Middle East Conflict Could Cut Africa’s Economic Growth by 1.5% – AfDB

The African Development Bank (AfDB) has warned that the ongoing conflict in the Middle East could weaken Africa’s economic growth, with potential losses of up to 1.5% if the crisis persists beyond six months.

The bank’s Chief Economist, Kelvin Urama, made this known on Monday at the launch of the 2026 Africa’s Macroeconomic Performance and Outlook (MEO) report.

The bank noted that while the immediate impact may be moderate, the shock adds pressure to an already fragile outlook marked by rising debt, declining foreign investment, and reduced development assistance.

Urama said the scale of the impact will largely depend on the duration of the conflict, with longer disruptions posing greater risks to the continent’s economic stability.

What the bank is saying 

The AfDB warns that the economic impact of the Middle East conflict on Africa will depend largely on how long it persists. In the short term, the effect may be limited, but a prolonged crisis could significantly weaken growth across the continent.

• Growth could decline by 0.2 percentage points if the conflict lasts up to three months  
• “If the war continues for up to six months,  we might see about a 1.5% decline,” Urama said. 
• Africa’s economy is already facing multiple pressures, including:  
• Weak foreign direct investment (FDI) inflows  
• Declining official development assistance (ODA)  
• Broader global economic instability  
• Despite these risks, AfDB maintains its growth projections at:  
• 4.3% in 2026  
• 4.5% in 2027  

More insights 

The ongoing conflict has disrupted global energy markets, pushing up oil prices and creating mixed outcomes for African economies.

While oil-exporting countries may benefit from higher prices, the broader impact has been inflationary, increasing the cost of living across the continent.

• Rising oil prices have led to higher fuel, food, and fertiliser costs
• About 29 African countries have recorded currency depreciation due to inflationary pressures
• Africa’s fiscal position remains under strain:
• Public debt reached $1.9 trillion in 2024
• Debt servicing accounts for over 31% of government revenues
• 7 countries are in debt distress, with 13 at high risk
• External financing conditions are also tightening:
• FDI flows declined by 42% in the first half of 2025
• Cuts in foreign aid are threatening funding for health, education, and social programmes
• The United States accounted for 33.6% of bilateral aid to Africa between 2015 and 2023

Overall, the combination of rising costs, weakening currencies, and constrained external financing underscores the growing vulnerability of African economies to global shocks.

What you should know 

In January, the International Monetary Fund raised Nigeria’s economic growth forecast for 2026 to 4.4%, up from its earlier projection of 4.2%.

• In Sub-Saharan Africa, regional growth was revised upward from 4.0% to 4.1% for 2025, and from 4.3 per cent to 4.4% for 2026, indicating a broadly shared recovery trend.
• Also, the World Bank retained Nigeria’s economic growth forecast at 4.4% for 2027.