The African Union (AU) and its partners have warned that the ongoing Middle East conflict could slow Africa’s economic growth, fuel inflation and worsen food insecurity.

They recommended goernments adopt targeted social protection measures and flexible monetary policies to cushion vulnerable populations, among other measures to respond to short-term to long-term impact of the US/Israel war with Iran.

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The warning is contained in a joint policy brief released on April 2, in which the AU, the African Development Bank, UN's Economic Commission for Africa and the UN Development Programme, project a potential loss of 0.2 percentage points in Africa’s GDP growth in 2026 if the conflict persists beyond six months.

The institutions caution that disruptions to energy supplies, shipping routes and fertilizer flows could trigger a broader cost of living crisis, driven by rising fuel and food prices, higher transport and insurance costs, and mounting exchange rate pressures. They noted that oil prices had already risen by about 50 per cent as of late March, increasing inflation risks across the continent.

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Africa’s exposure is significant, as the Middle East accounts for 15.8 per cent of continent’s imports and 10.9 per cent of its exports, while the now-closed Strait of Hormuz handles around 20 per cent of global oil exports.

Immediate measures to absorb the shock

In the short term, the AU and its partners call for targeted interventions to protect households and stabilise markets.

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"African countries could deploy temporary, targeted social protection measures to protect the most vulnerable populations... whilst avoiding broad-based price suppression and subsidies,” the brief reads in part.

Governments are also encouraged to secure critical imports through contingency financing arrangements, including pooled fuel procurement and emergency food corridors, while diversifying fertilizer sources to safeguard agricultural production, particularly during the March to May planting season.

At the monetary policy level, central banks are urged to act decisively as currencies in 29 African countries have already depreciated, raising the cost of imports and external debt servicing.

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"Central banks should implement flexible strategic monetary and exchange rate policies... to balance price and exchange rate stability with growth objectives,” the report states.

The brief also recommends temporary liquidity support, trade finance guarantees and import facilities to help countries manage rising external pressures.

Building resilience in the medium term

Beyond the immediate shock, the institutoins call for structural measures to strengthen resilience across African economies.

These include expanding energy infrastructure such as refining, storage and distribution systems, while accelerating investment in renewable energy to reduce dependence on imports.

Countries are also urged to protect fiscal space through stronger domestic resource mobilisation and targeted spending, alongside accelerating implementation of the African Continental Free Trade Area (AfCFTA) to improve the movement of essential goods during crises.

In addition, the report highlights the need to deepen domestic capital markets and develop financial safety nets, including crisis response instruments and debt service mechanisms.

Long-term push for strategic autonomy

In the long run, the AU is pushing for a more coordinated continental approach to managing external shocks.

"The African Union could champion development of a Continental Crisis and Resilience Compact focused on energy and food security, stronger financial safety nets, and greater trade and financing autonomy, the brief says.

The proposal also includes advancing a common African position on issues such as debt shock clauses, shipping insurance and emergency food corridors to strengthen the continent’s bargaining power in future crises.