production facilities, the Dangote Group stands to profit tremendously in the coming years while also stabilising Africa’s food security by making sure fertilisers are readily available within the continent. At the same time, the ongoing war in Iran amplifies the attractiveness and economic case for prioritising renewable energy investment in African countries. Africa has an unrealised market of over 600 million people in need of electrification. Yet, the continent only receives about $30bn or 12% of the climate finance needed annually – a missed opportunity to leverage the continent’s abundant solar and wind generation potential. In addition to household level renewable energy consumption envisioned by projects like Mission 300, investment into Africa’s green industrialisation has the potential to reshape how the continent responds to and navigates its way through external shocks triggered by non-African economic hubs.
Lastly, Africa’s connectivity opportunities extend to transport corridors, another shunned segment of the continent on the grounds of project “bankability”. A direct substitution of diesel-dependent movement of cargo to rail under Africa’s Integrated Railway Network vision might not directly translate to less energy consumption or environmental pollution. However, it would create a more robust continental trade network less prone to being grounded by global shocks outside of the continent’s control. Accordingly, investments in Africa’s rail industry should receive equal attention in the continent’s re-examination of sustainable methods of moving people and goods between countries.
Three recommendations
So from an African perspective, what then is the way forward? We have three recommendations.
As part of the continent’s immediate response to the war, African governments should learn from the aviation industry’s use of temporary surcharges by designing short-term demand restraint measures where necessary. These include promotion of public transport as more efficient alternatives to duplicative private vehicle use, fuel-saving guidelines circulated on public platforms, and limiting traffic volumes in the most affected urban centres. Collectively, such measures could ease pressure on strained resources like refined petroleum, but they should also minimise incidents of panic buying and stockouts among retailers.
In the medium-term, financing transitions and transformations of Africa’s energy systems will be mandatory risk management strategies. A low hanging fruit here is revisiting the continent’s visionary but “unbankable” cross-border infrastructure projects. Between missing and failed feasibility studies, intra-African connectivity is held back by massive funding gaps. But, if the ongoing war in Iran can test perceptions of what is considered as a safe destination for money, there should also be a frank reassessment of projects that have previously been viewed as unviable. In this same context, value addition to process and manufacture within Africa must be the new starting point of FDI dialogues going forward. Continuing to depend on the metaphorical crumbs the rest of the world leaves for Africa is an unsustainable foundation for the continent’s economic development. Without a hardline position on value-added investments, African countries will continue to find themselves at the receiving end of global developments.
In the continent’s long-term view, African governments should also leverage shifting trends and geopolitical realities to strengthen the investment case for African aviation, maritime, and rail infrastructure. Investments today in Africa’s infrastructure project preparation are seeds sown towards the world’s future resilience to unforeseen economic shocks.
Rugare Mukanganga is an economist at Development Reimagined
Samiha Chowdhury is a trade analyst at Development Reimagined