Key facts
- Instability in the Middle East due to the US-Israeli war on Iran is creating challenges for African economies.
- Disruptions to fertilizer exports from the Middle East could significantly impact Africa's food security and agricultural production costs.
- Even after a ceasefire, it may take six to seven months for production and exports to return to normal levels.
- The conflict is causing global economic disruption, dimming the outlook for many economies and potentially slowing global growth while fueling inflation.
- Energy importers, particularly low-income countries, are most vulnerable to rising fuel costs and imported inflation.
The International Monetary Fund (IMF) has warned that the ongoing conflict in the Middle East, described as a US-Israeli war on Iran, is creating significant economic challenges for African nations that could persist for months. Zeine Zeidane, the IMF's new Africa director, highlighted that disruptions to the Middle East's role as a major fertilizer exporter could severely impact Africa's food security and increase agricultural production costs.
Zeidane emphasized that helping African countries weather this shock is an immediate priority. He noted that even after a ceasefire, it typically takes six to seven months for production and exports in the region to return to normal levels, according to indications from Gulf countries. This prolonged disruption is expected to have lasting consequences.
The broader global economic impact of the war is also a concern, with the IMF anticipating slower global growth and higher inflation. Energy importers, particularly poorer countries with limited fiscal buffers, are most exposed to rising fuel and input costs. The conflict has already caused unprecedented disruption to global energy supplies, impacting critical trade routes like the Strait of Hormuz, which handles a substantial portion of global oil and gas shipments. This has led to a reduction in global oil availability and is expected to weigh heavily on economies heavily dependent on imports.
Low-income countries face heightened risks of food insecurity and may require additional external support. Policymakers have been advised against broad energy subsidies, which could exacerbate inflationary pressures. The IMF plans to present multiple scenarios for the global economy in its upcoming World Economic Outlook, reflecting the varying duration and intensity of the conflict.