Four leading multilateral institutions warned on Wednesday that Africa’s economic recovery faces mounting pressure from the Middle East conflict and called on governments to accelerate energy diversification and regional trade integration, rather than resort to costly broad subsidies.
The African Union Commission (AUC), the African Development Bank Group (AfDB), the United Nations Economic Commission for Africa (ECA), and the United Nations Development Programme (UNDP) presented the joint policy document, titled “Impacts of the Conflict in the Middle East on African Economies,” on April 15 in Washington, D.C., on the sidelines of the International Monetary Fund (IMF) and World Bank Spring Meetings.
The report estimates that African economies could lose up to 0.2 percentage points of gross domestic product (GDP) growth in 2026 if the crisis persists, adding to pressures that had already been flagged by the AfDB and the World Bank in separate assessments earlier this month.
AfDB Chief Economist Kevin Urama urged governments to stay calm and avoid reactive fiscal decisions. The report specifically warns oil-exporting nations to exercise strict discipline over windfall revenues and cautions against broad-based fuel subsidies, which it says would deepen long-term fiscal deficits. Where governments have room to act, it recommends temporary and targeted support to protect the most vulnerable households.
The Strait of Hormuz, a critical artery for global energy markets, has seen drastically reduced traffic since the conflict escalated, affecting supply chains that feed into Africa’s import-dependent economies. The institutions called on African governments to strengthen intra-African trade in oil and fertiliser markets to reduce exposure to such disruptions.
The report also urges faster operationalisation of the African Continental Free Trade Area (AfCFTA) and calls on development finance institutions to provide emergency assistance to the most exposed economies.
Ahunna Eziokonwa, Director of the UNDP Regional Bureau for Africa, said the continent has no choice but to build domestic resilience. “In Africa, we need to win the fight for energy independence,” she said, pointing to renewable energy, digital technology, and youth innovation as priority areas.
The policy document follows a continent-wide consultation process that produced the Abidjan Consensus on April 9, aimed at mobilising African financial resources at scale under the New African Financial Architecture for Development (NAFAD).
