The African Development Bank stated that the impact of the Middle East conflict on African economies may be limited, although it is adding further strain to already weakened economic outlooks burdened by debt, declining aid, and global instability.
Chief Economist Kevin Urama noted that growth could decline by around 0.2 percentage points, provided the conflict does not exceed three months. He added, “If the war lasts up to six months, we could see a decline of about 1.5%,” as the conflict exacerbates the effects of falling foreign direct investment, declining official development assistance, and reduced financial flows into Africa.
In a report compiled using data up to January, the continent’s largest multilateral development finance institution projected that Africa’s economic growth would accelerate to 4.3% this year and 4.5% by 2027. However, it warned that rising debt levels and fiscal pressures remain significant constraints.
The negative impact could be partially offset for African oil-exporting countries by higher global oil prices resulting from supply disruptions. Global oil prices were on track Monday to post record monthly gains amid the Iran-related conflict.
In theory, domestic refining capacity—such as the Dangote Refinery—could help cushion the impact of supply disruptions across the continent. Nevertheless, Urama stressed that the crisis is already affecting African economies through rising fuel, food, and fertilizer prices.
He added that around 29 African countries have already experienced currency depreciation due to inflationary pressures stemming from the shock. The Bank noted in its report that debt service obligations across the continent are consuming more than 31% of government revenues, constraining investment in health, education, and infrastructure.
Africa’s total public debt reached $1.9 trillion in 2024, with seven countries already in debt distress and 13 others at high risk.
The Bank also warned that sharp cuts in official development assistance threaten health, education, and social protection programs, noting that external financing in some countries has covered more than half of current health expenditures.
The United States—which largely dismantled its main aid agency last year—accounted for 33.6% of bilateral official development assistance to Africa between 2015 and 2023.
Finally, the Bank highlighted that foreign direct investment inflows to Africa had already declined by 42% in the first half of 2025, warning that increased risk aversion could trigger further capital outflows.